Many in California are dealing with the pains of the coronavirus pandemic, including millions of renters and their landlords across the state facing what state Assemblymember David Chiu calls an upcoming "eviction cliff."
According to a Census Bureau survey, over 2 million Californians said they either wouldn’t be able to pay next month’s rent or foresaw significant challenges in paying it.
Some renters who have economic hardships due to COVID-19 have been given rent relief through an eviction moratorium enacted by AB 3088, as long as they continue to pay at least 25% of their total monthly rent. By the end of January, this moratorium ends unless state lawmakers can come together and draft up a solution. Chiu has introduced a bill in the California Legislature that would extend the eviction moratorium, set to expire Jan. 31, through 2021.
Homeowners also are given some relief by protecting them from foreclosures if they’ve been up-to-date on house payments until February 2020, however California Apartment Association Executive Vice President Debra Carlton said that the current bill is not doing enough for landlords to keep their properties running.
“There’s been no other industry here in California that’s been asked to provide their product or service for free,” Carlton said on CapRadio’s Insight. “There’s really nothing in this bill that provides rental property owners any assurance that they’re going to be able to remain in business … not to mention [paying] property taxes and mortgage expenses are not protected under state law.”
Chiu said that he is nervous about the implications of the quickly-arriving eviction moratorium end-date on renters if an extension isn't passed.
“We can’t, during this stage, this very deadly stage of the pandemic, have tens of thousands of folks forced from their homes,” Chiu said. “That would make COVID much more likely to spread and have devastating health consequences.”
According to a UCLA study, 43 states originally enacted an eviction moratorium, and by the summer, 27 of those states lifted their eviction pauses. After controlling for numerous factors like stay-at-home orders, lifting these orders could have resulted in an average of 433,700 cases and 10,700 additional deaths.
“And there have also been estimates, one in California, of what the California moratorium has prevented. Just in the first part of this year alone, they’ve estimated over 186,000 COVID cases were prevented. Over 6,500 lives were likely saved,” Chiu said. “So this is life or death.”
If California lawmakers don’t extend the moratorium, landlords will be able to bring their tenants to small claims court come March 1.
“But to be clear, they can’t use that past rent to evict the tenant,” Carlton said. “So tenants are protected for that unpaid rent in 2021 when it comes to evictions.”
The newest proposed solution is AB 16, to replace the current moratorium, AB 3088. Both renters and smaller “mom and pop” landlords would receive financial support if AB 16 passes.
“California is really unique. About 50% of our rental housing is in four units or less, and 25% of that are single family rental homes. So we have a really large population of small rental property owners here in California,” Carlton said. “And I would say those are the ones who can’t even balance rent that’s being paid from rent that is not being paid.”
Many landlords are also seeing people flee cities to purchase homes in more isolated neighborhoods where they can have limited contact with their neighbors. This has caused not only there to be a large vacancy rate in rental dwellings, it’s also caused real estate around California to skyrocket up 25% in some places.
"Really, what this is going to come down to, and Assemblymember Chiu said it right, is we need some financial dollars to help tenants pay the rent," Carlton said. "The state had reported that they were $54 billion in the hole at the end of 2020, but we found out that wasn't true. We have a windfall of about $30 billion. We're saying, let's use some of that dollars to protect tenants and owners so that we can continue to have housing for tenants here in California."
Carlton said that many rental property owners have just “left their keys” and “walked away” from their property. “I think that’s a big concern for [the] Legislature. People [are] even leaving California.”
While renters and landlords often have competing interests, Chiu believes that the two sides can reach a mutual agreement.
“I think a real point of common interest between the two sides of this discussion between tenants and landlords is everyone knows that we need significant financial assistance to help folks get back up on their feet because we know that so many renters will not be able to pay that debt,” Chiu said.
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