Housing security is the basis of a healthy economy and stable housing market. Here in California, reliable access to housing has long been an issue as rental and homeowner inventory have failed to keep up with demand from our rising population.

As the response to the global pandemic has shuttered most facets of the state’s economy, millions have been left without incomes, unable to pay their housing expenses. Over 5 million Californians have filed for unemployment since coronavirus (COVID-19) layoffs began in March 2020. This translates to an unprecedented 26% of today’s workforce.

Hardest hit are African American and Latinx households, who make up a large share of the industries shutdown during the pandemic, including the restaurant and hospitality industries. These households already experience the highest housing cost burdens, meaning they spend a larger share of their income on rent compared to households of other races.

For example, in San Francisco, Latinx renter households spend an average of 31% of their income on rent, compared to 24% for White renter households, according to Zillow. Also according to the Zillow analysis, Latinx have experienced the most significant share of layoffs and lost incomes due to the pandemic, important for California where 39% of the population is Latinx.

An uncertain future for eviction protections

Depending on where they live in the state, California renters may not be evicted due to an inability to pay rent due to COVID-19 through July 28, 2020. This rule is an extension of an earlier rule that prohibited evictions through the end of May. However, California’s courts won’t be taking eviction cases for the foreseeable future, until 90 days after the expiration of the state’s emergency declaration.

Still, what then? Will months of missed rents become due all at once, and how will tenants who have been unemployed be able to pay these huge sums when they are due? Will this lead to exactly what lawmakers are trying to avoid — a mass eviction crisis?

Assembly Bill (AB) 1436 seeks to allow tenants up to 15 months after the expiration of the state of emergency to repay missed rent payments accrued during the emergency. It also prohibits landlords from harassing or intimidating tenants unable to pay rent during this time.

If it passes, the new law will undoubtedly help to keep renters housed during this singular time and in the ensuing recovery. But it will be yet another band-aid for the gaping wound that is California’s housing shortage.

This shortage extends across all types of housing, including rentals of all types and low- and mid-tier for-sale inventory. In 2020, the for-sale inventory has declined precipitously due to COVID-19. As of March, inventory is down 23% from a year earlier statewide.

Further, the rental vacancy rate averaged 3.4% in the first quarter (Q1) of 2020, down from 4.2% a year earlier, according to the U.S Census. For reference, a healthy rental market sees vacancies hover around 5%. As renters continue to hunker down in 2020, expect to see this vacancy rate fall even further once reports for Q2 become available.

Together, reduced inventory and low vacancy rates will lead to decreased turnover in both rentals and home sales, a big problem for real estate agents who rely on transaction fees to make a living.

While legal assistance to keep renters and homeowners housed is necessary today, when these protections are over, the underlying problem will remain: insufficient housing.

Several new laws have been passed since 2018 aimed at increasing the housing stock, especially of low- and mid-tier homes. But more help is needed at the grassroots level. The loud voice of not-in-my-backyard (NIMBY) advocates who seek to keep neighborhoods unchanged needs to be countered by reasonable calls for increased construction and density. As real estate professionals, you are ideally placed to both see the problem in your day-to-day experience and voice the solution.