The extended moratorium, Assembly Bill 3088, runs through Jan. 31, 2021. It was signed into law by Newsom two hours before a midnight deadline, and will “protect millions of tenants from eviction and property owners from foreclosure due to the economic impacts of COVID-19,” according to an Aug. 31 press release.
Beginning Sept. 1, tenants must pay 25 percent of their rent to avoid eviction. They are still responsible for the remaining 75 percent, which becomes a legal debt, but do not have to begin paying the balance until March 1, 2021.
The unpaid amounts cannot be the basis for an eviction, but landlords can begin recovering the debt in an expanded small claims court when the moratorium expires. The bill protects landlords by extending certain anti-foreclosure protections.
The newly passed legislation also guarantees that no tenant can be evicted until Feb. 1, 2021, for not paying rent from March 4 through Aug. 31 if they are able to provide a “declaration of hardship” due to the pandemic. The unpaid rent becomes a consumer debt to the landlord, according to the new law.
“COVID-19 has impacted everyone in California—but some bear much more of the burden than others, especially tenants struggling to stitch together the monthly rent, and they deserve protection from eviction,” said Newsom.
“This new law protects tenants from eviction for non-payment of rent and helps keep homeowners out of foreclosure as a result of economic hardship caused by this terrible pandemic.”
Some critics of the bill applauded the extension, but decried the relatively short length. A previous bill, Assembly Bill 1436, would have extended the eviction moratorium through April 21 before lawmakers reached a compromise on the newer iteration.
David Levy, a program specialist for The Fair Housing Council of Orange County, told The Epoch Times that the bill could prove to be problematic for tenants down the road.
“While it does offer substantial relief to tenants who cannot pay due to pandemic-related financial distress, it sets up a ‘cliff’ for those that may still be struggling when it comes to paying full rent for February,” Levy said via email.
“It leaves open the possibility that those tenants could be hit with an immediate 3-Day Notice to Pay Rent or Quit that could lead to an eviction action commencing as early as February 8th.”
The Fair Housing Council advises tenants to pay as much rent as they can afford each month, while still allowing for their other essential expenses, so they do not find themselves unable to meet minimum standards.
“They may eventually face a legal action to recover back rent even if it is not one for eviction, so they should not dig themselves into a hole from which they cannot climb out,” Levy said.
Dean Preston, founder of the advocacy group Tenants Together, said via Twitter on Aug. 28 that the temporary relief leaves “tenants vulnerable to mass eviction in Feb. 2021.” The proposal offers “limited relief” and “contains many problematic compromises to appease the landlord lobby,” he said.
“Unfortunately, this proposal seems to be as much about protecting real estate profits as it is about saving people from eviction in the midst of a pandemic,” Preston stated.
The California Apartment Association (CAA), an organization supporting apartment owners and managers, applauded the bill in an Aug. 28 statement.
The group’s CEO, Tom Bannon, said, “We applaud the Legislature and governor for advancing legislation with protections for tenants truly harmed by COVID, while ensuring that owners can evict nuisance tenants and residents who can afford to pay rent but choose to game the system instead.”
Los Angeles Mayor Eric Garcetti said “tenants and landlords can rest easier” following the signing.
“No one should lose their home due to this public health crisis—and while cities like Los Angeles have strong tenant protections in place, there is no substitute for a clear, statewide framework that keeps hard-hit Californians under a roof,” he said.
According to an Aug. 21 report issued by the state’s Employment Development Department, Orange County has lost over 200,000 jobs in 2020. The county’s unemployment rate as of July was 12.3 percent, the report said, lower than the statewide rate of 13.3 percent.
A financial security study released Aug. 7 by the nonpartisan Aspen Institute in Washington estimated that from 31 percent to 42 percent of California households are at risk of eviction, based on confidence levels in the ability to pay for their next month’s rent.
Newsom called the new extension “a bridge to a more permanent solution” and called on the federal government to stabilize the housing market.
“We need a real, federal commitment of significant new funding to assist struggling tenants and homeowners in California and across the nation,” Newsom said.