Resources and Pending Legislation for Homelessness Prevention and Tenant/Homeowner Protections
August 6, 2020
CSAC has been monitoring measures intended to prevent homelessness and to protect renters from evictions and homeowners from foreclosures as a result of the COVID-19 pandemic, including current funding resources available for counties to help prevent homelessness.
The Legislature is currently considering several bills on these topics, while the Governor has taken action via executive orders to provide cities and counties with broader authority to preclude evictions during the public health crisis. Finally, the Judicial Council has also been involved in instituting emergency rules related to evictions and judicial foreclosures.
Below is a summary of the federal and state measures and actions CSAC has been tracking that are aimed at preventing homelessness, evictions, and foreclosures.
Resources to Help Avert Foreclosures/Evictions and Prevent Homelessness
- The budget allocated $550 million in federal funds (Coronavirus Relief Fund) to be administered by the Department of Housing and Community Development (HCD) to support housing for individuals and families who are experiencing homelessness or who are at risk of homelessness due to the COVID-19 pandemic. More specifically, these funds will be prioritized for counties, cities, and public entities to build off Project Roomkey through acquiring or rehabilitating motels, hotels, hostels, and other sites and assets as specified.
- $50 million from the General Fund to be administered by HCD to be used for the acquisition, conversion, rehabilitation, and operating subsidies for hotels, motels, and other properties to provide housing for individuals and families who are experiencing homelessness or who are at risk of homelessness. Our understanding is that these funds will be prioritized to support purchases made with the previously mentioned $550 million.
- $1.289 billion in funding for counties to help pay for the costs of responding to the COVID-19 pandemic, including both the direct costs of confronting the health effects and second-level economic effects. The funds were provided by Congress in the CARES Act through the Coronavirus Relief Fund and must be utilized in accordance with U.S. Department of Treasury guidance. These funds are flexible and could be used for rental or mortgage assistance for individuals whose jobs were directly impacted by COVID-19 or its economic impact. However, please note that funds cannot be used for assistance to owners to pay property taxes or to pay utility bills when the government is the utility provider. Funding to local governments is contingent upon compliance with the state’s stay-at-home order, Executive Orders, and Department of Public Health orders and guidance issued in response to the COVID-19 emergency. Local governments are required to certify compliance with the Department of Finance. Coronavirus Relief Fund Allocations for cities and counties are available here.
Homeless Housing Assistance and Prevention: The Budget also allocated $300 million from the General Fund to be allocated by the Homeless Coordinating and Financing Council consistent with the existing formula and uses of Homeless Housing Assistance Prevention program. This would result in $80 million directly to counties and $90 million passing through Continuums of Care. These funds have broad eligible uses, including but not limited to:
- Rapid rehousing, including rental subsidies and incentives to landlords, such as security deposits and holding fees;
- Operating subsidies in new and existing affordable or supportive housing units, emergency shelters, and navigation centers;
- Services coordination, which may include access to workforce, education, and training programs, or other services needed to promote housing stability in supportive housing; and
- Prevention and shelter diversion to permanent housing, including rental subsidies.
California Homeless Coordinating and Financing Council Guidance Document: The California Homeless Coordinating and Financing Council recently released a new guidance document on the use of state and federal resources to reduce homelessness during the COVID-19 pandemic.
- Since the beginning of the pandemic, numerous funding streams have been made available that can be utilized to address homelessness. The new guide is intended to help local governments and Continuums of Care in California understand the range of immediately available resources to address homelessness during COVID-19 and plan strategic ways to use these resources to effectively prevent and reduce homelessness. The document includes amounts available, eligible uses, recommended strategies, and important deadlines.
Tenant & Homeowner Protection Legislation
AB 828 (Ting) - Temporary moratorium on foreclosures and unlawful detainer actions: coronavirus (COVID-19). This bill prohibits a person from taking action to foreclose on a residential property while a state or locally declared state of emergency related to COVID-19 is in effect until 91 days after the emergency has ended. It requires a tax collector to suspend the sale, and not attempt to sell, tax-defaulted properties while a state or locally declared state of emergency related to COVID-19 is in effect and until 91 days after the state of emergency has ended. The bill provides that any action for foreclosure on a mortgage or deed of trust of residential real property is stayed and the court may take no action unless the court finds that the action is required to further public health and safety and would extend the period for exercising rights, including right of redemption, until 90 days after the state of emergency ends.
The bill authorizes a period of rent deferment of up to 12 months from 90 days after the state of emergency ends for a tenant who provides specified documents to their landlord showing economic hardship resulting from COVID-19, including a substantial reduction in income or substantial out-of-pocket medical expenses. The bill prohibits the imposition of late fees, fines, or interest during that time.
AB 828 was gutted and amended in the Senate and is pending a hearing in the Senate Judiciary Committee. It has not yet been heard in its current form.
