The state would purchase unpaid rents and allow renters a decade, starting in 2024, to pay it back without interest, under the proposal by Senate President Pro Tem Toni Atkins, tthe Sacramento Bee reported. Landlords would receive a tax credit dependent on committing to not evict tenants.
“This is not a giveaway,” Democratic state Sen. Steven Bradford said, according to The Associated Press. “Our goal is to keep tenants houses and keep landlords out of foreclosure.”
More than 4 million Californians have filed for unemployment benefits since Democratic Gov. Gavin Newsom issued a stay-at-home order March 19, the AP reported, prompting state and local officials to seek ways to delay evictions.
Bradford said the proposal wouldn’t be for “large corporate landlords.” He added that renters could be forgiven the loan entirely if they continue to struggle financially.
Rent forgiveness is part of a larger $25 billion economic stimulus package introduced by Democrats this week.
California faces a projected $54 billion deficit for the next fiscal year as a June 15 deadline to pass a balanced budget approaches, according to the San Francisco Chronicle.
Gov. Gavin Newsom plans to reveal a revised budget Thursday that may include spending cuts and tax increases.
But state Republicans are already criticizing the plan.
“Smoke and mirrors has worked before, but it all comes home to roost,” state Sen. John Moorlach, R-Costa Mesa, told the AP.
Tom Bannon, CEO of the California Apartment Association, said the group is committed to working with the state Senate to make sure “tenants can stay in their homes and rental property owners – especially mom-and-pop owners – are able to continue to pay their bills and their employees.”
“During these unprecedented times, we appreciate the Senate pro tem’s creative effort to help tenants and rental property owners,” he added, according to the Bee.
Separately, Democrats are proposing mortgage relief for homeowners and suspending evictions for tenants.