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California’s Move To Pay Off Some Tenants’ Full Rent Debt Draws Cautious Optimism

California lawmakers and Gov. Gavin Newsom are in final negotiations to make $5.2B available to help low-income renters pay off 100% of their back rent. Legislators are also discussing extending the state’s eviction protection, which is slated to expire on June 30, The New York Times reported.

The money would boost the existing emergency rental assistance program, which was approved by legislators in January and opened for applications in March. That program covered a majority but not all of the rent owed.

Renters making up to 80% of the median income in their area who could show that they suffered financial hardship because of the coronavirus pandemic would be eligible to have all of their back rent paid off. The funds to repay all rent in arrears for low-income tenants come from emergency federal assistance for renters allotted at the beginning of the year, the NYT reports. Newsom first announced the plan to use the funding to fully repay back rent in early May

California Capitol

The news, while welcomed by both landlords and tenants, is tempered by critiques that the existing program has been slow to connect applicants with the money they qualify for. Of the $619M in requests for rental assistance made via the existing program through Monday morning, only about 8% has been paid, the NYT reported.

“California has got to ramp up distribution of its federal rental assistance dollars,” California Apartment Association CEO Tom Bannon said in a statement to Bisnow

The organization doesn’t oppose a short-term extension of the eviction moratorium, but Bannon said there needed to be more restrictions on tenant protections to ensure that they apply only to the renters who need them.

“Unfortunately, thousands of renters who were given protection are abusing the system,” Bannon wrote. 

A December U.S. Census Bureau survey indicated upward of 1.9 million adult renters in the state reported being behind on their rent, according to the Los Angeles Times.

Jackie Lowery, a renter in the East Bay city of Antioch, is one of them. Lowery shares her home with her husband and five family members. All the adults in the home were laid off during the course of the pandemic, save Lowery, who is retired.

Both Lowery’s landlord and her husband applied for the existing state rental assistance program on behalf of her household in March, when the program opened. The family continued to pay what they could each month to their landlord in the meantime, but Lowery estimates that they owe roughly $10K in back rent. 

To date, Lowery says they have received neither a response nor funds from the program. She and her husband call every day to check on the status of their application, but it remains the same: pending. 

Lowery’s experience trying to secure the first wave of rental assistance makes her skeptical about the proposal to repay 100% of back rent for eligible renters. 

“You want to get excited, but at the same time, you worry about what’s going to happen next,” Lowery said. 

The state’s eviction moratorium, slated to expire on June 30, applies to renters who pay at least 25% of their rent each month. In return, landlords can receive 80% of the back rent accrued between April 2020 and March 2021, but they must agree to forgive the outstanding 20% and not move to evict the tenant. It is unclear to what date the moratorium might be extended. 

A vote on the extension of the eviction protections and the $5.2B rent relief program could come as soon as this week, according to the NYT.