Lawmakers approve last-minute relief for renters and earmark up to $2.6 billion for landlords willing to forgive unpaid rent accrued during the pandemic.
SACRAMENTO, Calif. (CN) — Stopping a potential mass-eviction wave set to crest next week, California lawmakers on Thursday barred evictions through June and earmarked $2.6 billion to cover past-due rent accrued during the pandemic.
Approved in overwhelming bipartisan fashion, lawmakers said extending the emergency relief was necessary to avert an eviction crisis budding in a state already saddled with massive unemployment and homelessness.
“With the economy reeling and so many people out of work, it is absolutely essential that we help people struggling to keep a roof over their heads,” said state Senator Bill Dodd, a Napa Democrat. “Extending the eviction moratorium is a commonsense measure to support tenants and landlords. It is one of the key steps we are taking to ensure California’s economic recovery as we beat this pandemic.”
The Assembly and Senate rushed approval to the bills on Thursday, three days after the renter protections were introduced by legislative leaders and Governor Gavin Newsom.
Under the plan, the current eviction moratorium set to expire Feb. 1 will be extended through June. The protection will apply to renters who are able to pay at least 25% of their monthly rent and can show they are suffering financial hardship due to the pandemic.
But this time around the state’s strategy includes financial relief tenants and their landlords.
Along with the moratorium, the lawmakers are proposing the state spend $2.6 billion in federal pandemic relief to reimburse landlords who have been forced to accept reduced rents since last September. The relief comes with a caveat however, as before receiving the funds, landlords will have to forgive 20% of the unpaid rent and agree to forgo evictions.
Assemblywoman Eloise Gomez Reyes said the budget trailer bills are vital to preventing a rush of new homeless Californians and propping “mom and pop” property owners.
“The pandemic has created a mountain of unpaid rental debt which has caused instability and financial hardships for both tenants and landlords,” Reyes said before the Assembly vote.
According to a recent analysis by the state’s Legislative Analyst’s Office, California renters are a combined $400 million behind since March 2020. The report further credited the eviction moratorium and federal stimulus packages with keeping countless California families in their homes during the pandemic, but noted rental distress will remain a problem as long as the pandemic persists.
Lawmakers and Newsom enacted the current moratorium last August, calling it a stopgap measure amid reports that up to 40,000 renters in Los Angeles had not paid rent since the pandemic began. Under the plan, tenants have been required to swear to pandemic-related financial distress under penalty of perjury, and “high-income” renters making at least 130% of a county’s median income needed to submit actual proof they lost their job or income.
But with the pandemic killing Californians at a record-high pace and unemployment once again on the rise, the Democratic-controlled Legislature has been forced again to act. The renter package is the first early budget item the Legislature has approved in the early days of the session.
“No one should lose their home during the pandemic,” said the youngest member of the Legislature, Assemblyman Alex Lee, D-San Jose. “As we continue this battle of defeating the virus, it’s imperative that we adopt protections for tenants so that they’re able to stay in their homes, as well as provide relief to our small landlords that may have suffered income loss for nearly a year.”
Under the plan, landlords that refuse to forgive the unpaid rent can still qualify to have 25% of the debt covered by the state.
The California Apartment Association, which helped negotiate both moratoriums, applauded the votes but said the state must now follow through with its promise to help struggling property owners.
“Many landlords have not received rent in over a year, and some owners are on the brink of losing their homes. The administration must work quickly to get the dollars to landlords at the rate promised: 80% of the past rent owed by the tenant,” said association president Debra Carlton in a statement.
The bills cleared both chambers in a matter of hours with a lone no vote from Sacramento-area Republican Assemblyman Kevin Kiley, who argued easing business restrictions and jumpstarting local economies would have a bigger impact than rent relief.
During a virtual signing ceremony Friday morning, Newsom complimented Assembly Speaker Anthony Rendon and Senate President Pro Tem Toni Atkins for fast-tracking the legislation. He said the state would strive to get the federal dollars out quickly and that he was proud the Legislature acted in bipartisan fashion.
“The issue of eviction is the issue of this moment,” Newsom said. “The economic anxiety that so many people are struggling and suffering through is the issue and we have not lost sight of that.”