California set to extend state eviction moratorium beyond June and cover 100% unpaid rent for struggling tenants

Lawmakers in Sacramento are poised to extend statewide eviction protections beyond the end of June to ensure emergency rental aid reaches struggling tenants in time to cover potentially all of their unpaid rent during the pandemic, a move strongly backed by local renter advocates and met with resistance by many landlords.

The underlying issue is that state and county governments have been slow to distribute the $2.6 billion in federal funds to cover back rent. In Sonoma County, officials have so far disbursed less than 10% of the $32 million set aside for its rental aid program.

Renter advocates fear that if a statewide moratorium on most evictions is not extended, many tenants won’t receive assistance in time to stay in their homes and avoid crushing debt.

A county moratorium would continue to shield the majority of renters from immediate eviction, but tenants could still be on the hook for overdue rent and possibly at risk of displacement down the line if they don’t get assistance by the fast-approaching June 30 deadline.

Representatives for several legislators told The Press Democrat on Monday the state will likely extend the protections, possibly until the end of September or through the rest of the year.

The decision, which could come as early as this week, would be tied to negotiations over the state’s roughly $267 billion proposed budget, which must be approved by the end of the month. As part of the new spending, Gov. Gavin Newsom has proposed an additional $2.6 billion from the federal government to cover 100% of rent debt for low-income tenants who’ve taken a financial hit due to the pandemic.

“California tenants and landlords are in need of immediate relief and flexibility to prevent an avalanche of evictions on July 1,” Assemblyman Marc Levine, D-San Rafael, said in a statement. “I support an extension of the eviction moratorium into late 2021 that allows tenants impacted by COVID-19 to remain in their homes along with allowing landlords to recover 100% of unpaid rent from the state due to COVID-19.”

Currently, landlords who agree to take part in rental aid programs are compensated for just 80% of tenants’ overdue rent from between April 1, 2020, and March 31, 2021, and must forgive the remaining 20%. If property owners refuse, tenants can apply to receive 25% of their unpaid rent for that same period.

When the state eviction moratorium expires at the end of this month, tenants must pay at least 25% of their overdue rent since Sept. 1, 2020, to stay permanently protected from eviction for past missing payments dating back to start of the pandemic.

The county moratorium, meanwhile, doesn’t guarantee any eviction protections for back rent once it expires. It will end 60 days after local officials declare the ongoing COVID-19 health emergency over.

Advocates worry that if local renters don’t receive aid by June 30, landlords could take them to small claims court to recoup outstanding rent starting in August, leaving them vulnerable to eviction in the future. They’ve also raised concerns that property owners must agree to participate in aid programs for renters to receive full available relief. Additionally, those who took out loans to avoid falling behind on rent are not eligible for assistance.

Last week, state Sen. Mike McGuire, D-Healdsburg, said discussions about rental aid restrictions and requirements were “active and ongoing” as part of budget discussions, but declined to provide more details.

“The state wants to make this program as effective and efficient as possible for the most vulnerable Californians as well as small mom-and-pop landlords,” McGuire said, adding he supports pushing back the moratorium. “And that is why there’s active conversations happening right now.”

State Sen. Bill Dodd, D-Napa, told The Press Democrat earlier this month he doesn’t back extending the moratorium and that the Newsom administration should instead be focused on making it easier for renters and property owners to access the aid already available.

Keith Becker, general manager of DeDe’s Rentals in Santa Rosa, said 14 of his tenants together owe more than $100,000 in back rent. So far, only three have received assistance.

Becker said that any extension of existing evictions protections should be narrow in scope.

“All of this was instituted as a necessary reaction to a public health emergency,” he said. “It should not be revised under these circumstances to be something other than a limited function for a limited crisis.”

The California Apartment Association is urging its members to “reject a lengthy extension” of the state moratorium as the economy improves. It’s also calling on lawmakers to ensure any new rental aid rules don’t embolden “unscrupulous tenants to withhold rent even when they can afford to pay.”

Suzanne Dershowitz, housing policy attorney with Legal Aid of Sonoma County, is pushing for state eviction protections to remain in place through the end of 2021. She said it’s critical the state act now to prevent a possible wave of local evictions later this year.

Across the county, some 10,240 households owe about $51 million in rent debt, according to National Equity Atlas, a research group backed by the University of Southern California.

“It’s pretty incredible that the deadline is next Wednesday and we don’t have more information from the Legislature,” Dershowitz said.

You can reach Staff Writer Ethan Varian at ethan.varian@pressdemocrat.com or 707-521-5412. On Twitter @ethanvarian.