CALIFORNIA — A moratorium protecting some renters significantly affected by the coronavirus pandemic from being evicted will expire Monday. As that deadline approaches, the California Legislature could vote on a bill to extend it as soon as Thursday.
Gov. Gavin Newsom and state lawmakers on Monday introduced a bill to extend the partial eviction moratorium through June 30, which would give qualifying renters five more months of protection.
The bill would carve out a plan to divide $2.6 billion in federal aid quickly among renters and property owners in the Golden State. Leveraging that funding, landlords could be offered an incentive to forgive some of the back rent their tenants have racked up since April last year.
For renters, the text of the bill presents a subsidy to distribute some $1.5 billion of the federal subsidy in renters assistance. Families and individuals whose incomes are at 80 percent or less of the median would be eligible for that assistance.
“COVID-19 continues to devastate communities across our state, and too many Californians remain one paycheck away from losing their apartments or homes," Newsom, Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon said in a Monday statement. "These families need protection and relief now.”
Here's how it would work if it passes. Landlords would be paid up to 80 percent of their tenants' missed rent if the remaining 20 percent balance is forgiven and property owners agree not to pursue evictions.
But if a property owner declines to forgive the unpaid rent, the courts could reduce the amount owed, and the landlord would be reimbursed up to 25 percent of the back rent. That's only if the tenant meets the eligibility requirements.
"It’s one thing to get protections and another to be able to pay your rent when it is due," Newsom said in a news briefing Monday. "We also address the issue of small landlords that also have to pay mortgages."
Under the existing eviction moratorium, landlords can't evict a tenant as long as 25 percent of the rent was paid. This bill would extend that policy, allowing renters to pay 25 percent monthly or pay off a lump sum by June 30.
If it passes, the bill is sure to help, but it remains unclear whether it will be enough to cover the debt accrued by many of California's low-income renters since April.
California renters owe an estimated $400 million in unpaid rent, according to a Jan. 19 document published by the legislative analyst's office. This number is down from the $1.7 billion estimated for California in a nationwide analysis in December of last year, but the state's assessment does not include the underlying rental debt that existed before the onset of the coronavirus pandemic.
"While the proposal doesn’t go as far as I want — more work lies ahead — we must pass it this week to keep people housed and help people avoid huge rent debt," Sen. Scott Wiener (D-San Francisco) said.
California's unemployment rate spiked 9 percent in December amid sweeping closures and surging cases, and many renters could be sinking even deeper into debt.
Lower-income households have experienced more job losses during the pandemic, according to the legislative analyst's office. Those with an annual income of less than $50,000 made up 15.1 percent of the estimated unemployed.
In another effort to extend a hand to struggling, low-income households, lawmakers will also consider Newsom's proposed Golden State Stimulus. If approved by the Legislature, Californians with an annual income of $30,000 could receive a one-time $600 check in tandem with federal aid.
Newsom is encouraging lawmakers to act quickly on his Immediate Action Plan, which includes these checks. "This will act as a bridge while we wait for more federal relief," Newsom tweeted Saturday.