Council Dictates 12-Month Rent Repayment Policy

The City Council voted narrowly Tuesday to extend the residential eviction moratorium to June 30, and established a baseline 12-month period requiring residential tenants to pay a quarter of their back rent every three months.
The extension, which evoked a largely divisive debate Tuesday, also allows tenants and landlords to strike an alternative agreement for rent repayment. Either way, the clock would start ticking on July 1, barring any further extension by the City Council.
Councilman Dan Brotman advanced this recommendation, with Mayor Vrej Agajanian and Councilman Ardy Kassakhian joining in agreement. Kassakhian helped Brotman craft the motion with prior suggestions of spreading out repayments to ensure tenants don’t find themselves owing a lump sum at the end of the line.
“That way at least someone is showing something of good faith,” Kassakhian said. “I think a lot of these landlords want to keep their tenants and a lot of tenants want to stay with their landlords, but instead right now, they’re all pitted against each other.”
Brotman’s motion was a substitute motion to Councilwoman Paula Devine’s initial proposal to extend the moratorium to June 30, and to levy a flat six month period for tenants to pay up. This way, she reasoned, there was a cleaner slate for parties to eke out agreements.
“I just think if we keep it simple, it will allow a payback to occur,” she said. “It may be in six months. It may be longer. It depends on the landlord. They could negotiate longer.”
Debate Tuesday was largely centered on repayment periods, as state courts are presently barred from taking up any eviction notices from landlords on account of the pandemic. Unfortunately, for the City Council, this leaves them threading the needle to not overly foist financial burden on residential tenants or the owners of rental properties.
“That brings a real hardship on landlords that have to pay mortgages,” Devine added. “They don’t all own their properties. They have mortgages on their properties. They pay taxes and utilities. It’s been said over and over again.”
Kassakhian argued for a more equitable solution, noting the volatility of expecting renters who can’t work during the pandemic — and may struggle to find work after — to find a way to cough up back-rent within six months.
“We need to have a practical equitable approach as to how we move forward,” he said. “You say six months, but what happens in six months? If we’re asking people to pay all of their back rent in six months, that’s catastrophic as well. Explain to me how, if someone has $2,000-a -month rent and hasn’t been able to work because we’ve told them they can’t leave their house and can’t work, but now you have to pay that in six months. Explain to me the math, how someone who’s out of work is going to pay that. Who do they go to? How do they do that?”
Councilman Ara Najarian, who earlier advocated for equitable solutions, shot back, claiming that a longer repayment period sharply jeopardizes property owners.
“What’s a landlord going to do because he loses his building because he can’t pay his mortgage? How is that fair?” he asked.
Brotman cited growing unemployment figures to bolster his case for a more protracted repayment period.
“Our true unemployment rate is about 20%,” he said. “That’s as bad as it was in the depth of the Great Depression. If you look, as a class, renters are obviously hurting more than landlords. They’re lower income. They don’t have savings. They don’t have property. If you just took them as a bloc, they’re in a much direr situation than landlords.”
Depending on how Sacramento responds, the debate may end up being moot. According to CalMatters, a nonprofit publication that analyzes policy, state senators are debating a bill that would have the state directly collect rent from tenants affected by the pandemic throughout a 10-year period, in exchange for granting tax credits of equivalent value to the applicable property owners.
Relatedly, the City Council could not agree on long-term criteria for a repayment period for commercial renters; it instead extended their eviction moratorium through June 3, with an exemption for publicly-traded companies, with the intention of cementing an answer at the June 2 meeting. Najarian voted against this, in the interest of hammering out a solution Tuesday night.
On extending the requirement of face coverings when outdoors through June 3, Brotman cast a dissenting vote on the basis of wanting to grant certain exemptions.
The City Council did come to some unanimous agreements. The freeze on rent increases has been extended through June 30, as has the continuing closure of sporting courts.

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