AB 1436 (Chiu) – Tenancy: rental payment default: state of emergency: COVID-19. This bill prohibits a landlord from applying a security deposit to satisfy a financial obligation that accrued between the date a state of emergency relating to the COVID-19 pandemic was declared and either April 1, 2021, or 90 days after termination of the state of emergency, whichever is earlier, or applying a monthly rental payment for the satisfaction of an obligation other than the prospective month’s rent, unless the payment or security is specifically designated by the tenant for the obligation. The bill provides that a covered tenant, as defined, who failed to pay rent or any other financial or monetary obligation that accrued during the effective time period shall not be deemed in default and would prohibit any action for recovery of unpaid rent or other sum until 12 months after the effective time period.
The bill enacts the COVID-19 Tenant and Homeowner Relief Act of 2020, which with respect to residential mortgage loans, authorizes a borrower experiencing a financial hardship during the covered period to request forbearance from any mortgage obligation by submitting a request to the borrower’s mortgage servicer. The bill requires a mortgage servicer, upon placing a mortgage obligation in forbearance, to provide the borrower written notification of the forbearance terms, treatment of payments, and other options available to the borrower at the end of the forbearance period. The bill prohibits a mortgage servicer from assessing, accruing, or applying fees, penalties, or additional interest to the borrower’s account beyond specified scheduled or calculated amounts. The bill, with respect to multifamily mortgage loans, authorizes a borrower to submit a request for forbearance to the borrower’s mortgage servicers, affirming that the multifamily borrower is experiencing hardship during the COVID-19 emergency.
This bill was gutted and amended in the Senate and is set to be heard in the Senate Judiciary Committee on August 18. It has not yet been heard in its current form.
SB 1079 (Skinner) – Residential property: foreclosure. This bill requires a trustee, during the 20-day period before the date of sale, to receive offers from individuals who would be owner-occupants of the home and from a public entity that is utilizing public funds to purchase the property. The bill also prohibits a person from buying more than 3 properties in the same county on the same date pursuant to these procedures. It also prohibits a trustee from bundling properties for the purpose of sale, instead requiring each property to be bid on separately, unless the deed of trust or mortgage provides otherwise. The bill also increases fines for each day that the owner fails to maintain a vacant residential property to $10,000.
This bill is set to be heard in the Assembly Judiciary Committee on August 12.
SB 1410 (Caballero) - COVID-19 emergency: tenancies. This bill allows renters to receive immediate relief for unpaid rent by repaying past rents to the state over a 10-year period, without interest, beginning in 2024. The bill would incentivize landlords to provide rent relief and a commitment not to evict tenants in exchange for tax credits equal to the value of the lost rents, spread equally over tax years 2024 through 2033. Tax credits would be fully transferable, allowing the property owner to sell them to an outside investor and get cash immediately.
This bill is set to be heard in the Assembly Judiciary Committee on August 12.
Executive Orders Authorizing Local Eviction Protections
On June 30, Governor Newsom issued Executive Order N-71-20, which, among other provisions, extended the authority established under Executive Order N-28-20, to allow local governments to halt evictions for renters impacted by the COVID-19 pandemic through September 30. These specific provisions were previously extended under Executive Order N-66-20, which would have expired on July 28 had EO N-71-20 not been issued.
Governor Newsom issued Executive Order N-66-20 on May 29, which, in addition to extending local government authority to enact eviction protections, increased flexibility in the use of HUD Community Development Block Grant funds to address the impacts of COVID-19 in non-entitlement jurisdictions, and directed the Department of Housing and Community Development to streamline regulations for CARES Act Emergency Solutions Grant funding, among other provisions.
Please note that the Governor’s Executive Order N-37-20, which is related to evictions statewide, expired on May 31, 2020.
Judicial Council’s Emergency Rules
The Judicial Council instituted two emergency rules related to evictions and judicial foreclosures on April 6. The eviction rule prohibits the issuance of summons or entering of default judgments in unlawful detainer actions unless the case involves public health and safety issues, and provides that trials be set at least 60 days after a request for trial. The foreclosure rule stays all judicial foreclosure actions brought under Code of Civil Procedure section 725a et seq., tolls the statute of limitation for such actions, and extends all deadlines of electing or exercising any rights related to such action.
These two emergency rules were initially set to expire 90 days after the Governor lifts the COVID-19 state of emergency. While these emergency rules remain in effect, California Chief Justice Tani G. Cantil-Sakauye has emphasized the temporary nature of the emergency rules and stated that the Judicial Council intends to vote to terminate these rules, as it is more appropriate for permanent measures and solutions to be considered by the legislative and executive branches. If the Judicial Council votes to rescind the emergency rules, the effective date for rescission of the rules would be August 14.