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Renters, landlords get help through June with Covid relief funds

New law bans rent-related evictions until July, with landlords also benefiting from $2.6 billion program.

California lawmakers reached a late-in-the game agreement Jan. 29, passing legislation that would ban many evictions through June, helping cash-strapped tenants — and offering some much-needed financial relief for landlords.

Gov. Gavin Newsom signed Senate Bill 91 that extends the eviction ban for residents affected by the Covid-19 pandemic for several months, after negotiations with Senate President Pro-Tem Toni Atkins, Assembly Speaker Anthony Rendon and special-interest groups, including the California Apartment Association.

“COVID-19 continues to devastate communities across our state and too many Californians remain one paycheck away from losing their apartments or homes,” Newsom, Atkins and Rendon said in a joint statement. “These families need protection and relief now.”

$2.6 billion in Covid relief to help renters, landlords

Indeed, about 240,000 Californians owe $1.7 billion in rent, according to the Federal Reserve Bank of Philadelphia. And multiple reports say 1 million Californians could face eviction down the road related to the pandemic.

Under the new law — called the strongest renter protection in the nation by Newsom — the state will establish a rent subsidy program tapping $2.6 billion in federal Covid relief aid, and ease a mountain of debt for renters and landlords.

The law bans evictions of tenants who have been paying at least 25% of their rent since September 2020, and can prove a financial hardship from Covid, such as a cut in pay, reduced hours or a job loss. The State Rental Assistance Program will help low-income renters most at-risk with unpaid back rent.

Up to 1 million Californians could be evicted related to the pandemic. Monkey Business Images/Shutterstock

80% of rent guaranteed for property owners

Property owners who participate in the program are eligible to receive 80% of rent owed between April 1, 2020 and March 31, 2021, as long as they agree to waive the other 20% and not evict tenants.

If landlords don’t agree to the assistance but their tenants apply for the financial help, then the program would cover up to 25% of the rent. The program will also pay 25% of rent to landlords for up to three months beginning in March 2021.

Landlords must let renters know about the available relief before moving forward with evictions. And judges could curb damages if landlords reject the state program and take renters to court, officials say.

‘Some owners are on the brink of losing their homes’

Assemblyman David Chiu, who introduced legislation in December to extend the eviction ban through the end of 2021, says SB 1 is “far from perfect” and urges lawmakers to work on another bill that will “address gaps and provide relief to additional tenants.”

But the new law may be the best option for financially hit tenants — and property owners.

In a statement, the California Apartment Association says “getting dollars to landlords is imperative. Many landlords have not received rent in over a year, and some owners are on the brink of losing their homes.”

Feature photo of eviction notice and face mask by Can Be Done/Adobe Stock

Ron Trujillo

Longtime business journalist-turned-public relations executive who enjoys reporting on residential real estate in his spare time. He can be reached at ron@calhomenews.com.