Silicon Valley lawmakers approve plans for distributing rent relief funds

Renters make up nearly half of the Bay Area’s largest city, and many face an eviction time bomb after eviction bans end and back rent is due, prompting Silicon Valley lawmakers Tuesday to take steps to protect the most vulnerable tenants.

Lawmakers at the city and county level approved a “hybrid” plan to distribute millions of dollars in funding locally to help the area’s lowest-income renters. County, city and state bodies will work in tandem to distribute the funds to tenants and landlords under the plans.

State legislators in January approved SB 91, which extended the state’s eviction moratorium for tenants financially impacted by COVID-19 until the end of June, and created a program to distribute $2.6 billion in rental assistance from a federal coronavirus aid package passed in December.

Under SB 91, landlords can be paid up to 80 percent of past rent due. If a landlord refuses to accept payment, the tenant will receive 25 percent of past rent due, which will allow the tenant to access eviction protections under the bill.

The news of incoming rental assistance has left some local officials pondering how to best distribute that money.

The San Jose City Council and Santa Clara County Board of Supervisors both discussed rental relief measures at their respective meetings Tuesday. The supervisors mulled letting the state administer all the funds coming to the county, or choosing a hybrid of state and county distribution. San Jose lawmakers decided between a state, local or a hybrid distribution as well.

Both the city and county decided, ultimately, to go with a hybrid approach with local and state distribution strategies.

San Jose Councilmember Maya Esparza said she wishes the state had carved out a better approach to allow local governments to administer the funds since they have closer ties to the community and can better identify residents in need.

“It’s disappointing that the state is making us take on this extra work and to create a sort of bifurcated system,” Esparza said. “Whether it’s vaccines or rent relief, it’s the local municipalities and the local government that is stepping up to do this.”

Relief funding is on the way

California received a $1.5 billion aid allotment from the federal government for landlords and tenants.

According to a county report, Santa Clara County expects to receive $27 million from the state for direct assistance to landlords and $130 million for renters.

San Jose will receive roughly $32 million from the state’s $1.5 billion allotment, according to a report by city officials. Separately, the city received a little more than $30 million in federal rental assistance funds — which must be paid to landlords directly for rent and utility purposes.

If the landlord refuses to accept rental assistance, only then can the city distribute the funds to qualifying tenants, who must use the funds to pay their landlord.

“There’s nothing more stressful than whether or not you’re going to have a home over the next 30 days,” said San Jose Councilmember Magdalena Carrasco. “Having rent relief is such a welcomed sigh of relief, because it’s one thing to have a moratorium on evictions, but that didn’t ease the stress that our families were living under.”

Distribution plans

County supervisors voted unanimously Tuesday on a hybrid model of distribution, allowing the state to distribute $27 million directly to landlords while the county and community-based organizations will distribute $130 million to tenants, prioritizing extremely-low income families.

A household is considered extremely-low income if it is at or below 30% of the area median income, usually $37,900 for a household of two.

San Jose will distribute the $30 million in federal funds for rent and utilities for landlords through local partnerships with Destination: Home and Sacred Heart, while the state will dole out the $32 million set aside for landlords and tenants.

“This proposal creates two different pathways for both housing providers and tenants to receive the desperately-needed funds to help pay back rent and alleviate months of financial pressure and distress,” said Tim Beaubien, director of government affairs with the Santa Clara County Association of Realtors.

The city will be responsible for ensuring landlords and residents don’t double up on benefits.

Local control of funds means San Jose could help landlords with back rent and utility costs until March 1. If a landlord receives relief funds, they must forgive any rent debt for the time they received assistance, according to Michelle McGurk, assistant to the city manager.

It’s unclear when San Jose residents might be able to apply for rent relief but the San Jose City Council will formalize the program at its Feb. 23 meeting. There is also no timeline yet for when the county will begin distributing funds to residents.

Prioritizing low-income renters

Supervisor Cindy Chavez urged county officials to work with the state to ensure the bulk of landlord assistance goes to those whose tenants are extremely-low income.

Her colleague, Supervisor Otto Lee, agreed this is the best way to prevent homelessness.

“Having visited many homeless encampments lately, (I’ve noticed) many people are one rent payment away, one paycheck away from homelessness,” Lee said.

To get federal rental relief in San Jose, a household must prove its income was reduced by COVID-19, that they have been unemployed for 90 days, that they’re at-risk of homelessness or that they have a household income below 80% of the area median income — or $89,750 for a two-person household.

But San Jose could prioritize tenants at or below 30% of the area median income and tenants who live in neighborhoods with the highest rates of COVID-19 and job loss.

Approximately 43,000 Santa Clara County families are at risk of eviction, according to a county report. More than 65% of the clients in the county’s existing emergency relief programs are in the extremely-low income category.

“We share your focus on serving the most vulnerable residents,” David Low, a spokesman for Destination: Home, told supervisors Tuesday. “These are the folks that have been most severely impacted by the pandemic, extreme income loss and back rent owed.”

Contact Carly Wipf at [email protected] or follow @CarlyChristineW on Twitter. Contact Madelyn Reese at [email protected] or follow @MadelynGReese on Twitter.

Editor’s Note: Jennifer Loving, executive director of Destination: Home, serves on San José Spotlight’s Board of Directors.