Newsom Proposes $5.2B To Pay Off Unpaid Rent In CA

CALIFORNIA — Gov. Gavin Newsom has proposed $5.2 billion in federal pandemic relief dollars to cover 100 percent of rental debt low-income Californians racked up during the pandemic.

The ambitious proposal, if approved, would become the largest rent payment program in the country.

An estimated 758,000 households in California are behind on rent and have racked up an estimated $4,542,200,000 or $4,700 in estimated rent debt per household, according to a recent analysis by the National Equity Atlas.

As the fiscal year comes to a close, the Legislature will meet to review the governor's plan, along with a slew of other proposals tied to both $27 billion in federal relief and the state's estimated $260 billion operating budget, padded by an unexpected surplus.

"We are trying to do things this state has talked about but never been able to accomplish because we've never had the resources to do it," Newsom said in mid-May. "This is not a budget that plays small ball."

Newsom, who's facing a gubernatorial recall election, has announced a cascade of spending in the past several months — and much of it will is directed at helping voters who were the hardest hit by the pandemic.

"Nationwide this is certainly the largest rent relief there’s ever been," Russ Heimerich, a spokesman for the California Business, Consumer Services and Housing Agency, told the New York Times. "The big question is can we spend it all."

Separate from the federally funded rent relief proposal, Newsom also launched a plan to offer landlords an incentive to forgive a large sum of back rent owed: Landlords could be paid up to 80 percent of their tenants' missed rent through March 2021 if the remaining 20 percent balance is forgiven and property owners agree not to pursue evictions.

In addition to that, the state has been gradually doling out some $2.6 million in rental assistance in a plan proposed by Newsom and approved by the Legislature in January.

But that money, as well as the proposed $5.2 billion, will take some time to disperse, and it's unlikely to reach all who need it by June 30, when the state eviction moratorium expires.

Just $32 million has been paid out of the $490 million in applications for rental assistance through May 31, according to a report from the California Department of Housing and Community Development. And that doesn't include the 12 cities and 10 counties that run their own rental assistance programs.

"The expectation for people to be up and at 'em and ready to pay rent on July 1 is wholeheartedly unfair," Kelli Lloyd told the Associated Press. She's a 43-year-old single mother who says she has not worked consistently since the pandemic began in March 2020.

SEE ALSO: CA To Consider Extending Its Eviction Moratorium

The governor has also proposed $2 billion to pay for outstanding water and electricity bills as part of a historic $100 billion "California Comeback Plan," also made possible by a record surplus.

The governor fired off a buffet of proposals to voters in May — $12 billion to fight homelessness; state stimulus checks up to $1,100 for millions of low and middle-income Californians; $2.7 billion to pay for all of the state's 4-year-olds to go to kindergarten for free; and hundreds of millions to help small businesses recover from the economic downturn.

He said that the new funding would be "generational and transformational" for Californians.

"This pandemic has not impacted all of you equally," Newsom in a speech last month to the California Chamber of Commerce. "I'm very mindful that it's impacted, disproportionately, women."

The first-term governor is announcing spending left and right between gargantuan proposals and millions of dollars in vaccine incentives. As the race to unseat him draws near, some have said this is an attempt to circumnavigate his way back to higher approval ratings.

And according to Tim Rosales, a veteran GOP strategist, it might just work.

With conditions in the state improving "it's harder and harder to maintain that level of ... anger" during the worst days of the pandemic, he said, adding that Newsom is "on the right trajectory in terms of his approval ratings."