Temporary moratoriums on evictions in Santa Monica and other Southern California cities have left both renters and landlords questioning how tenants will be able to make up rent they couldn’t pay during the coronavirus pandemic.
More than 1.6 million Californians have filed for unemployment since March 16 and economists are predicting that the recession caused by coronavirus could have long-lasting impacts on the economy. The hospitality industry was the first to fall — half of Santa Monica’s hotels are closed, and restaurants have shed workers as they try to stay open on takeout and delivery alone — but the crisis has also reached local tech companies like ZipRecruiter and Bird, which laid off hundreds of workers last month.
Santa Monica renters may not be evicted during the crisis for not paying rent if they provide documentation showing that they have lost income due to COVID-19 or its economic impacts. After the city lifts its local emergency proclamation, tenants must pay any unpaid rent within six months. In Los Angeles, renters have one year to repay.
“The moratorium can be extended or the rent repayment period can be extended depending on the length and severity of the emergency, as well as federal and state aid provided,” said city spokesperson Constance Farrell.
But organizations representing renters and property owners doubt that renters will be able to make up rent in a year’s time, let alone six months.
“Renters are struggling just to pay their current rent, so how are they going to make up any deferred rent in the future?” said Dan Yukelson, executive director of the Apartment Association of Greater Los Angeles, which represents landlords.
Renters will receive some assistance under the CARES Act, which President Trump signed into law last week. All individuals earning less than $75,000 per year will receive a $1,200 check from the federal government, people out of work will receive $600 a week on top of their unemployment benefits for four months and federal small business loans will allow some employers to keep paying workers.
The extra unemployment benefits cover roughly 80% of the rent on the average Santa Monica studio apartment, and the $1,200 direct payment amounts to less than half.
Yukelson said the government must provide direct rental assistance so landlords can continue to make their mortgage payments.
“Many rental property owners are living month to month too, and the eviction moratoriums seem to encourage renters not to pay in spite of some having savings or enhanced unemployment benefits,” he said. “We need the government to step in with rental subsidies … or we will soon be seeing a large volume of mortgage defaults by rental housing providers.”
Healthy L.A., a newly formed coalition of more than 250 organizations, is urging the L.A. County Board of Supervisors to adopt stronger tenant and homeowner protections, including a suspension of rent and mortgage payments.
But it’s unclear whether the county has the power to do so, even under an emergency declaration. Santa Monica officials say the city does not have the authority to waive private contracts between landlords and tenants.
“At the very least, cities and counties should be aggressively pushing the state and federal government to do this,” said David Levitus, the founder of Los Angeles Forward, an advocacy group that helped form the coalition. “This is an urgent necessity and we need to figure out how to make it happen.”
Farrell said the city supports and is advocating for efforts at the state and federal levels to channel aid to impacted individuals and families, residential and commercial tenants, small business owners and property owners.
Levitus added he thinks cities should be as generous as possible in setting repayment plans.
“That fact that Santa Monica can only do six months is really not acceptable in my eyes,” he said. “It’s just not realistic.”