Market Update: Current Legislation Being Made to Combat COVID Related Issues in the Real Estate
Learn about the latest legislation changes and proposals regarding multifamily real estate investing.
Prop 21- Rental Affordability Act Update
Since our last email, there have been updates regarding Proposition 21, the Rental Affordability Act which seeks to overturn Costa Hawkins. In a September 11th press release, California State Governor Gavin Newsom stated his opposition against Prop 21. Newsom stated:
“In the past year, California has passed a historic version of statewide rent control – the nation’s strongest rent caps and renter protections in the nation – as well as short-term eviction relief, but Proposition 21, like Proposition 10 before it, runs the all-too-real risk of discouraging availability of affordable housing in our state.”
COVID Tenant Relief Act On August 31st, 2020 California Legislature and Governor Gavin Newsom passed the COVID Tenant Relief Act. This prohibits any landlord from evicting a resident for nonpayment of rent or other charges that were due between March 1st and August 31st, 2020 if the resident provides the landlord with a declaration proving that they have been financially affected by COVID and pays 25% of the rental payments between September 1, 2020, and January 31, 2021, that were missed. The Act also requires that a landlord give a 15-day notice before seeking to evict for any unpaid rent or other charges - this does not include Saturdays, Sundays, or public holidays. In addition, the Act extends the “just cause” protections that occur under AB1482.
Federal Eviction Moratorium
On September 1st, President Trump and his administration announced a federal eviction moratorium that is valid until the end of the year in an attempt to ensure that the housing crisis does not continue. The eviction moratorium will apply to those individuals who expect to earn $99,000 or less in 2020 and those who received a stimulus check this year or would have been eligible based on their 2020 income. For couples, it will apply to those who are filing jointly that expect to earn $198,000 or less. Renters that seek protection have to certify that they can’t pay their rent because of COIVD, that they are likely to become homeless if they are evicted, and that they made their best effort to obtain government assistance to make their rent payments. Renters will also have to certify that they are paying as much rent as they currently can. Once the moratorium expires, renters who were protected during this time will be expected to make up the missed payments to their landlords.
With so many potential changes on the horizon, we are happy to help answer any strategy questions to help insulate investors from any future volatility within their portfolios. Please do not hesitate to reach out to schedule a call or virtual meeting to discuss in more detail.