On Tuesday, a bill that would halt evictions until sometime next year and give renters additional protections during the rest of the COVID-19 panic passed the Senate Judiciary Committee 6-0.
AB 1436 and the rent moratorium
Assembly Bill 1436, authored by Assemblyman David Chiu (D-San Francisco), would specifically enact the COVID-19 Tenant Relief Act of 2020. The Act would halt evictions of any tenants who attest that they are facing COVID-19 related financial stress until either 90 days after the state of emergency has ended or until April 1, 2021. Landlords will not be able to pay off any missed rent with the renters security deposit. They would also be unable to charge tenants late fees under COVID-19 stress or end a tenancy. Landlords would also be unable to legally collect any missed rent by affected tenants until either 15 months after the state of emergency, or until April 1, 2022.
AB 1436 also has similar rules in place for lenders and homeowners with mortgages. COVID-19 stressed borrowers can ask for a forbearance of payments lasting until until either 90 days after the state of emergency has ended or until April 1, 2021. When forbearance payments do come up post COVID-19, the lender must give a 30-day notice on when payments would begin.
Assemblyman Chiu had only introduced the refurbished, eviction-centric version of AB 1436 in early June. He wrote the bill largely to avoid mass evictions later in the year due to many people either being out of work or being unable to work due to COVID-19. He also cited high rent costs and an already high homeless population within the state, with California and local governments facing a giant burden if evictions were allowed to proceed. AB 1436 is also a replacement for AB 2501, another renter and homeowner bill which failed in the Assembly in mid-June.
Financial stress for renters, financial ruin for landlords
“California simply cannot afford a wave of mass evictions,” Assemblyman Chiu said in June. “Doing nothing means millions could potentially be forced into homelessness. We are stepping in to keep tenants in their homes while allowing landlords to collect past due rent in a reasonable way.”
In the last week he has also pressed the direness of the situation, adding “If we don’t change state law in the next two weeks, we will see a massive wave of evictions. This will be catastrophic for tenants, landlords, homeowners and COVID-19 spread.”
Property owners, landlords, and many rental groups have opposed the bill, noting that they’re facing financial ruin and stress in turn because they have to allow tenants to stay rent-free.
Dina Myers, who has rental properties in Oakland and San Leandro, told the Globe just how bad it currently is for landlords.
“I don’t know how much longer a lot of us will survive,” said Myers. “We legally can’t force rent right now, but we can’t rent out the place to someone new because we can’t evict them. I’ve been losing money steadily since March, and I know others who have rented apartments in the area going under because of it. A retired couple I know, who had bought an apartment building as a retirement source of income, have actually had to apply Social Security income to pay the apartment off monthly because so many of their renters aren’t paying right now.”
“I myself have several tenants unable to pay, but I was lucky to come to agreements with many to pay something. But still, it isn’t enough and I’ve dipped into savings.”
“Everyone is talking about renter relief, but where is ours?”
Less than two weeks before the end of session, a possible compromise
The decision by the Judicial Council of California last week to restart evictions on September 2nd had been worked out with legislators in the hopes of finding and passing an eviction compromise bill. While AB 1436 is close, a bill created in the Senate that stresses many similar points, SB 1410, has also been moving up through committees. SB 1410 has even been shown to be more popular with landlords due to the tax crediting system for unpaid rent offered to landlords in the bill.
However, a compromise between the bills needs to be reached by the end of the session on the 31st.
‘Right now it’s a race against time for a compromise deal,” said State Capitol employee “Dana” to the Globe last week. “They are most likely going to do it because I know some people who have been working on some of these proposals for months. But now they have to decide on payment forgiveness or tax forgiveness.”
Governor Gavin Newsom also stressed compromise, noting that “We’ve been able to establish the areas of agreement. Now we’re starting to focus on those areas of disagreement.”
AB 1436 is expected to have a floor vote in the Senate in the coming week, as well as a final vote by the Assembly shortly afterwards. Governor Newsom has indicated that he would sign any of the current proposed rent moratorium legislation.