South Bay tenants, landlords anxious as evictions loom, debt piles up

Silicon Valley residents who have struggled to pay rent during the pandemic are up against a wall, hoping Sacramento lawmakers will extend an eviction ban for those hit with financial hardship.

At the same time, South Bay landlords waiting on months of overdue payments are looking to state and local governments to quickly distribute $2.6 billion in federal rent relief.

On Jan. 26 the San Jose City Council is considering reinstating its previous tenant protections — first passed last spring and renewed over the summer, but allowed to lapse when the state passed its eviction moratorium in September. And the Santa Clara County Board of Supervisors is doing the same on the same day.

Lawmakers could vote on an extension to the state’s partial eviction ban as soon as Thursday, after Gov. Gavin Newsom announced an agreement to reinstate renter protections through the end of June — and distribute federal rent subsidies.

The state’s eviction moratorium is set to expire Jan. 31. More than a million California tenants were behind on rent at the end of 2020, according to a recent analysis by the Bay Area Equity Atlas and the Housing Now! California coalition. That’s nearly 1 in 5 renters statewide, including more than 37,000 households in Santa Clara County. Those tenants owe an average of $4,651 for a combined total of $173.5 million.

“People are being saddled with an enormous amount of debt they cannot pay,” said Tina Rosales, a policy advocate at the Western Center on Law & Poverty, a legal aid group in California.

On the other hand, property owners such as Gustavo Gonzalez, who owns two small apartment complexes in San Jose, are making sacrifices so their tenants can maintain stability.

“It’s not the tenants’ fault and it’s not the landlords’ fault,” said Gonzalez, who manages the 14 units he owns himself. “And nobody wants more homelessness.”

Six months after the pandemic began, Gonzalez told San José Spotlight he only had one tenant who was having trouble paying rent because of the pandemic. But in the four months since, he says two more have fallen behind.

“I’m more than happy to help my tenants who need the help,” Gonzalez said. “But it is a sacrifice.”

Looming deadlines, self-eviction

The COVID-19 Tenant Relief Act (CTRA) signed by Newsom on Aug. 31 forbids landlords from evicting tenants for past-due rent owed from March through August — the first six months of the pandemic.

Tenants will still have to pay those debts, at least half by Feb. 28 and the full amount no later than Aug. 31. After that, landlords can sue tenants to collect the unpaid balance in small claims court, but the CTRA prevents tenants from being evicted for non-payment of rent for that six-month period.

However, from Sept. 1 to Jan. 31, the law also requires tenants to pay at least 25% of the rent they owe for those months before February to avoid eviction.

But since the start of February is less than a week away, tenants could soon get hit with a one-two punch if the state’s eviction moratorium is allowed to expire. Those tenants will owe at least one full month’s back rent and February’s rent immediately.

“Essentially, they will have to cough up two months rent in just two days and that is causing a lot of anxiety for families, especially those who have been out of work since the start of the pandemic,” said Michael Trujillo, a housing attorney with the Law Foundation of Silicon Valley.

At the end of February those tenants will also owe up to three months’ rent to pay half of what they owe from the first six months of the pandemic.

If that happens, Trujillo said it will put tenants in a precarious position where some may choose to “self-evict” — realizing that they can’t catch up on what they owe before the deadlines, renters may leave their homes — though their debts will still be owed.

“If (the tenant relief act) doesn’t get extended, people won’t be able to pay what they owe,” said Rosales, of the Western Center on Law & Poverty. “We need rent forgiveness.”

Rent relief from Congress

Congress approved a $25 billion pool of money for rent relief in its second COVID-19 stimulus package. The spending bill passed Dec. 22, but former President Donald Trump didn’t sign it until two days after Christmas. California expects to bring home $2.6 billion from that pot.

Newsom also announced the state would retain $1.5 billion of those funds to distribute through its agencies and dole out the remaining $1.1 billion to cities and counties with 200,000 or more residents to administer.

Trujillo told San José Spotlight that’s welcome relief for some of the Law Foundation’s clients. But he is worried that Treasury Department restrictions on how the funds can be distributed could mean some tenants have to wait longer to get assistance.

For example, the federal restrictions say agencies making payments must give landlords first priority by attempting to reach them over the course of 21 days before any funds can be released to a tenant.

Rosales said the governor and legislators negotiated the deal behind closed doors without the input of tenants who would be affected.

“It’s a black box and we can’t see what’s going on inside,” she said. “The last thing we want is a piecemeal, reactionary approach to distributing the federal money.”

The bill Sacramento lawmakers are considering before the current eviction moratorium expires gives priority to landlords of low-income tenants and allows them to recoup 80% of back rent from April 2020 until March of 2021 — if the landlord agrees to forgive the remainder.

The bill also makes provisions for tenants whose landlords refuse that deal, making it possible for them to continue to avoid eviction through June 31 with subsidies to help them pay the 25% of monthly rent the law requires.

Contact Adam F. Hutton at [email protected] or follow @adamfhutton on Twitter.