California to offer more money for unpaid rent, extend eviction moratorium in Newsom deal

Gov. Gavin Newsom and state lawmakers announced a deal Friday to extend the state’s eviction moratorium and rent relief program that was set to expire at the end of this month.

The eviction ban is now scheduled to sunset on September 30, 2021. The agreement includes $5 billion in federal rental assistance to landlords and tenants.

Additionally, the new agreement would increase rent reimbursements for late and future rent payments to 100% for landlords and tenants.

Previously, the state rental assistance program offered tenants and landlords up to 80% of unpaid debts.

“California is coming roaring back from the pandemic, but the economic impacts of COVID-19 continue to disproportionately impact so many low-income Californians, tenants and small landlords alike,” Newsom said in a statement. “That’s why I am thankful for today’s news from the Legislature – protecting low-income tenants with a longer eviction moratorium and paying down their back-rent and utility bills – all thanks to the nation’s largest and most comprehensive rental assistance package which I am eager to sign into law as soon as I receive it.”

California has extended it ban on evicting tenants who’ve been financially affected by COVID-19 several times since the start of the pandemic. Advocates say that halting evictions prevented a wave of homelessness and kept the virus from spreading because people were able to remain in their homes.

Newsom first signed an eviction moratorium into law at the end of August 2020, and then lengthened it to expire at the end of June.

Since August, renters were safeguarded from eviction if they were able to prove a COVID-related hardship like job loss or salary reduction. They had to pay a total 25% of their rent starting in September, but could submit that amount either in monthly installments or a lump sum.

The law also set up a rent relief program for those facing COVID-related rent debt. Landlords could earn up to 80% of any missing payments accrued between April 2020 and March 2021, as long as they agreed not to evict their tenants and forgive the remaining 20%. Tenants could still get help paying 25% of their rent if their landlords decided not to participate..

The program relied on $2.6 billion in federal aid, divvied up between state and local programs.

As of Wednesday, 54,520 tenant applications requesting $687.8 million in aid have been submitted to the state’s Housing is Key program. So far, 5,443 households have received $61.6 million in relief. Locally run rent relief programs are also struggling to distribute money, including five counties in the Sacramento region that are currently sitting on million of dollars in assistance.

The state recently streamlined the application process to more quickly provide the aid, which has often taken weeks, if not months, to be administered.

In a statement, Speaker Anthony Rendon said, “This moratorium will keep families in homes, provide critical financial support to landlords, and help protect our supply of rental housing.”

Assemblyman David Chiu, the San Francisco Democrat who has worked on the moratorium law since last year, said the current moratorium has helped California “avert a massive wave of evictions.”

“But we can’t let up as we see the light at the end of the tunnel,” Chiu added. “Turning the eviction spigot on on July 1 when the state is sitting on billions of dollars that could prevent those evictions would be tragic.”

This story was originally published June 25, 2021 at 10:00 AM with the headline "California to offer more money for unpaid rent, extend eviction moratorium in Newsom deal."