California considers unprecedented $25 billion recovery fund and rental relief

From today’s Los Angeles Times:

Two unprecedented proposals to help Californians weather the fiscal storm unleashed by the coronavirus crisis are expected to be unveiled Tuesday by Democrats in the state Senate — one to help struggling renters, the other to create a $25-billion economic recovery fund by issuing long-term vouchers to those willing to prepay their future state income taxes.

Taken together, the ideas suggest lawmakers are willing to launch never-before-tried experiments to avoid the unpaid debts and deep cuts to government services that resulted from the Great Recession more than a decade ago.

“We need some short-term assistance,” said Senate President Pro Tem Toni Atkins (D-San Diego) in an interview with The Times on Monday. “But we’ve got to be thinking long term on how to do this in a very strategic way.”

The proposals are scheduled to be formally unveiled Tuesday morning in Sacramento, two days before Gov. Gavin Newsom sends lawmakers a plan to erase a short-term budget deficit that could total more than $54 billion.

Neither the renter-assistance program nor the economic recovery fund would have a direct effect on the state budget in the coming weeks and months. Still, lawmakers believe both ideas could boost California’s shattered economy.

The unconventional effort to help renters would ask landlords to forgive rent payments in exchange for equally sized tax credits spread out over a 10-year period starting in 2024. The tax credits would be transferable, meaning the property owner could sell them to an outside investor and get cash immediately.

“This is a substantive proposal that protects those who are struggling to afford their rent and also keeps rental properties from going into foreclosure,” state Sen. Steven Bradford (D-Gardena) said. “This equitable strategy will keep people housed.”

Some local governments have already stepped up to address concerns about renters being evicted during the public health crisis, promoting a variety of rental assistance programs. Pending legislation at the state Capitol also seeks to prevent evictions during the coronavirus state of emergency, which was declared by Newsom in March and has no targeted end date.

Read the complete article here.

CA Senate Approves State Rent Control Capping Increases at 5% Plus Inflation

From today’s KTLA5 News Online:

California lawmakers on Tuesday moved to cap annual rent increases statewide for most tenants as a limited housing supply in the country’s most populous state continues to drive up the cost of living while pushing more people to the streets.

The California Senate voted 25-10 to cap rent increases at 5% each year plus inflation for the next decade while banning landlords from evicting tenants without just cause. Democratic Gov. Gavin Newsom says he will sign the bill into law, but first it must survive a final vote in the state Assembly where the California Association of Realtors is pushing to defeat it. Lawmakers must act by Friday.

California’s largest cities, including Los Angeles, Oakland and San Francisco, have some form of rent control, but a state law passed in 1995 has restricted new rent control laws since that year. In most places, landlords can raise rents at any time and for any reason, as long as they give advance notice.

In Pomona, about 30 miles east of Los Angeles, Yesenia Miranda Meza says her rent has jumped 20% in the past two years. Monday, she marched with other tenants through the halls of the state Capitol chanting: “Once I’ve paid my rent, all my money’s spent.”

“I’m a rent increase away from eviction, and that’s with me having two jobs,” she said “So if this (bill) doesn’t go through and I get another rent increase, I really don’t know what I’m going to do. I’m either going to be homeless or I’ll have to cram into a room with a whole bunch of other people.”

Opponents have likened the proposal to rent control — a more restrictive set of limitations on landlords. California voters overwhelmingly rejected in a statewide ballot initiative to overturn the 1995 law last year.

Read the complete article here.