What You Need to Know about California’s Rental Assistance Program

Published on May 10, 2021


Senate Bill 91 states that the State of California will be able to offer $2.6 billion in the form of emergency rental assistance to Californian renters and landlords who have been impacted by Covid-19.  Those households that are eligible for payments will receive assistance with utility bills, rent, and arrears (where applicable).   

In order to qualify the federal guidelines list the following criteria:

-Households must have experienced a loss of income as a result of the Covid-19 pandemic; and

-Household income should be at or below 80% AMI (median income)

-Households should be able to show there is a risk of housing instability or homelessness

The Rental Assistance Payment Program opened on 15th March 2021, here's what you need to know.

Why Did it Start?

The rental assistance payment program started to assist low income tenants in California cope with the crushing financial impact of the pandemic.  The economic downturn caused by the pandemic impacted homeowners and tenants; with a loss of jobs and income, some tenants found they were unable to make their rental payments.  There was a knock-on effect on landlords who rely on rental payments to keep business cash flow running.  Despite local and state eviction protections, the state of California knew it had to take action to prevent large-scale homelessness. 

The $2.6 billion pool in federal funds should go some way to help Californians from low-income families stay in their homes.  From March 15th 2021, any landlord with tenants who are low income and who have rent arrears due to the pandemic can apply for relief from the rent assistance payment program.  

Why Landlords Need to Know About This Program

The key points that landlords need to be aware of include the following:

-Applications start from 15th March 2021

-Landlord with low-income tenants can apply for relief

-Landlords can receive up to 80% of back rent 

-Back rent can be collected from 1 April 2020 – 31 March 2021

-Payments received must be used to account for rent arrears from 1 April 2020-31 March 2021

-Tenants will have to verify that they are eligible for the payments 

Any landlord applying for funds from the rental assistance program must agree to waive the remaining 20% of the rent due.  This means that the landlord cannot try and evict their tenant for the remaining 20%, or take the matter to the small claims court. 

If landlords want to apply for the relief payments, then they can apply through the state website – Housing Is Key.  Once the application has been reviewed and approved by the state, the payment of 80% of rental arrears will be paid straight to the landlord. 

The application requires input from both the landlord and the tenant.  Tenants can apply first, but if they do then the landlord will be notified and vice versa if the landlord applies first.  According to the California Apartment Association, the largest landlord group in the state, landlords should notify eligible tenants as soon as they can and inform them that they will be applying for relief, and both parties should work together. 

As a landlord applying for the relief you will need some documentation to hand including:

-Property deeds

-Mortgage information 

-Lease agreement

-Property tax statements

-Insurance Statements 

-Bank statements evidencing rent collected (if no lease agreement in place)

For landlords who use the services of property management companies, these companies can apply on behalf of the landlord.  In fact, property management companies can deal with the application for relief quicker than landlords as they tend to have all the required information and documentation to hand, saving the landlord time and hassle

How this Program Impacts Landlords

The program impacts both landlords and tenants and is meant as a relief package to help and support both parties.  Landlords will be helped out because they will be in a position to recover 80% of arrears, backdated to 1 April 2020.  However, if landlords apply to the program for funds then they do have to forego collection of 20% of the arrears.  

According to Geoffrey Ross, Deputy Director for Federal Assistance at the California Department of Housing and Community Development, the program will ‘help resolve the unfortunate situation where a lot of folks fell behind with their rent’.

An important point for landlords to be aware of is that if they do not apply for rent relief, they could be penalized for later trying to sue their tenant for arrears in an eviction court.  The California Apartment Association also advises that if landlords turn down tenants for rent relief then they could be violating the fair housing discrimination laws in California.  

For landlords who have outsourced their property management services their property managers will be able to assist with the application for relief, so check with them first before submitting an application. 

How this Program Impacts Tenants

Tenants need to know if they are eligible for relief under the rental assistance payment program.  The program is aimed at low-income tenants and their landlords.  In order to work out if you are eligible, tenants need to make under 80% of the local median income.  Median income can vary depending on where you live, tenants can use this sheet to work out their median income. 

Eligible tenants will also have to show that at least one person within the household has lost their job during the pandemic, and due to the loss of income there is a risk of homelessness. Overdue utility or rent bills can be used as evidence of a risk of homelessness.   In order to distribute the aid quickly to those who most need it, and those tenants most at risk of homelessness, the state will initially deal with households who earn below 50% of the area’s median income, or tenants who have been unemployed for 90 days plus. 

The program will offer assistance to all tenants who meet the eligibility criteria, and this also includes all undocumented tenants too. Tenants who apply will not be questioned about the citizenship status.  Before an application is made, tenants should ensure that they have the following documentation to hand:

-Covid Related Financial Hardship Declaration 

-Latest pay information with employers details

-Letter from employer terminating your job

-Evidence of applying for unemployment benefits

-If self-employed, tenants should provide: tax statements and records, income statements, other evidence of loss of income.


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