SACRAMENTO, CALIFORNIA – California will extend its ban on evictions and cover back rent and utility payments for people who fell behind during the pandemic under a $7.2 billion plan announced Friday that Gov. Gavin Newsom called the “largest and most comprehensive renter protection deal in the United States.”
California placed a moratorium on evictions after Newsom imposed the nation’s first statewide shutdown in March 2020 and ordered most businesses to close and people to stay home to slow the spread of the coronavirus.
That protection is scheduled to expire Wednesday. The new agreement between Newsom and legislative leaders will extend the eviction moratorium by three months and pledges to pay off all unpaid rent and utility bills for qualifying renters from April 2020 through Sept. 30 of this year.
No one knows exactly how many people will qualify and how much it will cost. But the state has $5.2 billion to spend on back rents, enough to provide $10,400 each to a half-million tenants, all of it coming from the federal government.
“I think that everyone is breathing a sigh of relief,” said Madeline Howard, senior attorney for the Western Center on Law and Poverty.
Newsom’s administration believes the pot of money is more than enough to pay off rental debts for everyone eligible. Another $2 billion in state money will cover people’s unpaid utility bills.
The proposal, which will be voted on in the Legislature next week, also gives tenants more time to apply for assistance after a landlord tries to evict them while also masking their credit and rental history so those debts won’t show up and prevent them from getting future housing.
Crisis before COVID
California has some of the most expensive rents in the country, driven by a statewide affordable housing shortage. In Los Angeles, the median rent in May was about $2,600, and in San Francisco it was $2,700.
About 25% of California’s renters pay at least half of their income on housing costs, a figure that includes rent and utilities, according to the California Department of Finance.
“Our housing situation in California was a crisis before COVID, and the pandemic has only made it worse — this extension is key to making sure that more people don’t lose the safety net helping them keep their home,” said state Senate President Pro Tempore Toni Atkins, a Democrat from San Diego.
To qualify, people may only earn 80% or less of their area’s median income and must have been affected by the pandemic — a nondescript requirement everyone can meet.
The federal government is giving every state money to cover back rent during the pandemic. Some states, like Washington, have also extended their eviction bans through the end of September. Others, like New Hampshire, are also offering rental assistance of up to 15 months.
Californians who aren’t eligible to have their unpaid rent covered can still qualify for the eviction ban, but only if they pay at least 25% of what they owe through Sept. 30. If they do that, landlords can still sue them to try to recoup that money, but they can’t evict them for it.
This will be the third time California has extended its eviction ban. While some landlords say they are happy to have the state cover all of some tenants’ rental debt, they are angry the state has continued to halt evictions.
The ban has caused “irreparable harm” to landlords who “have been under severe financial distress for the past 16+ months,” said Christine LaMarca, president of the California Rental Housing Association.
“We are very concerned as to when this moratorium will actually end,” she said.
California began offering rental assistance earlier this year, using a previous allocation of federal money. As of Thursday, 54,520 tenants have requested $616.4 million in assistance, said Russ Heimerich, spokesperson for the California Business, Consumer Services and Housing Agency.
But the state has paid only $61.6 million of those requests so far.
Those figures don’t include applications made to some of the state’s larger cities — including Los Angeles — that operate their own programs. Still, the state’s slow response has frustrated landlord groups.
“Both the federal and state eviction moratoriums would not be necessary if state and local governments were disbursing rental assistance funds to tenants and housing providers in an expedited manner,” said Tom Bannon, CEO of the California Apartment Association.
Newsom acknowledged the state’s slow response, adding the federal government has also been sluggish in getting the money to state governments. Newsom said the application process is laborious, but he said state officials are trying to make it easier.
“We expect with this announcement … we’re going to see more people applying and more money requested,” he said. “Our job is to efficiently — and make sure appropriately, because we don’t want fraud in this space — to get those dollars out as quickly as possible.”