Unpaid Rent Will Be Covered By State of California If New Measure Passes

On Monday, California Governor Newsom and state legislators made a pledge to California residents who have been unable to pay rent during the COVID-19 pandemic. They are proposing that the state would pay 80% of most people's unpaid rent from April 2020 to March 2021 -- with the caveat that landlords agree to forfeit the other 20%.

Timing is critical, as the California law that bans landlords from evicting tenants (as long as they pay at least 25% of their rent), expires on February 1, 2021.

The Legislature is scheduled to vote on the measure this Thursday. If passed the measure would extend the deadline and clear the slate for California renters facing billions in debt, while allowing the state to utilize federal rent relief funds to pay the debt and put pressure on landlords. Advocates for the plan say it "maintains California’s COVID eviction protections as the strongest statewide rules in the nation.”

Should landlords refuse to forgive the 20% balance, the state will only pay 25% of any unpaid rent, but doing so would still ensure that tenants are not evicted, since the proposal includes of extension on the eviction ban through June 30, 2021.

As representatives for both fair housing and landlords argue the benefits and pitfalls of the measure, California faces these stark realities as a result of the pandemic:

  • 1.4 million jobs have been lost
  • 19 million claims for unemployment (over $114 billions in benefits have been paid)
  • 1.1 billion households are behind on their rent (this number varies by source)
  • 12% of all California households are behind on paying their water bill

NOTE: Federal rent relief funds can only be distributed to households whose income is 80% or less of the area median income. It prioritizes relief for households at 50% or less of the median income and those unemployed for at least three months.

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