California Plans to Pay Off All Unpaid Rent Racked Up During Pandemic

By Tom Ozimek
Tom Ozimek
Tom Ozimek
Reporter
Tom has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'hit your target' and 'leave the best for last.'
June 22, 2021 Updated: June 22, 2021

California authorities announced Monday the state plans to pay off 100 percent of unpaid rent accumulated during the pandemic, with the money to come from some $5.2 billion in federal COVID-19 relief funds.

California Gov. Gavin Newsom wrote in a tweet Monday that, “California is planning rent forgiveness on a scale never seen before in the United States,” attributing the post to a report by the New York Times, which noted that state lawmakers were putting the final touches on the program.

While eligibility criteria for the newly proposed program are still unclear, reports indicate that the measure would both give renters in arrears a clean slate and make landlords whole.

The state currently has about $5.2 billion on hand from multiple Congressional aid packages that is earmarked to pay off unpaid rent, Jason Elliott, senior counselor to Newsom on housing and homelessness, told the Associated Press. Elliott added that this amount should be sufficient to cover all unpaid rent in California.

“Nationwide this is certainly the largest rent relief there’s ever been,” said Russ Heimerich, a spokesman for the California Business, Consumer Services, and Housing Agency, a state organization that is overseeing the rent relief program, in remarks to The New York Times.

The proposed measure is separate from California’s existing COVID-19 Rent Relief program, which is designed to help lower-income Californians who are behind on rent. Under the existing program, eligible renters can apply for landlords to be reimbursed for 80 percent of each eligible renter’s unpaid rent between April 1, 2020, and March 31, 2021. The condition is that the landlord must agree to waive the remaining 20 percent of unpaid rent for that time period. If the landlord chooses not to participate in the program, eligible renters can apply to receive 25 percent of unpaid rent accumulated between April 1, 2020, and March 31, 2021.

Eligible renters for the existing rent relief program must have a household income that does not exceed 80 percent of the Area Median Income, must show that they have experienced financial hardship during the pandemic, and must demonstrate a risk of experiencing homelessness or housing instability.

Still unsettled is whether California will continue to ban evictions for unpaid rent beyond June 30, a pandemic-related order that was meant to be temporary but is proving difficult to undo.

Newsom and legislative leaders are meeting privately to decide what to do with respect to extending the eviction ban, part of the negotiations over the state’s roughly $260 billion operating budget.

Keith Becker, a Sonoma County property manager, told The Associated Press that 14 tenants are more than $100,000 behind in rent payments. Becker said it’s put financial pressure on the owners, who he said have “resigned themselves” to renter protections, which he noted were aimed at addressing a public health emergency and not meant to be permanent.

“We should do our best to get back to the starting point where we were in December of 2019. Anything other than that is taking advantage of a crisis,” Becker said.

The Associated Press contributed to this report.

Tom Ozimek
Tom Ozimek
Reporter
Tom has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'hit your target' and 'leave the best for last.'