Statewide Eviction Moratorium Imminent; City of San Diego Update
First and foremost, SCRHA would like to thank all the members who called, wrote, emailed, and offered public testimony in response to today’s San Diego City Council vote on an Eviction Moratorium. We knew this action was going to be virtually impossible to stop but it doesn’t mean it was all for naught. Many councilmembers spoke of their concerns for property owners and even directly referenced emails they received from SCRHA members. It did pass, but a new proposal from the State Legislature has changed many of the dynamics. Read on for further explanation...
City of San Diego Eviction Moratorium
On January 26 the City Council, at the Mayor’s request, passed both a Residential and Commercial Property Eviction Moratorium. However, the residential moratorium was altered late yesterday to account for the pending state law. As passed, it will go into effect February 1 if the state takes no action. However, if the state bill passes, the local moratorium will not apply for now. SCRHA is disappointed that the council rejected an end date. This means that not only will the ordinance immediately go into effect come July 1 with no review of the environment at that time, but it will also be in place until 60 days AFTER the end of the local emergency declaration…whenever that is. The measure passed 8-1, with Councilmember Chris Cate the lone “no” vote. SCRHA sought to alter some other provisions of the ordinance, such as the notification timelines, but was ultimately only successful in having covered time periods already covered by AB 3088 removed.
We remain hopeful that the $42 million rental assistance allocation to the City will be deployed quickly and that there is a vehicle for housing providers to apply on behalf of a resident.
State Eviction Moratorium Extension & Rental Relief
Yesterday morning state leaders announced Senate Bill 91, a bill to extend AB 3088, the statewide moratorium, and create a funding mechanism to pay property owners some past due rent. There are many components to the legislation, and it is by no means perfect or even how the industry would craft such important legislation. That said, SCRHA and our lobbyist in Sacramento (Aaron Read & Associates), as well as our partners in the California Rental Housing Association (CalRHA) and industry allies, are moving quickly to analyze the bill and improve it prior to the expected vote this Thursday. It will be tough to get any major changes since Senate and Assembly leadership has already negotiated many of terms, and as we understand, the Governor is on board. However, we will work to make any improvements we can in the next few days.
The following are some of the main provisions of the extension through June 30, 2021. (Please note: SCRHA prefers the terms “Residents” and “Housing Providers” but we are using the terms in the bill for the summary):
- Tenants who pay 25 percent of monthly rent receive eviction protections. The 25 percent can take the form of a 25 percent of monthly rent paid each month; or a lump sum payment by June 30, 2021 that brings the total paid to 25 percent of what is due over the period covered.
- Prevents late fees on COVID-19 rental debt.
- Preemptions on local jurisdictions are extended. The preemptions prevent locals from changing local eviction rules beyond what was in place on August 19, 2020.
- The bill caps the maximum recoverable attorney fees on an action to recover COVID-19 rental debt.
- The bill provides that in any action seeking recovery of COVID-19 rental debt, the court may reduce the damages awarded if the court determines that the landlord refused to obtain rental assistance from the State Rental Assistance Program created in this bill, where the tenant met the eligibility requirements and funding was available.
- Prohibits a housing provider, tenant screening company, or other entity that evaluates tenants on behalf of a housing provider from using an alleged COVID-19 rental debt as a negative factor for the purpose of evaluating a prospective housing application or as the basis for refusing to rent a dwelling unit to an otherwise qualified prospective tenant.
- Prevents landlords from applying current tenant payments retroactively to back rent or other charges.
- Prevents a landlord from selling or assigning unpaid COVID-19 rental debt, for the time period between March 1, 2020, and June 30, 2021.
- Creates a Rental Assistance Program aimed at reducing COVID-19 rental debt based on federal rules. The rental assistance program is available to eligible tenants whose household income is no more than 80 percent of area median income (AMI) for the 2020 calendar year.
- Priority is given to tenants whose household incomes are no more than 50 percent of AMI.
- Pays landlords 80 percent of total amount of rent in arrears incurred between April 2020 and March 2021. Landlords must agree to forgive the remaining 20 percent and not pursue evictions or go after remaining debt.
- This is not 80 percent of total rent for the period, but 80 percent of the amount in arrears (if the tenant has paid some rent, then its 80% of whatever is remaining due).
- Pays 25 percent of rent arrears, if the tenant applies for assistance, but the landlord does not participate, to help the tenant pay off the rental arrears that they accumulated from September 2020 - March 2021. This will help prevent the tenant from being evicted for rental arrears during that period.
- Pays 25 percent of up to three months of prospective payments on behalf of tenants. Assistance is paid to landlord directly. This would be for months after March 2021 and reflects the federal program’s 15-month cap.
- Requires landlords to notify tenants who owe back rent of the availability of the rental assistance program.
- Prohibits landlords from proceeding with an eviction if they have not first notified the tenant about the rental assistance program.
- Click here to read more details.
Many of the procedures will be like those in AB 3088, including 15-Day Notices to Pay or Quit, mandatory notifications of the law, and the ability for residents to return a hardship declaration. SCRHA will need to update some of the relevant forms and has already begun to prepare for the forthcoming changes.
Thank you again for your support and remaining steadfast during this challenging time. We know that the rental housing industry is being asked to shoulder the burden of this pandemic unlike any other industry. SCRHA will continue to advocate on your behalf and seek more balanced solutions to COVID-19 rental impacts. Hang in there!