Los Angeles and cities across California are using lotteries to distribute emergency rental assistance. While some tenants fret over fairness, experts say it may be the most equitable way to distribute emergency assistance as Gov. Gavin Newsom proposes doubling state aid.
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Jordan Lyric’s landlord leaves a running rental bill taped to their door. This month, the total was $12,000 owed for a $1,100-per-month studio. Lyric, 28, who uses a non-binary pronoun, is hoping they have a shot at qualifying for rent relief under a lottery conducted by the City of Los Angeles to provide emergency renters assistance to low-income tenants who have fallen behind on rent in the pandemic.
The lottery application closed last month. And now, like thousands of other people in this city, Lyric waits to hear who won rental relief.
“It’s not a fun time,” Lyric said. “It just feels like they have more money and could help more people but instead we’re waiting on, like, chance.”
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What might feel like luck of the draw to anxious renters is really a strategy by Los Angeles and cities across the country to attempt a fair and equitable distribution of $45 billion in federal money to tenants most at risk of eviction, even as states struggle to disperse funds fast enough and early assessments paint a messy picture of California’s rollout.
Rather than accept applications on a first-come, first-serve basis, a lottery gives people without internet access, or the time to fill out an application, or who don’t speak English as a first language, the opportunity to find out about rental assistance and apply. Getting money out to the tenants who need it most will be critical as Gov. Gavin Newsom pledged to double state support for rent relief in his proposed budget. The latest Census Household Pulse Survey shows more than 1 million California households reported that they were behind on rent, more than half of them Latino.
“If you’re doing first-come, first-serve, it will be the people that can sit at their desk at a computer, that have a scanner, that don’t need anybody to help them walk through it, that don’t need anyone to help with language interpretation, that get it,” said Greg Bonett, staff attorney with Public Counsel, a pro-bono law firm.
Lotteries are easy, outreach is harder
Los Angeles is the largest city in the country to distribute its rental relief money by lottery, but it’s not the only one. Southern California cities such as Irvine, Santa Ana and Anaheim also chose a lottery as the most equitable way to offer up to three months of back rent – or, if that’s paid, three months of future rent – to tenants who make less than 50% of their area’s median income.
The state’s Department of Housing and Community Development, which is responsible for distributing rental relief funds to areas of the state with fewer than 200,000 residents and several counties, is using a first-come, first-serve model for qualified applicants, prioritizing those at 50% of the area’s median income, followed by applicants at 80%. That’s the same model as San Diego, which will accept applications for its $83 million in federal relief until all the money has been distributed to renters at or below 50% of the area’s median income.
San Diego Housing Commission spokesman Scott Marshall said the program has a process for prioritizing rental and utility debt for qualified applicants. But San Diego also illustrates the difficulties in reaching every at-risk group. The city’s housing commission has partnered with 10 community organizations and sent hundreds of thousands of Spanish-language flyers in the mail, but the city is still struggling to reach its Latino population.
Monitoring LA’s rent relief model
LA has 64,000 slots and $259 million. It is prioritizing those who make up to 30% of the area median income, and winners will receive up to $10,000 in money paid to their landlords.
“What a lottery does is it allows you to have a fixed window of time where your goal is to get as many people to apply as possible,” said Vincent Reina of the University of Pennsylvania, whose research group is embedded with the city of Los Angeles and the state to analyze the equity of the rental relief distribution. “Now, there’s still some inequity, in that you know you’re not going to be able to serve everyone, right? That’s the fundamental challenge you can’t really blame the local government for.
“The lottery is very much a function of the constrained funding environment we often find ourselves in.”
In other words, a lottery is what Los Angeles says it can afford.
Reina and others who study the distribution of rental relief money say there is a way to allocate those dollars even more equitably, but it remains, for now, impractical: Rank each and every applicant by need, including their assets. Cities simply don’t have enough staff to do that, Reina said, though he and other researchers are using Los Angeles’ last rental lottery for an upcoming paper, analyzing how the money would have been distributed if the city had used that theoretical model.
A Los Angeles Housing and Community Investment Department spokesperson confirmed that such a system would be ideal but is impractical and unaffordable given what the city has to work with.
Reina’s group’s research surveyed 220 “first generation” COVID rental relief programs across the country, and found that lotteries indeed even the playing field somewhat for renters. The report also advised housing authorities to conduct outreach to disadvantaged communities and vulnerable groups, along with simplifying the application process.
That’s what Los Angeles did. The city worked with neighborhood councils, FamilySource centers and field representatives of city council members to target low-income renters across the city. The city also targeted ZIP codes with high numbers of renters and placed ads in local newspapers like the Asian Journal, The Korea Daily and La Opinion and in small storefronts.
San Francisco hasn’t declared its methodology for distributing its federal rental relief dollars. San Francisco Housing and Community Development spokesperson Max Barnes told CalMatters the city would announce its rental relief distribution system later this month.
Barnes didn’t respond to questions from CalMatters on the possibility of a lottery, but said the city would use “vulnerability factors” to help weigh applications, including past homelessness. But the city would not make those factors or their importance public “to ensure accurate responses from applicants.”
Irvine, Santa Ana and Anaheim chose a lottery operated by the Orange County United Way. “Equity is the name of the game here,” said city of Irvine spokesperson Kristina Perrigoue.
Ultimately, renters will have to hope they win. Then they have to hope their landlord accepts the deal. It’s a position Lyric worries about every day.
When the pandemic first shuttered the Los Angeles card and board game store they manage, Lyric went through a brief, familiar panic: Where would the food come from, and who would pay the rent?
They learned about the Los Angeles rent lottery through a local tenants’ rights group. Even winning this lottery doesn’t guarantee much peace of mind, and the wait is worse.
“Ideally, rent and mortgages should have been frozen citywide since this time last year,” Lyric said. “But if they wanted to do payouts instead, it should go to every qualified applicant, not based on a lottery that’ll leave taxpayers out to dry if they’re unlucky enough not to receive it.”
For the record: This story has been corrected to indicate that the City of San Diego has a process for prioritizing rental and utility debt. A previous version inaccurately characterized how the city’s rent relief program prioritizes tenants’ debts.
This article is part of the California Divide, a collaboration among newsrooms examining income inequality and economic survival in California.