The City of Anaheim is proposing a local rental assistance program for landlords to receive 80 percent of unpaid rent for up to a year if they agree to waive the remaining 20 percent and not pursue evictions.
The rental assistance will provide coverage from April 2020 through March.
The rent subsidy program was created for landlords who “are having a hard time paying their mortgages and their debt obligations,” Anaheim spokesperson Mike Lyster told The Epoch Times on Feb. 15.
Program funds came from a national emergency rental assistance (ERA) program.
California received $2.6 billion in funding last Dec. 27 as part of a $25 billion federal rescue package to help those who’ve suffered setbacks from the COVID-19 pandemic.
Orange County began distributing nearly $66 million in ERA funds on Feb. 1, but some cities—including Anaheim, Santa Ana, and Irvine—were exempt from the program to launch their own initiatives.
Anaheim will discuss its proposed program through its local housing authority during its Feb. 16 council meeting.
If the program is approved, the city will administer $30 million in federal funding locally through the Anaheim Housing Authority.
The city would likely begin accepting applications on March 1, Lyster said.
“We want to help the landlord, and by doing so we in turn help the tenant by paying their back rent from that period,” he said.
If the landlord decides not to participate, rental assistance will be provided directly to the tenant, limited to 25 percent of the total debt owed.
Landlords who opt out of the program can evict their tenants after the moratorium is lifted, however, the eviction moratorium could again be extended.
Starting Aug. 1, landlords can go to small claims court to pursue unpaid rent from April 1, 2020, through March 31.
While renters can be held responsible for their debts, they cannot be evicted for missing payments for that period.
For landlords, litigation can be a gamble, Lyster said.
“If they went to court and won a judgment, they still may not be able to collect the money simply because the tenant doesn’t have the money to pay,” Lyster said.
“As with any debt, collecting it is another issue. A tenant could declare bankruptcy or various other things could happen where they’re just unable to collect the debt. For many landlords, it probably will be in their best interest to go with this 80 percent program.”
Anaheim previously provided $5 million in emergency rental assistance to landlords.
The city’s moratorium on residential and commercial evictions ended last Sept. 30, with state and federal protections still in place.
However, California’s eviction moratorium has been extended through June 30.
Renters need to provide landlords with a declaration of financial distress due to the pandemic, and pay 25 percent of their total rent from September through June 2021.
If renters fail these, they could face eviction starting July 1.
“Unfortunately, there are some cases where folks may be taking advantage of the situation. They may be able to pay part of their rent and just aren’t doing so under the cover of the pandemic,” Lyster said. “That is causing an issue for landlords. So, what the state did was said that at a minimum, you have to pay 25 percent of your rent from last September through June.”
The city of Irvine will be discussing its rollout of the rental assistance funds at its city council meeting on Feb. 23.