CA Lawmakers Finalizing Newsom-Backed Plan To Pay Off Overdue Rent For Eligible Tenants

Program would reportedly be financed entirely by federal funding.
UNIVERSAL CITY, CALIFORNIA - JUNE 15: California Governor Gavin Newsom attends California Governor Gavin Newsom's press conference for the official reopening of the state of California at Universal Studios Hollywood on June 15, 2021 in Universal City, California.
Alberto E. Rodriguez/Getty Images

California legislators are reportedly in the process of finalizing a plan backed by Democratic Governor Gavin Newsom that would use federal funds to pay off overdue rent for some tenants who fell behind during the pandemic.

An official with the state’s Business, Consumer Services, and Housing Agency (BCSH), which is overseeing the initiative, told ABC News that he expects the proposal to be agreed upon “any minute now” as lawmakers revise an existing rent relief program.

“Under the current program, landlords would get 80% of the rent that they are owed in exchange for forgiving 20% of the rent and clearing the rental debt from the tenant,” said Russ Heimerich, a spokesman for the agency. “What the governor proposed in May, and what they’re working on right now, is raising the reimbursement rate to 100%.”

ABC News reported, “The back rent will be paid for with federal funds left over from pandemic relief packages and aid, according to Heimerich, who said this surplus federal money earmarked for rental assistance totals $5.2 billion.”

Some Californians say they have fallen as much as $30,000 behind in rent payments since the pandemic began.

Earlier this week, Governor Newsom tweeted a link to a New York Times article with a lede that reads, “Swimming in cash from an unexpected budget surplus and federal stimulus money, California is planning rent forgiveness on a scale never seen before in the United States.”

The Times report said that the program “would pay 100 percent of unpaid rent that lower-income Californians incurred during the pandemic and would be financed entirely by federal money.”

However, another recent story from The Associated Press reported, “Gov. Gavin Newsom says California will pay off all the past-due rent that accumulated in the nation’s most populated state because of the coronavirus pandemic, a promise to make landlords whole while giving renters a clean slate.” Jason Elliott, senior counselor to Newsom on housing and homelessness, reportedly told the AP that $5.2 billion appears to be more than enough to cover all of the unpaid rent in the state.

Governor Newsom’s Press Office did not immediately respond to an inquiry from The Daily Wire seeking clarity.

According to the Times and ABC News, tenants who can show that they faced a pandemic-related financial hardship and earn less than 80% of the Area Median Income (AMI) in their region are eligible to apply for rent forgiveness. As the Times points out, “In San Francisco, a family of four would have to earn less than $146,350 to qualify.”

The proposed revision to current policy, whatever it may be, comes as federal and statewide eviction moratoriums are due to expire at the end of this month. California lawmakers are expected to extend those protections. On Tuesday, elected officials in Los Angeles County voted to extend a local moratorium through the end of September, while leaders in San Francisco approved an ordinance protecting some tenants through the end of the year.

The Los Angeles Times cited data from a racial and economic equity nonprofit called PolicyLink that estimated about 758,000 California households collectively owed $3.5 billion in unpaid rent as of late May.

Related: Amid Recall Threat, Gov Newsom Announces ‘$116.5 Million Giveaway for Vaccinated Californians’

Related: Californians Receiving Unemployment Must Start Looking For Work Next Month To Remain Eligible

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