California lawmaker aims to extend pandemic eviction ban through 2021
Extension of federal and state bans on evictions may not be enough says a state lawmaker who proposes the state keep the ban through 2021.
“California is staring down an eviction cliff if we don’t extend it. People still can’t pay their rent,” California Assemblyman David Chiu, D-San Francisco, told the Business Journal.
The current moratorium expires Feb. 1, 2021. Chiu is concerned much of the state’s population won’t be vaccinated until halfway through 2021 and possibly under shutdown orders. On Dec. 7, he introduced Assembly Bill 15.
In addition to requiring tenants to sign a declaration of “COVID hardship”, AB15 would mandate a tenant to pay a quarter of the monthly rent retroactively from Sept. 1 through next year to avoid eviction. To get the remainder, property owners will need to sue in small claims courts.
Chiu labels the bill “a compromise” between two sides weighing tenant and landlord needs by “requiring 25% of the rent if (the tenants) show hardship.”
AB 15’s concession doesn’t go far enough to help property managers and owners. Some North Bay landlords contend state lawmakers like Chui may assume in a “misnomer” that all who own property are wealthy and can float income to cover the missed payments.
DeDe’s Rentals and Property Management General Manager Keith Becker said that even though 96% of the Santa Rosa company’s tenants in 500 units are paying in full and on time, a handful of renters are behind on their rent and know they’re allowed to be “without repercussions.” One, who is $17,000 in arrears, has appeared to use the system because he can, Becker claims.
“I have no expectation of collecting,” he said. In this case, the property owner is floating the loss through reserves.
Becker contends that extending the moratorium through all of next year goes too far in asking property owners renting their places to hang on. He’d rather see the time of the moratorium cut in half in case the economy picks up next summer.
And to make matters worse for property managers, they are not allowed by law to question a tenant’s financial status, Becker pointed out.
“We’re trying to be as generous as we can be. All of us want to see the end of this. We’re all in the same struggle. We don’t want to add to the homeless population because the (COVID-19) risk is greater,” Becker said.
State officials are witnessing a ticking time bomb.
A U.S. Census Bureau survey conducted in mid-November found more than 2 million renters in California households reported “little to no confidence” in their ability to pay next month’s rent. The thought is prolonged stay-at-home orders that keep some people out of the workforce will add to the problem.
U.S. rents due by over a month amount to $1.7 billion, the Federal Reserve reports.
Still, Sonoma County rental property owner Jennifer Coleman said she and her business partner may sell their nine units if the state extends the moratorium.
If that happens, she will “only sell the houses as owner occupied,” meaning renters will have to move. The maneuver would be unfortunate for Coleman because she’s also grateful for the relationships she has with her tenants.
If others follow Coleman’s lead, there may be disruption in the housing market. Investors may shy away from making speculative purchases.
“(The state doesn’t) understand landlords,” Coleman said.
Chiu has also sponsored AB 16 to establish a statewide financial assistance rental program. Details are being worked out on this plan.
In the meantime, Marin County has discovered no shortage of need and interest in its local relief fund offered with Community Development Block Grant and Marin Community Foundation funds through the $2 trillion CARES Act — the federal government’s first major pandemic relief program.
About $3 million have been doled out to 1,470 recipients by the county since it adopted the program last March. The need is greater, with 2,430 applicants among landlords on a waiting list for the remaining $2.8 million.
Every effort helps the cause, but counties can only go so far with this gigantic issue, California Apartment Association spokesman Alex Khalfin insists.
“It’s a misnomer to think local governments will solve this problem,” Khalfin said. “Overall, not enough is being done to help the mom and pop property owners. We basically just keep punting (the problem) down the line.”