Tenants advocates, landlord groups both say coronavirus eviction ban falls short

In the week after Gov. Gavin Newsom issued a statewide ban on evicting tenants unable to pay their rent because of the coronavirus outbreak, complaints surfaced from tenants and landlord advocates alike who say the executive order leaves both unprotected.

Tenants rights advocates complained that while the governor’s order forbids the ouster of renters affected by the pandemic for 60 days, it doesn’t stop landlords from starting the process by filing new eviction cases in court.

During an online news conference on Wednesday, April 1, two state lawmakers and legal aid workers expressed concern there would be a wave of evictions come June because tenants will be unable to pay their back rent as required.

“The last thing we need is a wave of mass evictions during this pandemic or immediately after the state of emergency ends,” said state Sen. Scott Wiener, D–San Francisco, chair of the Senate Housing Committee. “Right now, millions of Californians have effectively no protection from eviction.”

Meanwhile, the head of the Apartment Association of Greater Los Angeles expressed concerns that some small landlords will be unable to pay their mortgages and bills if their tenants stop paying rent. He called for government assistance to subsidize tenants who can’t make their payments.

“Many see these eviction moratoriums as carte blanche for not paying rent for any reason,” said Daniel Yukelson, the apartment association’s executive director. “While nobody wants to see anyone that is truly impacted by the virus put out on the streets, the entire burden for housing people in our communities cannot merely be forced upon the backs of private citizens.”

Newsom signed an executive order March 27 banning residential evictions in California through May 31 if tenants are unable to pay their rent because they or a family member has COVID-19 or if they lost income because of the outbreak.

Tenants must notify their landlord in writing within seven days of the due date and must retain documentation showing they have suffered a coronavirus-related economic hardship. The tenant also remains obligated to repay the full rent “in a timely manner” and can still face eviction after the moratorium is lifted.

At least 38 city and county governments in Los Angeles, Orange, Riverside and San Bernardino counties have adopted their own tenant protection measures, according to the California Apartment Association, some of which are more restrictive than the statewide mandate.

For example, the cities of Los Angeles, Pasadena, Anaheim and Santa Ana prohibit late fees for failing to pay rent during the pandemic. San Bernardino and Santa Ana give tenants six months to repay back rent.

The statewide moratorium does not override those measures, but applies in more than 400 California jurisdictions without eviction moratoriums of their own.

That leaves millions of renters unprotected, said Brian Augusta, an attorney with the California Rural Legal Assistance Foundation during Wednesday’s news conference.

If tenants can’t pay their rent due to COVID-19, landlords still can file an eviction case in their local courthouse (if it’s still open), and tenants are required to respond within five days, Augusta said. Some judges may issue a default judgment against tenants who are unaware that they need to respond.

The protections for renters under the governor’s order aren’t as strong as protections for California homeowners, who get a 90-day breather if they can’t pay their mortgages.

“The governor did something for homeowners who have a mortgage payment,” Augusta said. “That is not the case for renters. Renters have to pay their rent under the governor’s order. … If you don’t pay it, there will be an eviction. The only question is when.”

Newport Beach real estate attorney J. Kyle Janecek disputed part of Augusta’s argument, saying tenants would have 65 days, not five, to respond to an eviction filing.

“The most essential way that the order affects the eviction process is by providing qualifying tenants an additional 60 days to respond to a complaint for eviction,“ Janecek, an associate of Newmeyer and Dillion LLP, said in an online post.

Nonetheless, Janecek said the governor’s moratorium is “not a perfect solution.”

“Right now, it seems to be pushing the problems down the road past June due to the current court delays and inevitable backlog,” he said. “On its face, the governor’s order alone does not protect renters with lost income, and will require more targeted action.”

Wiener said he is co-sponsoring a bill that would create a structure for renters to gradually repay their rent overtime “so renters are not hit with a huge back-rent bill.” However, the state Legislature isn’t due back in session until April 13, at the soonest.

Meanwhile, Los Angeles apartment association director Yukelson is calling for rent vouchers and other subsidies to ensure citizens can continue to pay for housing and other essential needs without bankrupting their landlords.

Some national leaders say landlords who are unable to pay their mortgage because their tenants aren’t paying rent likely will get “forbearance“ from their lenders.

But Yukelson said that may not be enough to help all landlords, some of whom may experience financial turmoil or health impacts from COVID-19 themselves. Many small landlords and retirees depend on their rental property income.

“While some may be able to avail themselves of mortgage relief or small business loans, if housing providers are ultimately never able to collect deferred rent, they may never catch up,” Yukelson said. “As a result, mortgage relief is nothing more then kicking the mortgage default and personal bankruptcy can down the road.”

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If rent regulation raises the rent, is it worth the cost?

Can regulations give renters a break? Or do they actually nudge rents higher?

