California Rent Relief: State To Use Stimulus Money For Ambitious Rental Forgiveness Plan

California is planning to use stimulus funding to pay off all the past-due rent across the state as part of its ambitious rental forgiveness plan.

Gov. Gavin Newsom, D-Calif., has unveiled the state’s $5.2 billion program, which would cover 100% of unpaid rent incurred by lower-income Californians during the COVID-19 pandemic. The program will be funded entirely by surplus money from the federal government's previous stimulus packages, The New York Times reported.

State legislators are also proposing to allocate $2 billion to pay for unpaid water and electricity bills, and distributing $12 billion back to taxpayers in the form of stimulus checks worth up to $600 to middle-class residents.

Gov. Newsom recently indicated plans of introducing a $100 billion bill that funds that state's education sector, as well as buy hotels and apartments for homeless Californians. More than half of the state's population is unsheltered and homeless, and each night about 114,000 Californians sleep outside or in their cars, according to the 2020 Annual Homeless Assessment Report from the U.S. Department of Housing and Urban Development.

The state's renters are also among the most burdened across the United States. More than 27% of tenants are paying more than half of their income in rent.

The state has been slow to distribute its rental relief payment. A report from the California Department of Housing and Community Development obtained by the Associated Press showed that of the $490 million in requests for rental assistance made through May 31, the state government has only paid $32 million.

“It has been challenging to educate millions of struggling tenants and landlords on what the law is,” Assemblymember David Chiu, who leads the Assembly Housing Committee and crafted the eviction moratorium in 2020, said of the program.

The state government has also received complaints about the time it takes to complete the 32-page form to request rent relief. California has since shortened the form, which now takes 30 minutes to complete from the earlier three hours. The form comes in six languages and can be filled out using a smartphone.

It remains unclear whether the Californian government will continue to ban evictions even after the federal protections expire on June 30. However, Chiu voiced concern over ending the eviction ban before Californians receive their rental relief.

“It doesn’t make sense to allow evictions when there are still billions of dollars available that could prevent those very evictions,” he told Cal Matters.

Some advocates have asked the state government to extend eviction bans until the unemployment rate among low-income earners drops to pre-pandemic levels. Many also noted that Newsom floated the idea in Univision earlier this month.

“Yes, I want to extend it,” he had said.

The rental relief program will be available to Californians who earn no more than 80% of the median income in their area. Gov. Newsom and the Democratic-dominated Legislature are now ironing out the details of what would be the nation’s most generous rent payment program.