California renters have thus far borne the brunt of the 2020 recession, exacerbated by the coronavirus (COVID-19) pandemic. By June, over 90% of tenants were able to keep up with rental payments, but those who found themselves out of work in March and April were forced to rely on government stimulus checks or dip into their savings to afford rent.
However, when we asked our readers in a recent poll, 57% of respondents felt eviction protection orders were enough to keep renters in place for the foreseeable future.
What is the reality of those eviction protections in California, and will they be enough to protect renters in the event of continued job losses?
An adequate response?
The passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act at the end of March put in place a federal moratorium on eviction notices lasting until July 25th.
Additional eviction protections in California were recently extended through the end of September, providing an extra level of relief for tenants.
However, these protections come with a couple important caveats.
First, these measures do not relieve tenants of their obligation to pay rent — they merely shift the obligation to a future date. Tenants protected under eviction stays are still liable for back rent to be paid once the moratorium is lifted. Due dates vary by locality, from up to a year after expiration of the moratorium in Los Angeles County to 90 days in Marin County.
While most tenants were able to afford their June rent, plenty remain unemployed due to the COVID-19 pandemic. But with a second spike in cases emerging across the state, and the effects of the recession still in full swing, ever-tenuous employment prospects mean unpaid rent due hangs over the heads of tenants who may not be able to afford it.
Second, eviction protections remain inconsistent across the state of California. The executive order recently signed by Gavin Newsom is not so much an extension on a statewide eviction moratorium as it is an allowance for local governments to halt evictions if they so choose.
Eviction protections vary wildly by county, and most counties have not yet extended these protections in response to the recent surge in COVID-19 cases. Consequently, there is no guarantee tenants who can’t afford their rent now will be in good shape when the eviction moratorium ends.
Related article:
How legislation is helping brokerages, homeowners and renters during COVID-19
Non-zero-sum
Moratoriums alone are a short-term, surface-level solution. While they’re lifesaving for low-income renters, and don’t make a huge impact on corporate landlords who benefit from tax breaks introduced in the CARES Act, landlords with smaller operations who depend on rental income to keep themselves afloat are feeling the hurt.
The solution? Expanding rental assistance with legislation like that found in the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which has yet to be passed by the U.S. Senate. The HEROES Act includes $100 billion in emergency rental assistance, and extends the eviction moratorium established by the CARES Act.
Removing the burden of rental payments from tenants is a win-win — not only do landlords get the income they need, thereby allowing them to keep up with operating expenses, but tenants struggling to make rent due to COVID-19-related circumstances no longer need to worry about the possibility of immediate eviction once these moratoriums expire.