With Californians paying more of their paychecks to the landlord, debate swirls around how to best control the soaring expenses of tenants. Proposed solutions run from enabling more apartment construction to changing rules on rents increases to wondering if government intervention is needed at all.

Online rental tracker RentCafe recently studied the state-by-state variances of legal protection offered to renters. States were ranked on variables such as eviction restrictions, rent controls, terms of security deposits, tenant property and privacy rights.

RentCafe’s 10-item yardstick found California laws ranked 18th friendliest to renters.

That scorecard does not say what an above-average rank is worth. Is there a cost to renters for the regulations that most favor the tenant, such as might be found in No. 1 ranked Vermont? Are rent savings created in, say, landlord-friendly Arkansas? It eked out last place on RentCafe’s scale over West Virginia because “Arkansas is the only state where tenants can face criminal charges for failure to vacate.”

You’d expect the headaches of government oversight to somehow be passed along to the tenant in the form of higher rents, no? Following the rules is a cost of doing business, especially when these laws can limit how much — and when — a rental owner can collect.

So I filled my trusty spreadsheet with RentCafe’s rankings of renter friendliness and compared that measurement with data from the National Low Income Housing Coalition’s rental-cost scorecard for the 50 states and the District of Columbia. I sliced RentCafe’s state scores into thirds, using the highest ranked 17 states as a measure of renter-friendly places with the 17 lowest ranked states as representative of pro-landlord laws. California landed in the middle pack, by the way.

Here are five things I learned about how much landlords charge for the varying levels of regulatory hurdles among the states…

1. Size matters: The 17 states with laws most favorable to tenants tended to be less-populated, averaging 437,000 renter households vs. 1.15 million in the 17 least-friendly states. Six of the states with the smallest renter population were ranked among the 10 best places for renter protections. And big states often have big landlords who have big political muscle. California was an anomaly: the nation’s biggest renter population with some relatively renter-friendly laws.

2. Share matters, too: Renter-friendly laws require statewide lawmaking oomph. So is it any surprise that states that legally favor renters have a larger share of tenants? I found on average 40 percent of households rent in the most renter-friendly states but just 35 percent in landlord-favoring states. Vermont is 53 percent renters; California is 46 percent; and Arkansas 33 percent.

3. Higher rents: Seems you pay up for having real estate rules on your side. The 17 most renter-friendly states had an average rent of $1,102 a month for a typical two-bedroom unit vs. $1,015 where the scales of justice lean toward landlords. That’s a 9 percent premium. By this math, California rents averaged $1,608 a month, third-highest in the nation.

4. Lower pay: Kind of surprising. The average renter’s estimated monthly pay — assuming 21 days of work at renter wage — was $2,732 in the most renter-friendly states vs. $2,864 where landlords fare best legally. That’s a 5 percent shortfall for those living in pro-renter states. California bucks this pattern: Its $3,554 average renter pay is third-highest nationally.

5. Landlord’s take: Bottom line, according to my math, is that tenants pay a larger share of their income to the landlord in states that are the most renter-friendly: averaging 40 percent vs. 36 percent in pro-landlord states. Californians pay 45 percent of earnings to the rental bill, the nation’s sixth-highest share.

You can argue all you want about how much renter protections increase the size of one’s rent check. But remember, the month-to-month cost is only one variable in measuring something’s value.

Look, most renters don’t simply take the cheapest available unit. Location, condition, style and amenities are part of the equation, too.

Plus, legal limitations on the amount of rent and lease terms — good, bad and/or costly — can offer a tenant varying levels of certainty. People often pay up for peace of mind. And knowing the rent won’t go through the roof is what’s at the heart of the great rent debate.

DID YOU SEE?

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Tenants, landlords clash over rent control in Santa Ana

Tenants and landlord groups debated rent control before the Santa Ana City Council Tuesday, Feb. 6, clashing over the merits of the controversial law in the majority renter city.

A study session about whether rent control helps or harms rent-burdened tenants drew about 40 speakers on both sides of the issue, amid cheers and applause from supporters for both positions.

“I can tell you, rent control does not work,” business owner Frank Alvarez, a board member of the Apartment Association of Orange County, told the council. “I’ve seen the issues with maintenance. I’ve seen the issues with blight. … It’s detrimental to investment.”

