With days to spare before a statewide eviction moratorium was set to expire, Gov. Gavin Newsom signed a law extending the ban until June 30, 2021, impacting millions of Californians faced with economic hardships brought on by the COVID-19 pandemic.
The Judicial Council anticipates 240,000 evictions filings this year, double the amount from 2019-2020, “given the potential universe of 903,000 households at risk.” And the Federal Reserve Bank of Philadelphia noted in an October 2020 report that more than 239,600 California households owe $1.67 billion in rent.
The legislation signed Friday, SB 91, includes a pause in evictions for tenants who declare under penalty of perjury an inability to pay all or part of the rent due to a COVID-related reason. Tenants are still responsible for paying unpaid amounts to property owners, but those unpaid amounts cannot be the basis for an eviction, even after the moratorium ends.
Tenants who pay at least 25% of their rent — either monthly or in one lump sum — will receive eviction protections.
Program for Landlords
The law also creates a program for eligible landlords to receive rent subsidies, provided from $2.61 billion in federal funds, that will cover up to 80% of the total amount of rent in arrears, provided that the landlords forgive the remaining 20% and don’t seek evictions.
The program aims to pay 25% of rent arrears for tenants applying for assistance where the landlord does not agree to forgive unpaid amounts or forgo evictions.
The program requires landlords to notify tenants who owe back rent of the availability of federal funds to assist them, and landlords will be prohibited from evicting tenants if they failed to notify them.
Some eligibility rules apply. This includes that the renter must have an income no more than 80% of the area median income, the renter must demonstrate specified financial hardships such as unemployment or income reduction, and also must show that there is a risk of homelessness or housing instability.
The program will prioritize people whose incomes are no more than 50% of the area median income.
Vote Nearly Unanimous
SB 91 passed 71-1 out of the Assembly, with Assemblyman Kevin Kiley, R-Rocklin, voting no. It also passed 34-0 on concurrence in the Senate.
In a tweet Thursday afternoon, Assembly Speaker Anthony Rendon, D-Lakewood, wrote that California’s tenants, impacted by COVID-19, need help now to avoid homelessness.
“This is our first step in protecting tenants and small landlords, not our last. We have more work to do,” said Rendon, who also delivered a speech on the bill.
In addition, a press release from the State of California states: “Continuing efforts to address the housing availability and affordability crisis that has been exacerbated by the COVID-19 pandemic, the Governor’s proposed 2021-22 State Budget provides $500 million for infill infrastructure and an additional $500 million in low-income housing tax credits to support low-income housing development. The Administration is streamlining and reorganizing state housing programs to maximize housing production, while also continuing to support affordable housing.