New bill would defer rent indefinitely for COVID-19 affected tenants
A bill introduced in the California Legislature this week would force landlords to defer rents for possibly years on end for tenants who’ve been unable — or unwilling — to pay for housing during the COVID-19 pandemic.
The rent-deferral period under AB 1436 by Assemblyman David Chiu, D-San Francisco, would last until 15 months after a state or local state of emergency is lifted.
“We know that in many cases local governments don’t lift their emergency orders for years,” said Debra Carlton, the California Apartment Association’s executive vice president for state public affairs. “That means an owner may have to wait years to collect rent that went unpaid during the pandemic.”
In addition to collecting no rent, landlords would receive no funding under AB 1436 to help pay their taxes, mortgages, utilities, or staff.
“AB 1436 will make our housing crisis worse,” Carlton said. “It will put hundreds of rental owners into default, leading to mass foreclosures on rental housing.”
CAA on Thursday articulated the many problems with AB 1436 in a letter to Chiu.
“The bottom line is that tenants are not only protected from eviction, they are protected from any demand by the owner to pay rent that is owed,” CAA says in its opposition letter. “This equates to free rent.”
CAA is committed to finding common sense solutions that help tenants remain in their homes while also providing rental owners with the income their need to pay their own bills, she said.
“Providing stability is critical to both renters and rental housing providers. The state and local governments must continue finding ways to re-prioritize their own budgets with a clear focus on helping residents financially impacted by COVID-19 stay in their homes,” Carlton said. We know, however, that the financial resources needed to get rent vouchers in the hands of all impacted renters are significant. That is why Senate Bill 1410 by Sen. Anna Caballero is so critical. It proposes a state-funded rent-voucher program to help pay the deferred rent and provide stability to those renters who are recovering financially so long as they remain current on their contractual rental agreements.”
CAA is calling on its members to contact state lawmakers and tell them to oppose AB 1436 — the Legislature’s new free-rent plan — and instead support real solutions to help both renters and rental housing providers. Click the button below to send a message to the Legislature.