Eviction Moratorium thru Sept. 30: RENTAL PROPERTIES & COVID-19

Many analysts are projecting a massive surge of COVID-19-related evictions when eviction moratoriums around the state and nation expire. While many California counties have been working to reopen their economies, the number of COVID-19 cases is increasing and an increase in the number of homeless people on our streets would exacerbate this public health crisis. 

In early June, Governor Newsom extended through July 28 his March executive order that allows local governments the leeway to issue COVID-19 eviction moratoriums. The California State Judicial Council has also refused to rescind its temporary statewide ban on all evictions. However, the ban only prevents landlords from serving a summons on a tenant who has not paid rent; once that ban is lifted, tenants in much of the state could potentially be evicted quite rapidly. 

The Marin County Board of Supervisors has extended its countywide eviction moratorium several times since the shelter-in-place order was issued in March 2020. On July 28, the BOS voted unanimously to extend the moratorium through the end of September. Fortunately for Marin renters, the BOS has also enacted a rental payback period of 90 days after the expiration of the eviction moratorium. Other California counties have enacted similar grace periods, ranging from sixty days to one year. 

More permenent protections sought

The Judicial Council has urged the state legislature to enact more permanent protections. Assembly member David Chiu has introduced AB 1436, which would ban evictions, not just summonses, for nonpayment of rent during the pandemic, giving tenants a period of months to repay their rental debt while allowing landlords to pursue civil claims to recoup back rent. However, nonpayment of rent that accrues after the state of emergency is lifted could result in eviction.  The bill is co-sponsored by California Rural Legal Assistance Foundation, Housing Now!, Leadership Counsel for Justice and Accountability, PolicyLink, Public Advocates Inc., Public Counsel, and the Western Center on Law and Poverty. As of late July, the bill will probably be amended to provide for one-year mortgage forbearance for smaller properties of up to four units, and 6-month forbearance for larger properties. AB 1436 is expected to be heard in the Senate Judiciary Committee on August 12.

Another bill, SB 1410 (Caballero and Bradford) bill creates the opportunity for a voluntary tenant-owner COVID-19 eviction relief agreement. It restricts rental property owners from evicting tenants for unpaid rent accrued during the state of emergency, and allows a tax credit to owners that defer rent for tenants in connection with the COVID-19 pandemic. This bill is sponsored by the California Apartment Association in an attempt to find a solution that would benefit both renters and property owners. 

Landlords need protection too

While the Federal government has allowed deferral of mortgage payments on multi-family housing financed with federally-backed loans in exchange for landlords not evicting tenants, this relief program covered only about half of multi-family housing in the US, and tenants often don’t know who their landlord’s lenders are and hence may not have known they were protected. Some private banks have also been willing to defer mortgages.

However, there is too little assistance available to small landlords who do not have a large financial cushion to weather long periods with reduced rental income. A recent survey of small landlords conducted by UC Berkeley’s Terner Center, for instance, found that 80% of landlords with fewer than 20 units experienced a decline in rental income compared to the first quarter of the year. Only 61% of respondents expressed confidence in being able to cover their operating costs over the next quarter.  

As the Senate debates the new federal relief bill, the eviction moratorium has lapsed putting millions of tenants at risk. Nearly a third of US renters report that they may not be able to pay next month’s rent, leading some analysts to warn of a coming eviction apocalypse. The GOP’s proposed HEALS package provides nothing by way of renter protections, and also cuts the expanded unemployment benefits that many depend upon to pay their rent. Democrats are likely to push back against these changes. 

More needs to be done to assist both landlords and tenants. MEHC will continue to work with. the Marin Organizing Committee to convene conversations between tenants and rental property owners about a path forward.