Editorial: California’s plan to ‘cancel rent’ could miss too many low-income tenants

California is about to cancel rent for millions of low-income tenants throughout the state. But it may not go far enough.

Under a plan released Monday and likely to be approved by legislators as soon as today, California will roll out an unprecedented rent relief program. Funded with $2.6 billion in federal COVID aid, qualified low-income households could get up to a year’s worth of rent debt forgiven.

This would be a welcome reprieve for low-income families who have lost wages during the pandemic and have struggled to pay the rent. It would also be a huge help for landlords, especially small-scale mom-and-pop operators who haven’t been collecting the monthly rent checks they rely upon to pay utilities, taxes and other expenses. The program would pay landlords 80% of the total rent debt accrued between April 2020 and March 2021 if they agreed to forgive the remaining 20% and not pursue evictions.

Federal and state action on this issue is crucial. The surge in layoffs and lingering economic damage inflicted by the pandemic has caused Californians to build up a staggering amount of rent debt, threatening a tidal wave of evictions once existing protections expire.

And yet, for all the good that the relief would do, the plan worked out by Gov. Gavin Newsom, Assembly Speaker Anthony Rendon (D-Lakewood) and Senate President Pro Tem Toni Atkins (D-San Diego) has loopholes that could exclude some struggling tenants from receiving the full benefit of the program, through no fault of their own.

That’s because the program would allow landlords to decline the rent relief, which would deny their tenants rent forgiveness.

Under the bill, tenants could apply for assistance if their landlords refused the subsidy. The program would pay 25% of their rent debt, which is enough to ensure tenants wouldn’t be evicted under the state’s renter protection law. However, tenants would still be responsible for paying the remaining 75%, and their landlords could still sue them to demand payment.

The emergency legislation says that if a landlord takes a tenant to court over rent debt, the court may reduce the amount owed if the landlord refused to accept rent relief. However, tenant advocates warn that language is simply too weak to guarantee tenants will get their debt eliminated or reduced to an affordable level. And, besides, it’s stressful, intimidating and unfair that some tenants would have to fight in court for rent relief when Congress allocated billions of dollars in pandemic aid to do just that.

So why should landlords get to pick and choose which tenants will benefit? The governor’s office and legislative leaders argue they cannot legally force property owners to take rent relief. Instead, working within the federal rules, they tried to create a program that would be so appealing that most landlords would take it. It’s true: Getting 80% of rent owed is pretty good compared to what landlords would likely collect if their tenants were evicted.

But some property owners will reject the proposed subsidy and some tenants will fall through the cracks. Housing advocates warn that the landlords most likely to decline the relief are those who want to get rid of particular tenants — maybe they have longtime occupants paying below-market rents or they have property in a gentrifying neighborhood. They fear the power imbalance of the program would have disproportionate impact on low-income, Black and Latino households.

Why not pay landlords 100% of the rent they are owed and eliminate tenants’ debt? State leaders worried that such a generous program would quickly deplete the federal funding. That’s a legitimate concern. Nobody knows how much California tenants owe. Estimates range from $400 million to $3.6 billion, the latter being much more than the state received from the federal government. So far, the governor’s office has been reluctant to dip into the state surplus to help tenants, despite lawmakers’ call for $5 billion in rental assistance.

Lawmakers should pass the emergency legislation because renters need relief now. The state’s eviction moratorium is set to expire Sunday; the bill would extend it to June 30. But legislators and Newsom ought to spend the coming weeks and months finding ways to ensure that needy tenants aren’t unfairly excluded from pandemic relief.