  • Gema Flores of Santa Ana holds one of a couple dozen bilingual signs demanding “Tenant Power!” (Photo by Jeff Collins, the Orange County Register/SCNG

    Gema Flores of Santa Ana holds one of a couple dozen bilingual signs demanding “Tenant Power!” (Photo by Jeff Collins, the Orange County Register/SCNG

  • “To remain and prosper” was the motto for rent control advocates who gathered on the Santa Ana City Hall steps Tuesday, Feb. 6, before a city council study session on the issue. Residents told council members their incomes aren’t keeping up with rising rents in their city. (Photo by Jeff Collins, the Orange County Register/SCNG)

    “To remain and prosper” was the motto for rent control advocates who gathered on the Santa Ana City Hall steps Tuesday, Feb. 6, before a city council study session on the issue. Residents told council members their incomes aren’t keeping up with rising rents in their city. (Photo by Jeff Collins, the Orange County Register/SCNG)

  • Silvia Avendano, 52, of Santa Ana speaks Tuesday, Feb. 6, on the steps of Santa Ana City Hall. She told the council later her landlord evicted her without giving adequate notice because he had sold her home, cutting off the utilities to force her to leave early. (Photo by Jeff Collins, the Orange County Register/SCNG)

    Silvia Avendano, 52, of Santa Ana speaks Tuesday, Feb. 6, on the steps of Santa Ana City Hall. She told the council later her landlord evicted her without giving adequate notice because he had sold her home, cutting off the utilities to force her to leave early. (Photo by Jeff Collins, the Orange County Register/SCNG)

  • More than 40 supporters of rent control and just-cause evictions gathered on the steps of Santa Ana City Hall before a city council meeting Tuesday, Feb. 6. (Photo by Jeff Collins, the Orange County Register/SCNG)

    More than 40 supporters of rent control and just-cause evictions gathered on the steps of Santa Ana City Hall before a city council meeting Tuesday, Feb. 6. (Photo by Jeff Collins, the Orange County Register/SCNG)

  • Silvia Avendano, 52, of Santa Ana speaks at a news conference called by rent control supporters before a Santa Ana City Council study session on the matter. (Photo by Jeff Collins, the Orange County Register/SCNG)

    Silvia Avendano, 52, of Santa Ana speaks at a news conference called by rent control supporters before a Santa Ana City Council study session on the matter. (Photo by Jeff Collins, the Orange County Register/SCNG)

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But many residents spoke of the difficulties they have affording their rent and the fear they have of eviction and landlord intimidation.

“I live as I can, not as I want. It’s very harsh,” said Santa Ana renter Sarai Arpero, a mother of four who had to move 10 times in 15 years. “Our salaries will never be enough if we don’t have rent control.”

Residents also called on the council to enact “just cause evictions,” requiring landlords to give a reason — like failure to pay rent or lease violations – before seeking to oust a tenant. Under state law, landlords can evict tenants at will provided they give them sufficient notice.

The council requested the study session after citizens groups appeared during a September meeting to demand rent control.

The issue has been gathering steam as California enters its eighth year of steadily rising rents. According to news reports, the Bay Area cities of Richmond and Mountain View adopted rent control ordinances in 2016, and rent control campaigns have been underway in such cities as Sacramento, Pacifica, Glendale and Long Beach.

University of Southern California real estate economist Richard Green, one of two experts appearing before the council, reported that most academic studies found rent control can do more harm than good.

“The costs, to a large extent, fall on low-income people,” he said. Studies found, for example, that affluent tenants hang onto rent-controlled units for years, leaving low-income newcomers competing for non-rent-controlled units. Studies also found rent control discourages mobility and renovation.

At least one study found, however, landlords often reap a windfall from inflated rents since state regulation discourages sufficient apartment construction.

“The reward doesn’t reflect economic activity,” Green said.

Meanwhile, Tracy Condon, the executive director of Santa Monica’s Rent Control Agency, said rent control has worked in her city for the past 39 years, noting that landlords are penalized if they don’t properly maintain rent-controlled buildings. City regulated rent hikes, meanwhile, ensure landlords get a fair return.

“It’s a housing policy that helps people be secure in their housing,” Condon said. “It’s been an effective policy in Santa Monica.”

One speaker retorted that the average rent in Santa Monica is over $3,600 a month, according to RentCafe.com, while Santa Ana’s rent averages $1,718 a month.

“The problem is not enough housing,” added apartment owner Richard Rosham. “But rent control is not the answer. It doesn’t increase the supply of housing. The city should be welcoming builders with open arms. … Say no to any form of rent control.”

Rent control, added California Apartment Association regional leader Tommy Thompson, “is a proven disaster up and down the state.”

Tenants, meanwhile, gave emotional accounts of their difficulties finding housing and of their struggles with homelessness.

Santa Ana resident Silvia Avendana said her landlord gave her less than the required two months notice to move out of her home because he was selling it, cutting off the utilities to force her to leave early. She supports just-cause evictions because “I don’t want anyone to go through what I faced.”

“We fear intimidation and being targeted by the landlord,” added Lucero Garcia. “Santa Ana residents can no longer tolerate living in fear.”

Council members vowed to study the matter further, but were mostly non-committal on the issue.

“There’s good arguments made on both sides,” Council member Juan Villegas said.

But long-time Mayor Miguel Pulido didn’t pull punches, calling rent control “a slippery slope” that could have unintended consequences.

“I don’t think it’s a very good idea to do rent control,” the mayor said.

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