The state program is designed to wipe away back rent accumulated by low-income tenants, while providing property owners most of the money those tenants owe
The pandemic has put millions of people out of work, with many falling behind on rent. Temporary eviction restrictions have kept many delinquent renters housed, but missed payments have to be paid back eventually.
To help, California (US) set up a program that uses federal funds from the December stimulus law. The state program is designed to wipe away back rent accumulated by low-income tenants, while providing property owners most of the money those tenants owe.
The application system, for tenants and landlords, went live Monday.
Lourdes Castro Ramírez, secretary of the state’s Business, Consumer Services and Housing Agency, said the program “will help keep thousands of people in their homes and eliminate a substantial amount of household debt that has been accruing during this pandemic.”
A lot depends on the program rolling out successfully. The growing debt burden tenants are incurring not only threatens to potentially force them from their homes, but also could damage their credit and hurt their ability to find new housing. And small property owners say that as rent goes unpaid they are increasingly struggling to keep up with mortgages, property tax and maintenance.
Since the pandemic has caused a hit to incomes, qualification is not based on pre-pandemic income, but on 2020 or current income.
Low-income tenants with pandemic hardships could see all the rent debt they accrued from April 1, 2020, to March 31, 2021, wiped away. For that to happen, a landlord must agree to forgive 20% of the debt. If the landlord does so, the state program pays the property owner the remaining 80%.
If a landlord does not forgive the 20%, low-income tenants can receive funds to pay 25% of their rent for that period.
Under state rules, landlords can’t evict tenants for unpaid rent as long as the tenant pays, by June 30, 25% of what they owe from September 2020 to June 2021.
Under the rent relief program, tenants can get funds that will pay for 25% of their future rent. Utility relief is also available.
Undocumented immigrants are eligible for all the relief, and people will not be asked about their citizenship status.
