SACRAMENTO — The California Legislature has less than a month left in its pandemic-shortened session to deal with one of the state’s worst economic crises in decades, and there’s no greater emergency than what to do about the rent.
Millions of residents who lost their jobs this spring as the state shut down to slow the spread of the coronavirus now fear they will lose their homes as well. One in 7 tenants in California did not pay rent on time last month, according a survey by the U.S. Census Bureau, and nearly 1 in 6 doesn’t expect to pay on time in August either.
Several bills are moving through the Legislature to prevent what many worry could be a wave of evictions, potentially compounding California’s crippling homelessness crisis. But landlord groups and tenant advocates are divided, raising financial, legal and logistical concerns over the competing approaches.
An emergency judicial order that largely halted eviction proceedings for the past four months could end as soon as Aug. 14, heightening the sense of urgency in Sacramento.
“The clock is ticking. We only have two weeks to avoid complete catastrophe,” said Assemblyman David Chiu, D-San Francisco.
His AB1436 is one of two major legislative proposals to avert mass evictions. It would prohibit landlords from evicting tenants who cannot pay their rent because of a loss of income related to the pandemic before April 1, 2021, or 90 days after the end of the statewide state of emergency, whichever is sooner. Tenants would then have another year to make up the missed rent.
Homeowners experiencing financial hardships, including landlords, could seek a forbearance of up to 12 months for a residential mortgage.
The other bill dealing with evictions is SB1410 by state Sens. Anna Caballero, D-Salinas, and Steven Bradford, D-Gardena (Los Angeles County). Under the voluntary program, landlords would receive tax credits to forgive the rent of tenants who cannot pay because of the pandemic. Landlords could use the tax credits, which would be equal to the amount of rent, starting in 2024 or sell them to another taxpayer sooner for cash.
Tenants would pay back their rent interest-free to the state over the course of 10 years, also starting in 2024, though California would be on the hook for any money it doesn’t recover. That could amount to billions of dollars.
Another measure that would have frozen evictions and set up a repayment period for back rent, AB828 by Assemblyman Phil Ting, D-San Francisco, was held in committee without receiving a hearing. Sen. Connie Leyva, D-Chino (San Bernardino County), is also advancing SB915, which deals more narrowly with evictions from mobile home parks.
Tenant advocates prefer Chiu’s uniform statewide plan, which would protect residents regardless of what local regulations exist or whether their landlord is willing to enter an agreement. Anya Lawler, who lobbies on behalf of the Western Center on Law & Poverty, said the bill’s mortgage protections for landlords could help the state avoid a foreclosure crisis such as the one during the last recession.
“The eviction court is not the place to deal with the financial consequences of this,” she said.
Lawler said the Senate measure offering tax credits for landlords who forgive rents is creative, but that its voluntary nature would leave out many tenants. Any available money would be better spent on building housing, she added.
Many Californians are enduring financial hardships during the pandemic, Lawler said, and landlords shouldn’t be exempt.
“The state can’t possibly foot the entire bill here,” she said. “If we have a lot of money, is that what we want to spend it on?”
The Chiu measure is a nonstarter, however, for major landlord groups like the California Apartment Association, which represents owners and developers of rental properties.
Debra Carlton, a lobbyist for the association, questioned the legality of requiring out-of-state banks to provide mortgage forbearance for California homeowners. She’s also skeptical that landlords will ever recoup much rent, given the length of time tenants would be able to withhold payments.
“By the time April 2021 comes around, a tenant may have not paid for a year,” she said. “There’s no way to catch that up.”
Carlton said tenants should have to prove they were financially harmed by the pandemic, so benefits don’t go to people who participate in a rent strike when they can afford to pay. She called those strikes “so unethical.”
She said the Senate bill should also include more direct help for property owners, some of whom won’t ride out the downturn otherwise.
“These small owners, who use the rent as their retirement or to pay for their mortgage, just cannot wait until 2024,” Carlton said.
Neither bill is set to be heard again until Aug. 12, just two days before state Chief Justice Tani Cantil-Sakauye has said she wants to lift an emergency rule that the Judicial Council adopted in April freezing eviction proceedings unless necessary for public health and safety. If that happens, lawmakers are bracing for the possibility that tenants could be left for months without any resolution.
Even if the Legislature passes a bill before the end of its session Aug. 31, it would not become law until Jan. 1. Lawmakers could add an urgency clause that would allow a bill to take effect immediately upon the governor’s signature, but that requires a two-thirds vote in both houses.
Legislators are also looking at the possibility of putting eviction protections into a budget trailer bill, which would take effect immediately with a simple majority vote. Such measures are intended to implement the budget, however.
Caballero said she is hopeful of passing something, noting that more than two-thirds of senators voted for her bill in June.
“There is an understanding in the Legislature that this looming housing crisis — and it’s on top of another housing crisis — would be devastating in every single one of our districts,” she said.
Tenant advocates, meanwhile, are pushing Gov. Gavin Newsom to take more sweeping executive action that could serve as a backstop while the legislative process plays out. Newsom issued an executive order to halt evictions in March, but advocates criticized it as too complicated and limited.
“Acknowledging that more must be done as the pandemic and its economic consequences continue, the administration is working with legislative leaders and stakeholders to craft further, balanced protections,” Jesse Melgar, a spokesman for Newsom, said in a statement.
The uncertainty, including questions about whether Congress will approve financial aid for landlords and renters as part of a coronavirus relief package, has everyone preparing for the worst-case scenario. Lawler said tenant advocates are already working to find lawyers to fight eviction cases in court.
“The whole thing is going to be chaotic,” she said. “There’s no way around it.”
Alexei Koseff is a San Francisco Chronicle staff writer. Email: alexei.koseff@sfchronicle.com Twitter: @akoseff
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August 03, 2020 at 06:00PM
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Rent is coming due in California: ‘Two weeks to avoid complete catastrophe’ - San Francisco Chronicle
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