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How does the eviction moratorium extension affect landlords?

“Eviction moratorium has caused irreparable harm."
Posted: 4:58 PM, Jun 25, 2021
Updated: 2021-06-25 20:28:26-04
For Rent

SACRAMENTO, Calif. (KERO) — After it was set to expire at the end of the month, the eviction moratorium in California is here to stay until September. In addition, Governor Gavin Newsom announced that the state is investing more than $5 billion to cover unpaid rent for lower-income Californians who have struggled during the pandemic.

California will ban evictions for unpaid rent through the end of September and will use federal money to pay off eligible tenants' debt. Gov. Gavin Newsom and state legislative leaders announced the deal Friday. The agreement extends California's current eviction moratorium that was scheduled to expire Wednesday. To be eligible, tenants must make 80% or less of the area median income. Tenants who are not eligible can still qualify for the eviction ban if they pay at least 25% of what they owe by Sept. 30. Landlord groups say the state needs to move more quickly to distribute money to aid landlords who haven't been getting paid.
Associated Press

And while this sounds like a good thing for renters who have missed payments during the pandemic...

What is the impact on landlords?

Looking at the eviction moratorium

"That would be really a lifeline. In other words, there are funds available to attorneys to pay past-due rents and unpaid rents from tenants."

For millions of renters, a lifeline may be all that's needed. On Thursday, federal officials extended the national eviction moratorium until the end of July. It's helping those hit the hardest by the COVID-19 pandemic who have been unable to afford to pay their rent. According to the U.S. Census Bureau, as of June 7th, about 3.2 million Americans said they faced eviction in the next two months.

"A qualified tenant would be someone who submits a CDC declaration to a landlord, stating that they cannot afford to pay the rent. They're suffering that income loss as a result of COVID-19 and they are making best efforts to find a job, to find employment and they are making best efforts to make their rental payments but they can't," explained eviction attorney Chris Fiori.

According to Fiori, we're at the peak of the funds available which would take the pressure off of the evictions.

"When I compare the numbers from now to last year or the year before, I think we are somewhat on track. The numbers might be a little bit higher but that doesn't mean those individuals are being evicted. It could be that a big percentage of those cases are on hold because of the CDC moratorium."

But when it comes to funding, there's been one underlying issue.

"I'm seeing around me that the issue is not that there isn't enough money out there for everybody, it's that the money is not making it into their hands," added Fiori. "So if you're a tenant out there who haven't paid rent for 8 or 9 months and you're still in the application process, you need a little bit more time to complete the application process to get those funds to your landlord so that you don't have to be evicted and you can get back on track."

In some cases, renters are looking into federal rental assistance but some landlords are refusing to accept it to cover rent. It's a move, as Fiori says, that he would not advise his clients to make.

"You put yourself in a corner as a landlord. If the tenant qualifies for the assistance and you refuse the assistance, then your evictions will likely be put on hold."

It's important to know, as Fiori points out, that once the moratorium goes away eviction policies return to normal.

"Back to normal might mean that the tenant might find themselves in a situation where they have this huge balance of unpaid rent. That doesn't go away. It really behooves everybody to get that rental assistance as there's a lot of money out there. Get that rental assistance so that when the moratorium is lifted, we can start off on a clean slate."

Who is eligible for rent forgiveness?

Who is eligible for rent forgiveness?

The state of California rolled out some guidance to help answer those questions.

First, you have to apply for the COVID-19 rent relief program in order to get money from the state. The application asks questions and looks to ensure that missed rent payments were caused by pandemic-related financial hardships. That means if you started missing payments between April 1st, 2020 to March 31st of this year you can get some of that funding.

Landlords can also apply to this program and are eligible to get up to 80 percent of a tenant's unpaid rent from the state. Landlords must agree to waive the remaining 20 percent of unpaid rent.

The president of the California Rental Housing Association issued a statement Friday about the eviction moratorium, Saying “the eviction moratorium has caused irreparable harm... especially to rental housing providers who have been under severe financial distress for the past 16-plus months. The new budget deal continues that harm by extending the moratorium.”

How will this affect homelessness?

Governor Newsom talks homelessness

In the Bay Area, Governor Newsom spoke about the state's prevalent homeless crisis. He made an announcement about rent forgiveness which would keep millions of renters in their homes but also about building shelter for the homeless.

"We have to do things radically differently and that's what this project represents. Symbolically and substantively. These units, these over 6,000 seminal units, that were brought online in less than 6 months in California over the last year."

Newsom was in Santa Clara county and praised the area for its dedication to building tiny homes for the homeless. He also spent some time talking about strides made which were as part of Project Homekey.

Project Homekey is a program that allows government agencies to work with the community to purchase buildings to house the homeless.