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Tenants caught up in a California fraud probe are told to return rent-relief payments

LEILA FADEL, HOST:

California has provided more than $4 billion in emergency rent relief. The pandemic payments were a lifeline for many people. But now the state is telling thousands they have to give that money back because they were paid by mistake. From member station KQED, Vanessa Rancano reports.

VANESSA RANCANO, BYLINE: When Napa resident Flor Rodriguez got a $9,000 rent relief check in the mail last December, it felt like an answer to her prayers.

FLOR RODRIGUEZ: (Non-English language spoken).

RANCANO: Even before the pandemic started, it was hard for her to make rent. First, wildfires put her out of her job picking grapes in Northern California's Napa vineyards. Then COVID slashed her hours cleaning houses. She could no longer come up with $1,650 a month for her apartment.

RODRIGUEZ: (Non-English language spoken).

RANCANO: Then a social worker told Rodriguez about the state's COVID rent relief program. She got approved and says she used the money to cover her back rent. But five months later, in April, the state told her she had to return the money because she had provided, quote, "inconsistent or unverifiable information" on her application.

RODRIGUEZ: (Non-English language spoken).

RANCANO: She says she had no way to pay it back. She's a single mom and worried about what would happen to her 9 and 2-year-old daughters.

RODRIGUEZ: (Non-English language spoken).

RANCANO: California has issued almost 19,000 notices to tenants and landlords who were originally approved for rent relief, saying they actually weren't eligible. The vast majority of those went to people who'd already received the money from the state. It's part of an effort to catch fraud, says Jessica Hayes. She's the state administrator who manages the program. She declined to be interviewed for broadcast but says program officials were caught between carefully handing out taxpayer money only to those who qualified and a mandate from state lawmakers to get aid out quickly. That made catching all fraud on the front end difficult.

LORRAINE LOPEZ: Once you're approved, any normal person thinks, that's it. I'm done. My application is good. I've paid my landlord. I'm in a good place. I'm not going to be evicted.

RANCANO: Lorraine Lopez is a senior attorney for the Western Center on Law and Poverty. She's part of the legal team suing the state over rent relief denials. She says tenants like Rodriguez, who desperately needed the help, have gotten wrongfully caught up in efforts to prevent fraud.

LOPEZ: And that's incredibly scary for folks who already don't have a lot of money, who are trying to get back on their feet.

RANCANO: The state does give applicants a chance to appeal. But the lawsuit argues the process is overly difficult. Many of the denial notices don't specify what additional material an applicant would have to provide to keep the money. This summer, a judge ordered California to stop issuing both demands for repayment and denials while the lawsuit moves forward. In Napa, Flor Rodriguez is still waiting on her appeal. Meanwhile, she's preparing to move.

CARMEN: (Cooing).

RODRIGUEZ: (Non-English language spoken).

CARMEN: (Babbling).

RANCANO: She's at home with her 2-year-old daughter, Carmen, in her arms.

RODRIGUEZ: (Non-English language spoken).

RANCANO: On this day, she's getting a ride from a friend to go see another apartment. But Rodriguez is worried. Her appeal is still pending. And the rental market is incredibly tight.

For NPR News, I'm Vanessa Rancano in Napa. Transcript provided by NPR, Copyright NPR.

Vanessa Rancaño