(CN) — The extreme economic pressures wrought by the coronavirus pandemic have turned hundreds of thousands of tenants against tens of thousands of landlords in what one federal judge has called “but for the shooting, a war in every real sense.”
But the courtroom should not be the battlefield, he said.
U.S. District Judge Dean Pregerson upheld an eviction moratorium in Los Angeles as “eminently reasonable under the extraordinary circumstances,” and exhorted lawmakers to devise a solution that helps both property owners and renters.
“Landlords and tenants alike are victims of the virus, both literally and economically. Tenants should not have to live in fear of eviction because of a calamity that was not of their making. Landlords should not have to live in fear of losing their hard-earned investments in our community because of a calamity that was not of their making. Our citizens should not have to fight each other to avoid economic and personal ruin,” Pregerson wrote in a ruling issued Friday.
Los Angeles temporarily halted evictions for unpaid rent, unauthorized occupants, and other “nuisances related to Covid-19” via an ordinance adopted unanimously by the City Council on May 6. The prohibition on evictions extends for 12 months past the expiration of a citywide “state of emergency,” giving tenants one year to pay back rent. Landlords would be able file eviction actions against tenants with unpaid rent after that 12-month grace period ends, but they cannot charge late fees or interest.
In June, The Apartment Association of Greater Los Angeles, which represents landlords and managers of some 55,000 properties in the city, filed a federal lawsuit challenging the ordinance as an unconstitutional impairment of landlords’ contract and property rights.
But Pregerson said despite its interference with landlords’ reasonable contractual expectations, the moratorium is nonetheless necessary enough to survive a motion to set it aside.
“The economic damage the pandemic has wrought, if left unmediated by measures such as the city moratorium, would likely trigger a tidal wave of evictions that would not only inflict misery upon many thousands of displaced residents, but also exacerbate a public health emergency that has already radically altered the daily life of every city resident, and even now threatens to overwhelm community resources,” Pregerson wrote. “The hardships wrought upon residential landlords as an unintended consequence of the city’s efforts are real, and are significant, but must yield precedence to the vital interests of the public as a whole.”
City Attorney Mike Feuer praised the ruling in a statement.
“This was a vital victory, because our eviction moratorium is preventing thousands of tenants from losing their homes in the midst of the pandemic,” Feuer said. “Looking ahead, I renew my call for our federal government to provide long-awaited aid to Covid-affected tenants, so they can pay their landlords and remain housed while our nation’s jobs market recovers.”
Pregerson noted the rent crisis has been insufficiently addressed by local ordinances and lawsuits.
“Courts are an imperfect tool to resolve such conflicts,” he wrote. “So too are ordinances and statutes that shift economic burdens from one group to another. The court respectfully implores our lawmakers to treat this calamity with the attention it deserves.”
The apartment association’s executive director Daniel Yukelson said Pregerson “hit the nail on the head.”
“Landlords are suffering greatly today because of the eviction moratoriums and unfortunately there is not a more equitable solution to this crisis,” he said Monday. “The solution needs to really come from the government and not private citizens who are being forced to provide free housing and give out private welfare.”
While the city has set up a program to provide low-income households with $100 million in emergency rental assistance by the end of the year, Pregerson acknowledged that the funds probably won’t be sufficient to offset the shortfall. Yukelson agreed.
“We are seeing some cases of funds being made available for tenant assistance and we think that’s the right answer, but there’s not enough funding to help everyone,” he said.
This past August, the Legislature passed Assembly Bill 3088, a statewide eviction moratorium that allows local ordinances enacted prior to August to remain in place. Under the statewide Tenant, Homeowner, and Small Landlord Relief and Stabilization Act, landlords will be able to sue tenants in small claims court for rental debt starting March 1, 2021. It also essentially forgives rent missed from Sept. 1, 2020, through Jan. 31, 2021, so long as tenants pay 25% of their rent from Sept. 1 onward.
Yukelson said it will be extraordinarily difficult for landlords to collect unpaid rent in small claims court. “Once you get a judgment, executing it and attaching to a bank account that has limited funds in is nearly impossible,” he said. “So once again landlords are left holding the bag.”
Eviction protections enacted in AB 3088 will terminate in January. Yukelson said lawmakers should work with landlords to draft a more equitable solution that considers mortgage and property tax obligations, but he isn’t optimistic.
“I’m waiting for the next shoe to drop. Who knows what this governor and the Legislature will cook up next. I’m skeptical it will be a solution that will help landlords at all,” he said.
Meanwhile, he said the apartment association will appeal Pregerson’s ruling to the Ninth Circuit.