California cities and counties have one week to decide whether they’ll conform with the state funding allocation under SB 91, the latest legislative response to the COVID-19 pandemic and its impact on tenants and landlords.

SB 91, signed into law last Friday, creates a framework to distribute $2.6 billion in federal funds to landlords who have lost rental income during the COVID-19 pandemic. Landlords with qualifying tenants can receive up to 80% of the rent owed if they agree to forgive the remaining 20%.

Local governments that decline to follow state rules established through the legislation, including the 80%/20% payment allocation, will leave a total of $1.2 billion on the table. The city of Los Angeles alone will leave behind $127.3 million if it doesn’t follow the state formula, while San Francisco is expected to leave behind $28.2 million. It’s in each local government’s best interest to follow the state rules, and they’ll have until Friday, Feb. 12, to let the state know they intend to do so.