SAN JOSE, Calif. – The best hope for swift pandemic aid to struggling California tenants and landlords might come from Georgia.
State lawmakers from California and three other Western states this week are urging their congressional delegations to step up with $100 billion for rent relief – an achievable goal, they believe, if Democrats win two seats in U.S. Senate elections in Georgia, seize control of the upper chamber, and push a significant stimulus bill through Congress.
Assemblymember David Chiu, D-San Francisco, chair of the housing and community development committee, said the federal aid backed by President-elect Joe Biden and vice president-elect Kamala Harris could happen quickly if their party wins in the January special elections. Republicans hold a two-seat Senate majority with two Georgia seats at stake in the Jan. 5 runoff, and have held off on approving a large stimulus package.
States do not have enough resources to stem the crisis, Chiu said. About 1.3 million tenant households in the U.S. will have piled up $7.2 billion in unpaid rent by the end of the year, according to a recent study by the Federal Reserve Bank of Philadelphia. “Only the federal government has enough money,” Chiu said.
Chiu and Sen. Scott Wiener, D-San Francisco, chair of the senate housing committee, along with elected leaders in Hawaii, Oregon and Washington state, sent a letter to their congressional delegations this week urging passage of a rent relief bill.
The push comes as Bay Area renters fall tens of millions of dollars behind in rent, and a state moratorium on evictions expires Jan. 31 – a date Chiu said was chosen with the hope that a Democratic sweep in presidential and congressional elections would make a robust stimulus bill possible.
Chiu added he has been negotiating an extension to the moratorium if the crisis deepens without federal relief.
Landlords and renter advocates have also urged a major relief package from Congress, saying the building crisis could spin into widespread evictions, mortgage defaults and a collapse of rental markets.
The four elected state leaders working with Chiu and Wiener also chair housing and community development committees, and all warned about a looming health disaster. “When renters are forced out of their homes, they either end up homeless, or are forced to move into overcrowded, temporary housing that does not allow them to follow the physical distancing urged by public health officials,” the lawmakers wrote.
The Western states are facing a potential surge of evictions when emergency protections expire, lawmakers warn. Nearly 1 in 4 renters in the Western states told a U.S. Census survey in September they had little or no confidence in continuing to make rent payments.
“While each of the four states we represent have taken different approaches to preventing massive evictions during the crisis,” the lawmakers wrote, “our state and local governments lack the fiscal resources to prevent long-term financial damage to renters and landlords.”
Real estate insiders credit federal stimulus payments with helping many tenants stay current on rent during the early months of the pandemic. The supplemental payments ended in July, and federal response since has been mired in Congressional bickering.
The $2.2 trillion Heroes Act relief package passed the Democratic-led House but has been stalled in the Republican Senate. A smaller, GOP-backed Senate proposal would pump roughly $500 million into the economy.
Biden’s housing plan supports additional funding for renter legal assistance during the pandemic, and long-term spending on affordable housing.
As federal lawmakers continue the stimulus stalemate, property owners and tenants are feeling the grind of the monthslong economic slowdown.
Sid Lakireddy, president of the California Rental Housing Association, said property owners are not looking to evict tenants. Small mom-and-pop owners are struggling to pay their bills, and want to work with their tenants, he said.
The Bay Area rental market has been hard hit. Vacancy rates have reached 30% in some parts of San Francisco, while rent collections have dipped as low as 80 percent, Lakireddy said.
He’s hopeful a multibillion-dollar stimulus package can repair the industry. “Hallelujah,” said the Berkeley-based landlord. “We’ve been saying we need a renter relief package.”
Chiu said advocacy groups have been warning the rental housing market is strained and could lead to a jump in homelessness and greater health risks for the entire population.
“We are once again staring down the eviction cliff if action is not taken,” Chiu said. “The pandemic is not going to end any time soon.”
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