California eviction moratorium ends, leaving tenants facing ‘tsunami of evictions’

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California could become a ground zero for a homeless crisis, as the end of the state’s temporary eviction halt – which officially expired on Thursday – means tenants in arrears risk being forced to leave. leave their home.

Until September 30, state law automatically prohibited landlords from evicting people for unpaid rent. However, from Friday, tenants with unpaid rent will only be able to be protected from evictions if they have requested help. Tenants are still responsible for unpaid rents, but cannot be evicted if they meet this threshold.

As a result, Friday officially marked the countdown for the Golden State to protect tenants from what a lawyer called an impending “tsunami” of forced tenant eviction, a microcosm of what debt tenants face. nationwide after the Supreme Court struck down a federal moratorium.

California is scrambling to make sure renters with unpaid rent know they can still stay in their homes after that date, but only if they’ve sought help from the state, which has a total $ 5.2 billion federal to help pay off rent owed. by tenants who have lost their jobs or their income.

On Monday, they asked for help, asking for nearly $ 3 billion.

The state has disbursed nearly $ 650 million to around 55,000 households so far and has approved another $ 950 million in aid that is in the process of being disbursed. However, it is not known how many requests are still pending.

“There are absolutely a very large number of pending requests for which the documents have been submitted to the state, but the funds have not yet been released,” Ora Prochovnick, director of litigation and policy, told Yahoo at the Eviction Defense Collaborative (EDC). Finance Live this week. The non-profit organization helps low-income tenants respond to eviction lawsuits.

According to state officials, rent relief will be available to tenants and residents in need of financial assistance until funds run out. However, Prochovnick does not think the state allowance is sufficient to cover everyone who needs help.

“Absolutely not. It seems like a huge number and it’s just not going to fix the problem and it will require additional funds,” added Prochovnick.

A recent analysis from Policy Link, an Oakland-based research company, found that more than 724,000 homes are in arrears with residents owing a cumulative $ 2.46 billion.

“Tsunami of evictions”

Chaunda Lee, a single mother of eight who has five children living with her, brings groceries home to cook her children’s dinner, in Louisville, Ky., United States on August 19, 2021. Lee was granted a stay. of her eviction as an extended CDC moratorium was applied to her case, although the landlord told the court that she had not paid rent for six months after the two months of free rent she had given him. offered. REUTERS / Amira Karaoud

The state’s emergency rental assistance program can cover 100% of rents in arrears through April 2020, as well as three months of future payments. The state previously covered 80% of a tenant’s rent debt, but now anyone approved for assistance under the previous program will automatically see the remaining 20% ​​paid as well.

With the end of the moratorium on state evictions, it is essential that the funds are quickly distributed. But Prochovnick says the challenges in the application remain.

“There’s a lot of documentation and then you overlay the language barriers,” she said, referring to non-English speakers.

“There are attempts to have adequate translation services, but not all of them are working as well as they could be. And then there is the digital divide, ”she added. “The whole system has been set up to work online, not all tenants who need help, who have access to email or the Internet, or even cell phones. “

A tenant at the University of Pennsylvania in California who applied for rent assistance also found that the majority had about $ 3,050 in “ghost debt” that they had borrowed to pay their rent and that was not covered by. aid programs.

Although the pace of disbursements has improved since June, low-income tenants will still have some protections after the state’s ban on eviction ends.

However, homeowners who have given up paying for more than a year – – are eager to collect payment or charge occupants.

“I know it’s been reported, there’s going to be this huge tsunami of evictions and I don’t think it’s going to happen,” Lucinda Lilley, president of the San-based Southern California Rental Housing Association, told Yahoo Finance. Diego. maintenance.

State law now prohibits landlords from obtaining an eviction court order unless they show that they “have done their utmost” to give tenants the option of seeking rent relief until they are rented out. ‘in March 2022.

“I hesitate to say who has the upper hand and who does not,” added Lilley.

“The majority of housing providers have educated their residents and helped them through the process, which is not an easy process to go through to get these funds,” she said.

But with many of these emergency policies adopted in response to the pandemic, the eviction ban has had disparate effects on small homeowners, known as. Some are starting to receive the money they are owed.

“We have a client who owns five apartments, she had a tenant, the last time the tenant paid was in April 2020,” Lilley added.

“Not a dime more until about four weeks ago, when the tenant finally decided, ‘Okay, I’ll go to the rental assistance program,” and we were finally able to raise over 20,000 $ for her, “Lilley said.

We are now at a point where I don’t think I would suggest extending the moratorium again because the tenant program is working well enough that if landlords and tenants don’t take advantage, there are others. reasons.Mark Zandi, Moody’s Analytics Economist

As different parts of the country continue to distribute relief funds to tenants and landlords, housing advocates still expect a sharp increase in evictions. even a month after the Supreme Court’s decision to overturn the federal moratorium on evictions.

“We did not see a wave of evictions after the Supreme Court ruling [though] there were a number of local moratoria in place. said Prochovnick. “We’re going to be in a very different picture on October 1.”

Several progressive lawmakers introduced a bill last week that would re-impose a moratorium on nationwide evictions at a time when coronavirus cases have increased due to the rapid spread of the Delta variant.

While many tenants face eviction, the pressure to reinstate the federal moratorium continues.

The Treasury Department urgently indicated that the rent aid had been distributed between January and the end of August. Meanwhile, about $ 2.3 billion in aid was spent on rent, utilities and missed payments in August, up from $ 1.7 billion in July. This means that more than 420,000 households were helped in August, up from 340,000 in July.

However, Moody’s Analytics chief economist Mark Zandi doesn’t think the extension of the federal moratorium is “necessary” at this time.

“We are now at a point where I don’t think I would suggest extending the moratorium again, because the tenant program is working well enough that if landlords and tenants don’t take advantage, there are others. reasons. Zandi said.

According to one, economists expect that over the next six months, around 3.4 million tenants in distress will have received assistance, or more than 80% of those eligible, but could leave close to 800,000 of those eligible for aid threatened with deportation until early next year.

Yet it’s still unclear whether Congress will take action and reimpose the federal moratorium on evictions.

“There is no slam dunk solution here,” Zandi said. “But when you add up the debits and credits, putting in place moratoria” – especially in states like New York and California, where the eviction process is long and expensive – “it ends up being a net positive for the economic situation of the State “.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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