A new COVID-19 relief bill that would allow tenants to defer rent and help landlords with state-subsidized tax credits could forestall a wave of evictions, but no firm cost estimate has yet been provided by the state.
SB 1410, which passed the Senate by a 28 – 9 vote on June 26, is now before the Assembly Judiciary Committee.
“Short-term fixes are not meant for a multi-year pandemic, this is adapted for a multi-year scenario,” Jay Cheng, deputy director of government and community relations at the San Francisco Association of Realtors, told the Northern California Record.
The June 23 Senate Floor Analysis – the most recent available – shows the bill offers tenants 10 years to pay back the deferred rent to the state.
“According to the Senate Appropriations Committee, the FTB (Franchise Tax Board) is still developing its estimates of (1) this bill’s administrative costs, and (2) revenue losses to the General Fund,” the analysis states. “While subject to considerable uncertainty, General Fund revenues would likely decline by a minimum of hundreds of millions of dollars per year between 2024 and 2033.”
The bill is supposed to help renters and landlords work together.
“Not every tenant will take 10 years, but it’s also not something they have to resolve immediately,” Cheng said.
The FTB’s initial analysis states the bill “could be a disincentive to pay rent by tenants who might otherwise pay rent or who would like to resume paying rent due to a change in their financial situation but this rent deferral agreement prevents that option.”
The Senate analysis shows the bill is opposed by the California Association of Realtors and the California Rental Housing Association (CRHA).
“The result will be a lack of income to rental housing providers, potentially increasing the likelihood of future foreclosures and a reduction in the rental housing stock because of rental housing providers choosing to leave the rental housing industry,” CRHA President Sid Lakireddy wrote in a June 19 letter to Sen. Mike McGuire, D-Healdsburg, Chair of the Governance and Finance Committee.
“The landlords will take a loss,” Cheng said. “Property owners expect to take a loss during this time, but they still get enough in tax credits to maintain their building and not fall so deep in the red that they have to foreclose. The idea of shared sacrifice is really important during this time.”