CALIFORNIA SENATE PROPOSAL TACKLES RENTS, ECONOMIC RECOVERY

Californians unable to pay their rent because of the coronavirus crisis could have their payments covered by the state Legislature, Senate leaders announced this week, part of a massive $25 billion aid package that looks to the future to pay for relief needed today.

California has been under a mandatory stay-athome order since March 19, shuttering most of the state’s economy and sending 4.5 million people to file for unemployment benefits. State and local officials have moved to delay evictions during the crisis, prompting concerns from landlords who could face foreclosure with no rent payments.

The Senate’s solution to this is to give landlords tax credits equal to the value of their missed payments. Landlords could keep the credits, which would lower their state tax bills from 2024 through 2033, or they could sell them for cash.

Tenants would have 10 years to pay back their missed rents to the state, with some not having to pay the full amount because of an unspecified hardship exemption. The state would not charge interest.

The program would be voluntary, meaning both tenants and landlords must agree to it. If no tenants paid the money back, lawmakers estimate it would cost the state about $500 million.

“This is not a giveaway to anyone,” Democratic Sen. Steven Bradford said. “Our goal is to keep tenants housed and keep landlords out of foreclosure.”

California Apartment Association CEO Tom Bannon called the proposal a “creative effort,” but said he wants “to refine” the plan. He did not give details.

The proposal is the first significant coronavirus relief package from the state Senate, which returned to work this week after taking its first unscheduled work stoppage in 158 years. The virus has upended the legislative session, with lawmakers searching for ways to aid the state’s economic recovery while facing an estimated $54.3 billion budget deficit of their own.

This week offered the first draft of what a state aid package might look like. Senate leaders endorsed a $25 billion economic recovery fund that small businesses, nonprofits and local governments could tap to help weather the virus-induced downturn.