California leaders have reached an agreement to extend the state’s eviction moratorium through the end of June in an effort to stave off an expected surge in housing displacement as Covid continues to spread.
The plan, agreed on by top legislative leaders and the governor, extends until 30 June a state law scheduled to expire next Monday that prevents landlords from evicting tenants who could not pay their rent between March and August because of the coronavirus pandemic and those who have been able to pay at least 25% of their rent.
It would also use federal money to pay off up to 80% of some tenants’ unpaid rent. “It’s one thing to get protections, and it’s another to be able to pay your rent when it is due,” the governor, Gavin Newsom, said during a press conference on Monday.
Low-income renters within 50% of area median income (AMI) who have a strong payback background will be prioritized for the relief program, Newsom said. Rental subsidies would be paid to landlords who agree to forgive 20% of their unpaid rental debts or would cover 25% of late payments for landlords that don’t wish to participate.
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Affordable housing advocates welcomed the extension, but remain concerned that the relief won’t go far enough, especially with so many struggling to keep up with California’s high-priced housing.
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“This plan leaves tenants to the ‘luck of the draw’,” Christina Livingston, the executive director of the tenant advocacy group Alliance of Californians for Community Empowerment, told the Los Angeles Times. “If a tenant has a landlord who wants them to stay, they will get this federal rent assistance. If the tenant is unlucky enough to have a corporate landlord who wants to flip the building, or a racist landlord who doesn’t like them, they won’t receive the relief.”
Last week, a coalition of 60 social justice groups, business leaders, researchers and charity organizations called on legislators to forgive rental debt in-full. They released a letter to officials, along with a new report that shows lawmakers may not have a clear picture about the extent of the growing need.
The new data, derived from surveys conducted by the US Census Bureau and published by the advocacy group Housing NOW and Bay Area Equity Atlas, a research organization, estimates more than 1 million renters – roughly one in five – are now behind on payments. They concluded that Californians are facing more than $3.7bn in unpaid rent, an estimate that is much larger than those of state agencies.
“It is incredibly difficult to know how many renter households are now in distress,” said Carolina Reid, a professor and researcher at University of California, Berkeley’s Terner Center for Housing Innovation. Even so, she said, the data she has seen does not match up with the state estimates, and shows a much higher level of distress.
More than 1.4 million Californians remain out of work and half of those who lost their jobs were making less than $50,000 – even before Covid, many renters were struggling to keep up with California’s exorbitant housing costs.
The economic crunch – felt especially hard among low-income workers – makes it much harder to hang on. Roughly 45% of Californians rent and they pay a premium.
People gather at the LA superior court to call on Gavin Newsom to pass an eviction moratorium, 21 August 2020.
People gather at the LA superior court to call on Gavin Newsom to pass an eviction moratorium, 21 August 2020. Photograph: Lucy Nicholson/Reuters
“People were literally one shock away from losing their homes and their housing,” Reid said. “Covid-19 is not just a singular income shock – it has been multiple income shocks, over a very prolonged time period. We are coming up on a year of largely being sheltered in place in California, and the job losses and the income losses compounded month after month after month, can really take a toll on those households that were already paying too much for rent.”
The aid funds already issued by the federal government last year have had a positive impact but Reid thinks more needs to be done. “This is when we need good governance, she said, adding that along with federal support, it will be essential for state and local governments to deploy those resources in the right way. “What we are learning from this crisis is the need to address housing affordability in a more sustained and profound way.”
California’s Covid-related tenant protections, now set to expire on 30 June, require tenants to pay at least 25% of their rent to stay in their homes, and landlords can sue to collect the rest. California has budgeted an additional $11.7m for courts that are expecting to see roughly 240,000 new eviction lawsuits from landlords in the coming weeks – double the amount in a typical year.
A wave of evictions will compound the state’s already devastating housing crisis, which has worsened during the Covid downturn. Low-income households and people of color have borne the brunt, as California’s racial wealth divide continues to widen.
“It is a bit frightening that the governor allocated resources for courts to process evictions,” said Sarah Treuhaft, the vice-president of Research at PolicyLink, who worked on the new rental debt report. She questioned how the state will ensure that the federal aid is distributed equitable and efficiently. “There is a stated intention to address systemic racism, and systemic racism clearly operates in the state’s housing market”.
The new data shows that Black, Asian and Latino renters were two to three times more likely to be behind on payments, compared with white renters. The statistics align with other indicators from the Covid crisis, and the economic crunch it caused, in what has been an incredibly inequitable downturn. Roughly 85% of Black workers have filed for unemployment last year compared to 39% of white workers. Nearly all Black workers in the state without a college education have been affected financially: 99% have filed for financial help.
“We know that those groups are disproportionately impacted and this is a pressing equity issue,” Treuhaft said. “Already we have this gaping racial wealth divide – rent debt will just increase that, at a time when we are saying we need to close the gap.”
Courtesy of- AP News & The Guardian News