California state lawmakers on Monday introduced a bill to extend the partial eviction moratorium through June 30, which would give qualifying renters five more months of protection while using federal money to pay off up to 80% of most tenants’ unpaid rent, according to an agreement.
The bill would carve out a plan to divide $2.6 billion in federal aid quickly among renters and property owners here in CA. Leveraging that funding, landlords could be offered an incentive to forgive some of the back rent their tenants have racked up since April last year.
“COVID-19 continues to devastate communities across our state, and too many Californians remain one paycheck away from losing their apartments or homes,” CA Governor Gavin Newsom, Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon said in a Monday statement. “These families need protection and relief now.”
Here’s how it would work if it passes. Landlords would be paid up to 80 percent of their tenants’ missed rent if the remaining 20 percent balance is forgiven and property owners agree not to pursue evictions.
To be eligible for that protection, tenants must sign a “declaration of hardship” that they have been impacted by the pandemic and must pay at least 25% of their rent due between Sept. 1, 2021 and Jan. 31, 2022.
But if a property owner declines to forgive the unpaid rent, the courts could reduce the amount owed, and the landlord would be reimbursed up to 25 percent of the back rent. That’s only if the tenant meets the eligibility requirements.
“It’s one thing to get protections and another to be able to pay your rent when it is due,” Newsom said in a news briefing Monday. “We also address the issue of small landlords that also have to pay mortgages.”
Under the existing eviction moratorium, landlords can’t evict a tenant as long as 25% of the rent was paid. This bill would extend that policy, allowing renters to pay 25% monthly or pay off a lump sum by June 30.
If it passes, the bill is sure to help, but it’s unclear whether it will be enough to cover the debt accrued by many of California’s low-income renters since April.
California renters owe an estimated $400 million in unpaid rent, according to a Jan. 19 document published by the legislative analyst’s office. This number is down from the $1.7 billion estimated for California in a nationwide analysis in December of last year, but the state’s assessment does not include the underlying rental debt that existed before the onset of the coronavirus pandemic.
“While the proposal doesn’t go as far as I want — more work lies ahead — we must pass it this week to keep people housed and help people avoid huge rent debt,” Sen. Scott Wiener (D-San Francisco) said. California’s unemployment rate spiked 9% in December amid sweeping closures and surging cases, and many renters could be sinking even deeper into debt.
Our state lost more than 2.6 million jobs in March and April because of the coronavirus pandemic. While we have regained more than 44% of those jobs, it’s still down 1.4 million jobs compared to this time last year. But it’s been difficult to measure the impact this has had on renters.
Lower-income households have experienced more job losses during the pandemic, according to the legislative analyst’s office. Those with an annual income of less than $50,000 made up 15.1% of the estimated unemployed.
In another effort to extend a hand to struggling, low-income households, lawmakers will also consider Newsom’s proposed Golden State Stimulus. If approved by the Legislature, Californians with an annual income of $30,000 could receive a one-time $600 check in tandem with federal aid.
Newsom is encouraging lawmakers to act quickly on his Immediate Action Plan, which includes these checks. “This will act as a bridge while we wait for more federal relief,” Newsom tweeted Saturday.
For more information, check out this article by Kat Schuster
DID YOU KNOW? 49% of the U.S. poor population lives in suburban and small metro counties, while 34% live in cities and 17% in rural areas. (PEW)
DID YOU KNOW? Sales of commercial and residential properties totaled $47.1 billion in 2020, down 46% from the year before, according to REBNY. The drop in investment led to a 36% decrease in tax revenue, resulting in a $1.6 billion loss for the city and state.
DID YOU KNOW? Homeowners with delayed mortgage payments has flatlined at about 5.5%, according to the Mortgage Bankers Association, down from a peak of 8.55% in June. Some economists are concerned about the stalling forbearance rate and worry that it could even start climbing if the economy further sheds jobs. Expect further stimulus.
DID YOU KNOW? U.S. home sales in 2020 surged to their highest level in 14 years, fueled by ultralow interest rates and a pandemic that sent buyers scrambling for more spacious homes to accommodate remote work. Economists say today’s housing market is less risky than during that boom 14 years ago. Mortgage lending standards are tighter, and the supply of homes on the market is lower relative to demand. There were 1.07 million homes for sale at the end of December, down 23% from December 2019, according to NAR. (WSJ)
DID YOU KNOW? The U.S. economy may have grown about 4% in the final three months of 2020, a great showing even in the best of times. The economy still has lots of ground to make up after the deepest recession on record. And growth slackened off toward the end of 2020 after the coronavirus pandemic roared back and caseloads reached a record high, pointing to a loss of momentum in the economy early in the new year.
DID YOU KNOW? Stan Richman sent through these staggering figures (the best ever) for the WESTSIDE of LA for year-end 2020….
*725 sales of $5 million-plus in 2020, versus 560 in 2019, (Up 30%).
*219 were $10 million-plus in 2020, versus 162 in 2019, (Up 35%).
*61 were $20 million-plus in 2020, 43 in 2019, (Up 42%).
*$30 million and $40 million-plus were slightly down from 2019.
*89% of the buyers were American.
DID YOU KNOW? Morgan Stanley’s CEO was paid $33 million in 2020, while J. P. Morgan Chase’s Jamie Dimon earned $31.5 million….both banks had outstanding years. Some frown at these high incomes, yet we need to be reminded that JP Morgan Chase employs 257,000 people globally and Morgan Stanley around 60,000. Beyonce earns over $100 million in a normal year, Lady Gaga over $35 million, Tom Brady around $25 million, Rafael Nadal, over $40 million, Ryan Seacrest about $60 million, Tyler Perry averages over $50 million per year. All of these people pay tons of taxes too.
DID YOU KNOW? The 20 best-performing hedge fund managers of all time made $63.5B for investors during the coronavirus-driven market turmoil in 2020, making it the industry’s best year of gains in a decade.
In your 90402 Real Estate News-
Three new listings this week. There are currently 27 total active listings in 90402 right now.
332 17th Street– Listed for $7,249,000. New construction, a 6200sqft Traditional style 3-level home with a pool. This lot was purchased in 2015 for $2,900,000.
420 Mesa Road– Listed for $3,750,000. This one is a Mission style craftsman with pretty canyon views and a guest house. It came on the market at the beginning of the year for just a few days at $3,900,000 before being withdrawn.
610 21st Place– Listed for $4,000,000. Cute and livable single-story traditional with pool. Just under 2,300 square feet. A little bit of updating has been done in the kitchen but baths are original. This one was on the market back in 2018 at $4,200,000 but was withdrawn after just a month.
Three properties went under contract, and very interesting…all three of them were on the market for LESS than a WEEK! There are currently 13 properties under contract total.
628 Euclid Street– Listed for $2,999,000. This a 50ft wide, 7500sqft, lot value. It was only active for 4 days before going “Pending”.
208 Alta Avenue– Listed for $4,350,000. Located “West of 7th” this 1920s traditional is on an 8700+ sqft lot. Under contract in just 4 days.
1508 Georgina Avenue– Listed for $6,795,000. Nicely updated and on a 12,300 lot. Was only active for 6 days.
Two properties sold this week, bringing the total closings, so far, in 2021 to six.
470 19th Street– Sold for $5,150,000. Originally listed at $5,399,000.
425 4th Street– Sold for $6,200,000. Originally listed for $6,495,000.