California Enacts Eviction Moratorium

Ban on evictions until February, signed by Gov. Gavin Newsom, replaces prior relief set to expire this week

The bill approved late Monday addressed what advocates called a looming wave of evictions. The Capitol building in Sacramento.

PHOTO:SALGU WISSMATH

ByChristine Mai-Duc Sept. 1, 2020 3:21 am ET

Source: https://www.wsj.com/articles/california-enacts-eviction-moratorium-11598944854. Accessed on September 19, 2020.

California's legislature passed a bill late Monday granting renter who are financially affected by the Covid-19 pandemic a reprieve from evictions, which were set to resume Wednesday when prior relief expires.

The bill passed with supermajorities in both houses of the Democratic-controlled legislature in the final hours of its two-year legislative session and addresses what advocates had said was a looming wave of evictions. Democratic Gov. Gavin Newsom, who crafted the compromise with legislative leaders, tenant advocates and landlord groups last week, immediately signed the bill into law. It takes effect immediately.

Backers say it will help keep California's 17 million renters housed as the state's economy remains largely closed during the pandemic. The measure would forestall until Feb. 1 evictions for tenants who declare that they have lost income due to the impact of Covid-19 on the economy.

All back rent owed by the tenant from March 1 through Aug. 31 of this year would be converted to consumer debt and couldn't be used as grounds for eviction. To receive continued protection, a tenant would have to pay at least 25% of their cumulative rent between Sep. 1 and Jan. 31. The remaining balance would also become consumer debt, which landlords could pursue in small-claims court starting March 1 of next year.

Even the bill's strongest supporters said it was only a stopgap that leaves tenants treading water financially unless and until the federal government provides additional stimulus funds to keep families and landlords afloat.

Eviction relief was one of the most hotly contested issues in the statehouse during the final weeks of the legislative session, which was evenmore chaotic than usualdue to the coronavirus pandemic.

David Chiu chairman of the Californian Assembly housing committee, center, spoke during a news conference, in Sacramento on Feb. 24.

PHOTO:RICH PEDRONCELLI/ASSOCIATED PRESS

Assemblyman David Chiu, a Democrat from San Francisco, called the revised proposal an "imperfect solution to a colossal problem." He had proposed giving renters up to a year to pay back rent after the Covid emergency ends.

"Through the negotiations it became clear that the choice was not between this proposal and a stronger one, but this was a choice between this proposal and nothing," Mr. Chiu said. "The consequences of not doing something are too dire to comprehend."

The California Apartment Association, which represents landlords statewide, called the eviction relief measure a balanced approach that would give small landlords a chance to stay solvent.

"Millions of them are small mom and pops that in most cases treat their tenants like family, have reduced the rent and are trying very hard to do the right thing in this unfortunate pandemic," said Debra Carlton, a lobbyist for the association.

Tenants living in cities or counties with stricter eviction moratoriums related to the pandemic, such as those in San Francisco and Los Angeles, would remain protected under the local measures until they expire.

More than a dozen states have passed emergency rulesseeking to halt evictions and foreclosuresduring the coronavirus pandemic, according to a database from the National Conference of State Legislatures. Nationwide, millions of people are at risk of eviction asefforts to pass additional stimulus assistancein Congress continue to stall.

Pea Nunez, a freelance videographer who lives in the Boyle Heights area of Los Angeles, hasn't worked since the pandemic began and said she couldn't afford to pay rent along with her other bills on unemployment assistance. As of Tuesday, she and her roommates will owe more than $19,000 in back rent.

"Where are we going to get that money from?" said Ms. Nunez. "Are they expecting us to let go of our cars, to let go of food?"

Mr. Chiu said legislators would need to re-examine the issue of evictions when the legislature begins a new session in January.

As midnight drew near on Monday, tensions flared in the state Senate as GOP members, all but one of whom were under quarantine orders and voting remotely, accused the Democratic majority of trying to silence them. When a Democrat moved to limit debate to speed things along, GOP Sen. Melissa Melendez described the proceedings with an expletive. She and other Republicans accused Democratic leaders ofintentionally muting them on the Zoom video call. After a prolonged recess, Senate leaders of both parties urged a "reset" and resumed their business with just over three hours remaining.

Protesters in Los Angeles called on legislators to pass an eviction moratorium on Aug. 20.

PHOTO:LUCY NICHOLSON/REUTERS

Among the other bills passed by the legislature were aban on menthol cigarettes and other flavored tobacco, which Mr. Newsom signed into law, a rule that the state Attorney General must investigate officer-involved fatal shootings of unarmed civilians and a requirement for corporate boards toinclude at least one member from an underrepresented minorityby the end of next year.

Mr. Newsom hasn't stated his position on the latter two bills. He has until Sept. 30 to sign or veto legislation, after which they automatically become law without his signature.

Hundreds of thousands of renters may miss rent payments for May as the coronavirus crisis enters its third month in the U.S. For smaller landlords, that means facing their own financial crisis. WSJ's Jason Bellini reports. Photo: Fadhila Hussein (Originally Published April 30, 2020)

This week's reading is not so much about the export / import activities we study in our class. However, all businesses work in a society and some of societies problems will impact any business. As you think about the answers below think about this from both the perspective on the individual and the business owner. Remember, just because the government says a person does not have to pay rent to stay in an apartment the owner of the property still has taxes to pay as well as other property related expenses.

Questions:

1. In your opinion, is the State of California's decision a proper role of state government? Why or why not? (As you think about this question your answer should be based upon some facts which you have learned in school.)