SACRAMENTO, CALIFORNIA: On Thursday, California lawmakers decided to use $2.6 billion in federal stimulus money to pay off up to 80% of a few tenants’ unpaid rent only if landlords consent to forgive the rest of their debt.
It is the state’s first significant attempt of the legislation to sign into law to clear unpaid rents that have accumulated during the pandemic as a great number of people lost their jobs because of government-ordered business closures.,
Democratic Assemblywoman Eloise Gomez Reyes, the majority floor leader said, “The pandemic has created a mountain of unpaid rental debt, which has caused instability and financial hardships for both tenants and landlords.” The legislation added “urgent assistance to renters and for the first time to struggling mom and pop landlords across California.”
No one knows for sure how much unpaid rent is in California. The approximation of unpaid rent range maximum of $3.6 billion by the advocacy group Housing NOW! California to a minimum of $400 million by the nonpartisan Legislative Analyst’s Office.
Some housing advocacy groups worry that the proposal provides too much power to landlords. If landlords refuse the deal, the law would only pay off 25% of the tenants’ debt.