New COVID-19 bill includes federal funds for up to 80% of unpaid rent

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The California Legislature approved a bill Jan. 28 that would reimburse qualifying tenants and landlords for most unpaid rent accrued since the COVID-19 pandemic shut down the economy last spring.

SB 91 would use federal funds to pay up to 80% of back rent accumulated between April 1 of last year and March 31, 2021. A landlord who accepts the money would have to forgive the remaining unpaid rent for that period.

Additional federal dollars would be available to help cover unpaid rent from March through June of this year.

To qualify for the federal dollars, the unpaid rent must be owed by a tenant who earned less than 80% of the area median income in 2020 or at the time of application. According to the Business, Consumer Services, and Housing Agency, landlords and tenants would be allowed to apply for those dollars beginning in March 2021. 

The state’s distribution of federal funds to cover unpaid rent is limited by the federal rules.  Legislators are now considering additional state funding  for rental assistance.  Those dollars would go to those populations that either are not eligible or who may require additional rental support, above and beyond that which is provided here. 

SB 91 is intended as a replacement for California’s COVID-19 Tenant Relief Act of 2020, or AB 3088, which expires Jan. 31.

Under AB 3088, COVID-19 affected tenants were given until Jan. 31 — less than a week from now — to pay 25% of back rent accrued since Sept. 1, 2020, or be subject to eviction. SB 91 would extend the Jan. 31 deadline until June 30.

It’s worth noting, however, that the federal eviction moratorium, which runs through March and will likely be extended by Congress, may prohibit  evictions that would otherwise have been allowed under AB 3088.

“While the bill doesn’t contain everything we asked for, the important provision here is the payment of dollars for rent that is owed,” said Debra Carlton, executive vice president of state public affairs. “Without this money, many landlords are at risk of losing their rental units. It is imperative that the state release that money quickly.”

In addition to providing up to 80% of back rent owed, SB 91 would provide additional dollars as an incentive to local governments that agree to follow the state rules established through SB 91. The California Apartment Association argued that a consistent standard will help with compliance for both owners and tenants. Local governments that implement their own rules for distribution of money will not receive additional dollars from the state.

Tenants must return an attestation to owners declaring under penalty of perjury that they have been negatively affected by COVID. 

Carlton said it is vital that renters understand they still must pay 25% of the rent owed by June 30, whether they pay out-of-pocket or with federal funds under SB 91. Failure to do so can lead to eviction.

The Assembly and Senate plan to vote on SB 91 on Thursday.

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