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Economy and Finance

‘There Is No Redo On This’: Eviction Crisis Looms In California As Lawmakers’ Timeline Dwindles

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Andrew Nixon
/
CapRaadio

Californians who have fallen behind on housing payments due to the coronavirus are set to lose protections and could face evictions beginning Sept. 1 — unless state lawmakers step in.

Two bills to address what one lawmaker described as a “massive wave of evictions” with “catastrophic” consequences are moving through the state capitol, but legislators are running out of time as their own Aug. 31 session deadline approaches.

“When the temporary eviction ban expires, all renters in our state will immediately owe any and all unpaid rent at once,” Assemblyman David Chiu (D – San Francisco) said Tuesday. “If we don't change state law in the next two weeks, we will see a massive wave of evictions. This will be catastrophic for tenants, property owners, homelessness and COVID-19 spread.”

Chiu made an urgent case for a potential legislative fix before the Senate Judiciary Committee Tuesday.

Assembly Bill 1436 would give renters affected by the coronavirus pandemic until April 1, 2022 to pay back rent. Struggling homeowners, along with smaller landlords who own fewer than five units, would also receive up to one year of mortgage forbearance. All other landlords would receive six months forbearance.

Chiu made clear the bill would not cancel anyone’s rent, but rather give renters put out of work by shutdown orders “time to get back on their feet” and catch up on missed payments.

After a six-hour hearing where hundreds of members of the public called in to both support and oppose the measure, the Senate committee approved the bill 6-0, with three members absent or abstaining.

Some members raised questions about potential court challenges and concerns that the bill would kick the can down the road on the issue, delaying — and growing — the pile of bills that will eventually come due.

Sen. Melissa Melendez (R – Lake Elsinore) warned some banks could seek lump sums from landlords and borrowers and asked whether “it’s realistic to assume a renter is going to come up with a year’s worth of rent” due at the end of the grace period.

Chiu acknowledged the bill is simply a stopgap measure and believes it may not be enough. But he warned the consequences of not passing anything and “evicting a generation of renters … would be much more catastrophic than what we’re proposing here.”

“There is no redo on this,” he said, noting there would likely be continued changes to the bill as it goes to the Senate floor and the eviction deadline looms even closer.

A separate bill to address the looming crisis, authored by top Senate Democrats including Senate President Pro Tem Toni Atkins (D – San Diego), has already received committee approval in the Assembly.

That bill, Senate Bill 1410, would allow tenants and landlords to enter into voluntary “COVID-19 eviction relief agreements” that would allow renters to defer payments during the emergency without fear of eviction. Landlords who participate would receive tax credits beginning in 2024 to recoup lost income.

Democratic lawmakers, landlords and housing advocates say the simplest fix is more money from the federal government. The now-expired $600 weekly unemployment boost helped many people stay in their homes even as work dried up.

“I wish we weren’t in this option and we actually had adequate capital going to those for pandemic relief,” said Sen. Henry Stern (D– Calabasas)

It’s unclear if legislative leaders will agree to advance one bill over the other, send both to Gov. Gavin Newsom’s desk, or try to hammer out a new compromise. Last week, Newsom cited ongoing negotiations about an eviction solution but has been mum on details.

Property owners say neither piece of legislation goes far enough to protect landlords and ensure they get paid.

In a statement, the California Rental Housing Association’s Jack Schwartz called them “overbroad legislative proposals that will lead to bankruptcies of rental housing owners since they fail to provide any real financial relief for owners who have not been paid.”

Copyright 2020 Cap Radio