The Long Beach City Council on Tuesday is scheduled to vote on a coronavirus proposal that would have wide-reaching consequences for tenants and landlords across the city.
The proposal, an extension of the city’s eviction moratorium that went into effect on March 25, would provide tenants with the right to have rent payments deferred for 12 months, until May of next year, instead of the current six-month window. In addition, the proposed ordinance would create protections against “tenant harassment.”
Backers of the proposed emergency ordinance say it would provide protections for renters during a time when all Long Beach residents must have a safe place in which to shelter because of the pandemic.
“The City has a responsibility to continue to act urgently in this fast-moving crisis to prevent thousands of families from facing eviction and homelessness,” 2nd District Councilwoman Jeannine Pearce said in her motion, co-authored by three colleagues.
The proposed measure would also put the city in closer alignment with directives that have already been enacted by Los Angeles County and the City of Los Angeles, protecting tenants against evictions and providing them with a 12-month rent deferral period.
Property owners, however, have expressed concerns about the proposal’s long-term effects on the housing market and a lack of protections against financial loss for landlords, particularly small ones.
“All we’re doing is pushing the problem down the road. Eventually, you have to pay the piper,” said landlord advocate Mike Murchison of Murchison Consulting. The question, he said, is who’s going to get stuck with the bill?
By extending deferred rent payments to May 2021, Murchison said, the ordinance would increase the potential losses for landlords, without providing protections against tenants who might simply skip out on rent they owe and find a new place to live.
“You’re basically inviting the tenant to walk away at the end,” Murchison argued. “You’re asking people who are living paycheck to paycheck to pay back months of rent. Good luck with that.”
Murchison argued that, should tenants default on their overdue rent, landlords could find themselves facing foreclosures because of their inability to cover mortgages and property taxes. Ultimately, Murchison said, this could open the door for large investment firms to swoop in and buy up properties in Long Beach, replacing mom-and-pop landlords.
“It’s not in the best interest of the city,” said Murchison. Instead, he argued, tenants should be required to pay a portion of owed rental payments each month, to soften the blow for landlords. “At some point in time,” he said, “we have to work together.”
Housing advocate Norberto Lopez, project director of Long Beach Residents Empowered, said he does not buy arguments that tenants would bolt on their unpaid rents and move someplace else, leaving landlords in a bind.
Among other reasons, he said, they’d find themselves looking for housing at a much higher price than they’re paying now for places where they’ve been living for years.
“If you’ve been a good landlord, the tenants will respect you and they’ll make sure you’re paid back for what’s been lost,” Lopez said.
Lopez agreed that corporate landlords buying up more properties would not be in the interest of tenants and that nonpayment of rent could pose a threat to small property owners.
“We support the small mom-and-pop landlords,” he said, “but it’s very hard to pass a policy if it doesn’t apply to everyone.”
Ninth District Councilman Rex Richardson, one of the three council members who signed on to support Pearce’s proposed ordinance, said housing insecurity was already a serious problem before the current crisis put millions of Californians out of work.
“This crisis has a lot of victims, but not a lot of villains,” Richardson said.
“I think this is about giving people a reasonable amount of time to make those back [rent] payments,” Richardson said. “There are assumptions that the economy is going to snap right back, but there’s no data to indicate that.”
Even with the 12-month deferral, Richardson predicted that many tenants will still struggle to pay back the money in an economy that has been staggered by unemployment of historic levels.
That’s why he believes direct rental assistance to tenants from the city would be the only way to bridge that gap. But that would be hard to accomplish without funding from the state or federal government, he said.
The federal CARES Act has provided states with funding to dispense in response to the coronavirus pandemic, but only counties, cities and municipalities with more than half a million residents are eligible. With a population of 470,000, Long Beach would be ineligible for direct support.
“We’re just slightly smaller than Sacramento and we received nothing,” Richardson said. Meanwhile, the state capital and its 509,000 residents received $89 million in aid.
But in a city briefing on Monday, Long Beach Mayor Robert Garcia said the city would announce the details of a rental assistance program for Long Beach residents by the end of the week.
“This is an issue that affects the tenant, but it also affects, particularly, mom-and-pop property owners,” Garcia said during the briefing. “The city is working, right now, on a program, to directly assist renters, by providing a direct rental assistance allocation.”
The mayor did not yet specify how the program would be funded, but the council previously discussed the federal Community Development Block Grant program as a possible option.
In addition to giving tenants a deferral of rent, the proposed council measure would also provide protections against what Pearce describes as harassment by landlords, including utility shutoffs and demands that tenants use their federal stimulus checks or unemployment benefits to pay rent.
The ordinance would bar landlords from asking tenants to pay “any sum received by the tenant as part of any governmental relief program,” to cover the rent. It would also impose penalties of up to $10,000 for landlords who act in violation of the ordinance..
Despite signing on as a supporter, Richardson said he was ambivalent about this provision in the proposal.
“Should people be harassed? No. Should they pay their rent? Yes,” the councilman said. “If you receive any type of federal assistance, stimulus or unemployment, you should pay your rent.”
The proposal will cover not only residential renters but commercial tenants, as well. An earlier version of the proposal did not include them.
As a commercial landlord on a variety of properties, this means the city will also be putting its own revenues on the line.