California imposed a moratorium on evictions after Newsom imposed the nation’s first statewide shutdown in March 2020 and ordered most businesses to close and people to stay at home to slow down the spread of the coronavirus.
This protection is due to expire on Wednesday. The new agreement between Newsom and legislative leaders will extend the moratorium on evictions by three months and commit to paying all unpaid rents and utility bills from eligible tenants from April 2020 to September 30 of this year.
No one knows exactly how many people will qualify and how much it will cost. But the state has $ 5.2 billion to spend on overdue rents, enough to provide $ 10,400 each for half a million tenants, all coming from the federal government.
Newsom’s administration believes the pot of money is more than enough to pay off the rental debts of all eligible people. Another $ 2 billion from the state will cover people’s unpaid utility bills.
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The proposal, which will be voted on in the legislature next week, also gives tenants more time to seek help after a landlord attempts to evict them while masking their credit and rental history so that these debts do not appear and prevent them from obtaining future housing.
California has some of the most expensive rents in the country, due to a statewide shortage of affordable housing. In Los Angeles, the median rent in May was around $ 2,600, and in San Francisco, it was $ 2,700.
About 25% of California renters pay at least half of their income on housing costs, a figure that includes rent and utilities, according to the California Department of Finance.
“Our California housing situation was a crisis before COVID, and the pandemic has only made matters worse – this extension is essential to ensure more people don’t lose the safety net that helps them keep their home, ”said the president of the State Senate Pro. Tempore Toni Atkins, a Democrat from San Diego.
To qualify, people can only earn 80% or less of their region’s median income and must have been affected by the pandemic – an indescribable requirement anyone can meet.
The federal government is giving each state a lot of money to cover rent during the pandemic. Some states, like Washington, have also extended their deportation bans until the end of September. Others, like New Hampshire, also offer rental assistance for up to 15 months.
Californians who are not eligible for coverage for their unpaid rent can still benefit from the eviction ban, but only if they pay at least 25% of what they owe until September 30. If they do, the owners can still sue them for trying to get that money back, but they can’t evict them for it.
This will be the third time California has extended its deportation ban. While some landlords say they are happy that the state is covering all of the rental debt of some tenants, they are angry that the state continues to end evictions.
The ban has caused “irreparable harm” to homeowners who “have been in serious financial difficulty for over 16 months,” said Christine LaMarca, president of the California Rental Housing Association.
“We are very concerned about the date on which this moratorium will actually end,” she said.
California began offering rent assistance earlier this year, using a previous allocation of federal funds. As of Thursday, 54,520 tenants requested $ 616.4 million in assistance, said Russ Heimerich, spokesperson for California Business, Consumer Services and Housing Agency.
But the state has so far paid only $ 61.6 million of those claims.
Those numbers don’t include requests to some of the state’s largest cities – including Los Angeles – that operate their own programs. Yet the state’s slow response frustrated homeowner groups.
“Moratoriums on evictions at both the federal and state levels would not be necessary if state and local governments provided rent assistance funds to tenants and housing providers on an expedited basis,” said Tom Bannon, CEO of the California Apartment Association.
Newsom acknowledged the state’s slow response, adding that the federal government was also slow to get the money to state governments. Newsom said the application process was laborious, but said state officials were trying to make it easier.
“We expect that with this announcement… we’re going to see more people apply and more money requested,” he said. “Our job is to effectively – and insure in the right way, because we don’t want fraud in this space – to get those dollars out as quickly as possible.”
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