Coronavirus relief could hurt Bay Area landlords and tenants

With U.S. rent assistance on the horizon for struggling landlords and tenants, Bay Area housing advocates say the area could be harmed by a federal allocation that favors people more than costs and number of tenants.

In December, Congress allocated $ 25 billion in direct assistance to tenants and homeowners, with states receiving assistance based on population, not a more favorable formula for the high-cost Bay Area that would take into account the number of tenants or estimated rent due.

Bay Area housing advocates say the area’s high percentage of renters and high rents could mean federal aid could cover less debt here than in other low-cost areas. “This is clearly insufficient,” said Randy Shaw, executive director of the Tenderloin Housing Clinic. But, he added, “we’ve stepped in the door.

But experts are hopeful that a new US Senate, held by the Democrats, will adopt a larger aid package to cover more of the tenant debt accumulated during the Covid-19 pandemic.

The law provides for emergency distribution to be delivered to states and municipalities by the end of January. Most of the relief will go directly to homeowners and utility providers. Low-income households earning less than half of the median income in their area will be prioritized and tenants earning more than 80% of the median income will be ineligible.

A new analysis from consulting firm Novogradac estimates that Bay Area counties could receive around $ 500 million of the $ 2.6 billion planned for California. San Jose and San Francisco, which are expected to receive $ 68 million and $ 58.7 million respectively, are among the top 20 recipients among major US metropolises. San José officials estimate, however, that the city will only receive about $ 30 million in direct aid.

Total allocations could reach $ 128 million in Santa Clara County, $ 111 million in Alameda County, $ 51 million in San Mateo County, $ 76 million in Contra Costa County and 17 million dollars in the Marin, according to the analysis. City estimates are included in county totals.

Los Angeles County, including the city, could receive $ 668 million, the second-highest total in the country behind New York.

Housing advocates say the need is clear, although the exact dollar figure is elusive. The National Low Income Housing Coalition has estimated that U.S. tenants have lost $ 30 billion to $ 70 billion in late rents. The California Apartment Association said the California award will only cover a fraction of tenant debt.

Mark Shelburne, housing policy consultant at Novogradac, said federal agencies have yet to work out the details of the distribution. But the relief could quickly help struggling tenants in government-backed affordable housing, he said.

“This money could, all at once, bring each of these tenants up to date,” Shelburne said. “It could give landlords and tenants a lot of leeway. “

About half of the Bay Area’s population is renter. Although the Bay Area rents declined during the pandemic, they are still among the highest in the United States. The median price of a two-bedroom in San Jose is $ 2,650 and $ 2,560 in Oakland, according to the Zumper ad site.

Assembly member David Chiu, D-San Francisco, said federal money would bring relief to needy Californians in high-cost cities. But he added that he will continue his efforts to extend the moratorium on state evictions until the end of 2021. Tenant protections expire on Jan.31 and landlords will be able to begin evictions for non-payment during the course of the year. of the final stages of the pandemic.

Homeowners have fought the extension of the moratorium, saying small homeowners have also struggled to pay their bills and mortgages.

Matt Schwartz, CEO of the California Housing Partnership, said federal assistance could reach homeowners and tenants through existing programs within weeks. Nonprofit landlords house around one million tenants in California, he said.

Although Schwartz has said more help is needed, the new funding “will become critical.”

The aid comes as demand increases, unemployment benefits expire and a new wave of Covid-19 cases has flooded hospitals in the Bay Area and state.

Jennifer Loving, CEO of the nonprofit Destination: Home, said the pandemic has hit minority communities hardest, where workers often live paycheck to paycheck.

“I don’t know if we really have our hands on the full extent of the suffering,” Loving said. Tenants have used their savings, retirement accounts and payday loans to pay their bills, leaving families financially insecure in the long run, she said. “Who knows what the global suffering has been? “

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