California Plans Rent Forgiveness Using Federal Stimulus Surplus

Worried that the pandemic would exacerbate what is already the state’s most pressing issue, California responded aggressively, passing on...


Worried that the pandemic would exacerbate what is already the state’s most pressing issue, California responded aggressively, passing one of the nation’s strictest eviction moratoriums and moving some 35,000 homeless Californians into hotels, a model that has proliferated nationwide. The governor has proposed spending $12 billion on homelessness, including $7 billion to buy motels and apartments to convert them into shelters and $1.75 billion to build affordable housing.

While government efforts have been key to keeping tenants housed during the pandemic, rental programs in California and elsewhere have been plagued with problems and slow to get the money out. Studies show that about a third of tenants have at some point used federal stimulus or unemployment money to pay their rent since last year, but a much smaller number, as low as 2 percent, have been able to access a rental program. Consequently, a majority of renters still had to borrow or draw on savings to cover bills during the pandemic, leaving them less able to weather future emergencies as the economy recovers.

On Monday, state lawmakers were working on a bill to extend the eviction moratorium past its June 30 expiration date, according to several officials in the Legislature who requested anonymity to discuss ongoing negotiations. A vote could come as early as this week. Lawmakers are expected to extend the eviction moratorium that was set to expire June 30, and cover 100 percent of the rent for lower-income tenants, up from 80 percent of their rent bill through current programs, the officials said.

“California has over $5 billion in federal funds to help pay the rent of low-income people,” said Jason Elliott, a senior counselor to Mr. Newsom. “Our challenge is to distribute this as quickly as possible while guarding against fraud and making sure we prioritize those who are struggling the most.”

Tom Bannon, the head of the California Apartment Association, a group that represents landlords in the state, said he was open to a short-term extension of an eviction moratorium but called for speedier disbursement.

“California has got to ramp up distribution of its federal rental assistance dollars,” he said.

At the beginning of the year, the U.S. government allocated $23.7 billion in emergency rental assistance to all 50 states, and Washington, D.C., based on their share of the country’s population. California received the largest chunk — $2.6 billion — which the state has decided to funnel into covering low-income tenants’ back rent.

By comparison, Texas, with the second largest share of the population, received $1.9 billion.

If California does extend eviction protections past June, it would be joining just a handful of other states to have done so. Hawaii’s and New York’s moratoriums will end in August, while New Jersey, Vermont and Washington, D.C., plan to end theirs sometime after each jurisdiction has lifted their state of emergency status, according to the Eviction Lab at Princeton University.

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Newsrust - US Top News: California Plans Rent Forgiveness Using Federal Stimulus Surplus
California Plans Rent Forgiveness Using Federal Stimulus Surplus
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