California to Give 100% Rent Relief Using Budget Surplus

Gov. Gavin Newsom announced this week that the state will double its pandemic rent relief budget to $5.2 billion, using part of the unexpected $38 billion surplus. Details of who will be eligible have not yet been released.

(TNS) — Thousands of California Bay Area renters who have fallen behind on payments during the pandemic could soon see that debt reduced, thanks to $2.6 billion in new rent relief funding announced Monday by Gov. Gavin Newsom.

But that's only if they and their landlords can navigate a confusing patchwork of state and local programs that advocates say are already leading to people falling through the cracks.

With rent relief once again wrapped up in the state's contentious annual budget process, they expect more clashes over income limits for debt forgiveness, whether to pay the money to landlords or tenants, and how to address closely related issues like eviction protections and forgiveness for other kinds of pandemic-induced debt.

"The details will really matter," said Jennifer Martinez, chief strategy officer for social justice advocacy group PICO California. "Frankly, there's just not enough time to get the money out into peoples' hands who really need it unless we extend the eviction moratorium."

On Monday, with less than two months to go until the state's current eviction moratorium expires on June 30, Newsom said California will double its pandemic rent relief budget, to $5.2 billion, after a $2.6 billion funding infusion from the federal government. He said the state aims to pay off back rent since April 2020 in full and "provide 100 percent support" to renters who are still struggling during a press conference detailing an unexpected $38 billion state budget surplus.

But how exactly that all might work — and who could be eligible for 100 percent rent relief — will likely depend on another tense round of negotiations in Sacramento and at city halls around the Bay Area. Both tenant and landlord advocacy groups voiced support for the additional funding on Monday, though those representing the latter were more enthusiastic.

"This is certainly welcome news," said Tom Bannon, CEO of the California Apartment Association, in a statement. "Many of our members have provided housing for more than a year without compensation."

As it stands, some 112,000 renters in the nine-county Bay Area owe a total of nearly $623 million in back rent, according to an analysis of Census survey data by the National Equity Atlas maintained by the University of Southern California and the research firm PolicyLink.

California first imposed a statewide eviction moratorium last spring, after surging unemployment and strict pandemic lockdowns upended the finances of millions of residents. In January, state lawmakers extended the moratorium into this summer and created a new Emergency Rental Assistance Program.

Under the current state program, landlords may apply on behalf of tenants impacted by the pandemic who make up to 80 percent of their county's median income, which in many corners of the Bay Area can pencil out to $75,000 or more. If accepted, the state pays off 80 percent of the tenant's debt. Renters whose landlords opt not to participate can apply on their own for 25 percent rent forgiveness, though they still owe the rest.

Several Bay Area cities, including San Francisco, Oakland and Fremont, have also opted to run their own rent relief programs during the pandemic that prioritize renters with lower incomes. Across California, roughly three-quarters of the 880,000 households that owe back rent are non-white or earn less than $50,000 per year, according to the National Equity Atlas.

Now, one big question is whether lawmakers will seize the moment with new rent relief funding to make broader changes to the assistance program. Assemblymember David Chiu, a Democrat from San Francisco urged his colleagues to do more.

"Covering 100 percent of back rent would be a game changer for so many families in our state," Chiu said in a statement. He also called for extending the state's eviction moratorium and ensuring that all tenants "receive the same level of rent relief."

Martinez of PICO California says another crucial change would be allowing tenants themselves to apply for full rent relief. She was also encouraged by Newsom's announcement Monday that he would seek an additional $2 billion to forgive outstanding utility bills.

Longer term, she hopes more certainty will allow renters to forge a path out of the pandemic after a year of job loss, mounting debt and plummeting credit scores.

"This piecemeal approach," Martinez said, "is wreaking havoc on families."

(c)2021 the San Francisco Chronicle. Distributed by Tribune Content Agency, LLC.
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