Home>Articles>Gov. Newsom’s Plan to Use Federal Funds to Cover Unpaid Rent for Low-Income Tenants

Gov. Newsom’s Plan to Use Federal Funds to Cover Unpaid Rent for Low-Income Tenants

‘California is planning rent forgiveness on a scale never seen before in the United States’

By Katy Grimes, June 22, 2021 1:42 pm

In January of this year, at the behest of California Gov. Gavin Newsom, the California legislature passed a second eviction protection plan extending the eviction moratorium until June.

The Globe reported:

The new legislation carries over much of the current eviction moratorium but with a few key differences in favor of landlords. Starting February 1st, tenants can qualify for protections as long as they pay 25% of the rent each month or pay it in a lump sum payment by June 30th. Like before, tenants can only qualify for this as long as they sign paperwork attesting that they are facing financial hardships due to the COVID-19 pandemic. If not paid, landlords can sue to get the money back in court but cannot sue for eviction.

Flash forward to June 21, 2021 and the looming deadline, when Gov. Gavin Newsom announced Monday, “California is planning rent forgiveness on a scale never seen before in the United States.”

The state Legislature is planning to further extend the moratorium on evictions beyond the June 30th expiration.

The New York Times reported Monday:

A $5.2 billion program in final negotiations at the State Legislature would pay 100 percent of unpaid rent that lower-income Californians incurred during the pandemic and would be financed entirely by federal money. The state is also proposing to set aside $2 billion to pay for unpaid water and electricity bills.

When California became the first state to shut down its economy last year, Gov. Gavin Newsom predicted dire shortfalls in the state’s budget. But a year later, the state finds itself with so much money that it is poised to not only cover 100 percent of unpaid rent for low-income tenants, but also to give an additional $12 billion back to taxpayers, by sending state stimulus checks of at least $600 to millions of middle-class Californians.

The state’s separate rental relief program would be available to residents who earn no more than 80 percent of the median income in their area and who can show pandemic-related financial hardship. In San Francisco, a family of four would have to earn less than $146,350 to qualify.

For each tenant currently under COVID-19 eviction protection, landlords were able choose to either receive 80% of the unpaid rent from the state as long as they agree to forgive the other 20% and pledge not to evict the tenant for actions made until June 30th, or they could opt for 25% from the state to protect all tenants from being evicted but then can pursue eviction after June 30th, the Globe reported.

After the governor’s announcement, reactions were mixed. One reply on the governor’s Twitter feed said, “You know a better solution would have been to let those people work. Just saying.”

Another said, “In other words, CA Gov. Gavin Newsom plans to buy recall votes using taxpayers’ dollars. Didn’t Newsom’s rent/eviction moratorium decree effectively violate the 5th Amendment in the U.S. Constitution?”

Replying to @GavinNewsom, another said, “Sadly, you forgot that many property owners paid their property taxes who will never get a reprieve from the state government. You are purposely creating class warfare!”

And another took a different tact: “We need landlord rent reform. Allowing landlords to charge whatever they want and sending people to the poor house is not acceptable.”

While California has a $75.7 billion budget surplus, the state also has more than $300 billion in debt, and  unfunded pension and retiree health care debt estimated at over $1 trillion. The federal funding infusions help, but as Joel Pollak at Breitbart notes, “Still, Governor Gavin Newsom, facing a recall election, has promised more stimulus checks of $600 for two-thirds of Californians, and the state legislature is about to provide even more money.”

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9 thoughts on “Gov. Newsom’s Plan to Use Federal Funds to Cover Unpaid Rent for Low-Income Tenants

  1. Gavin Gruesome’s bribery ultimately takes rental units off the market, because no property owner in his right mind is going to —- nor will he be able to —- continue to provide free housing forever. And for the privilege of also shelling out to maintain the property under orders of the “benevolent” Governor and the State! Landlords aren’t your mommy putting up with the likes of you living rent-free in the basement until you’re 50 years old.
    I guess Gavin’s ultimate goal — aside from buying votes — is all-govt housing for an even more-dependent populace, but as it stands now, if you are a renter and/or you support renters, you should absolutely NOT support what Newsom is doing here, as much as ‘free’ feels good now. But the state is going to pot in so many others ways, too. Thus it’s likely landlords are bailing on California like crazy even as we speak.

  2. I guess for all those that did the honorable thing and sacrificed groceries, gas and medications in order to pay rent, you have been left behind. To the landlords that are in arrears or took out more loans because the rent was not coming in, you are the sucker holding the bag!

    Californians have SUCKER stamped on our foreheads.

    Now let’s get to work and recall this charlatan called Governor Newsom!
    http://www.recallgavin2020.com

    1. Yep, we paid 100% of our rent on time every time. In fact for the past 10 years in the same apartment with never a 30 day late. Last month we received a rent increase and NO lease renewal. Cannon Management refuses to allow us a new lease and put us on a month to month or “move out”. We would but can’t afford the rent gouging here in So Cal. So those who did not pay rent get a bail out, the landlords get a bail out and those of us who paid in full and on time with never get PUT out.

      1. Amazing. I can’t even process this I am so angry over it right now. You be responsible and pay your rent and Newsom rewards those who dont. We all struggled and sacrificed this past year, some were just more responsible than others. Recall this creep!

  3. Deplorables
    It’s over…..there is a chunky chicken in every pot…..you’re getting the brass ring…..all ends well cause they say so….doesn’t Utopia feel good?

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