Assembly Judiciary Committee passes bill on evictions and foreclosures, but it will be amended

For months, California Chief Justice Tani Cantil-Sakauye has urged the Legislature to pass its own pandemic eviction and foreclosure policies. An Assembly Judiciary Committee hearing on Wednesday showed why that task is so difficult.

SB 1410 seeks to create a process to help replace two emergency rules put in place by the Judicial Council in April blocking unlawful detainer and foreclosure cases. Cantil-Sakauye announced on Tuesday the council would vote this week on whether to phase out these protections on Sept. 1.

The measure billed in a committee analysis as "the state Senate's proposed response to the looming risk of mass evictions statewide" ultimately passed the Assembly committee after catching flak from the right and the left. Low income housing groups are split on the bill, with many opposing it outright. Several groups representing landlords are cautiously supportive.

SB 1410 seeks to provide protections for renters and well as landlords. It would permit owners and tenants to enter into "COVID-19 eviction relief agreements" administered by the state. Tenants could defer rent during the current state of emergency and repay it over a 10-year period. Landlords could receive state-backed tax credits in return, and could evict tenants who decline to enter into such agreements.

The bill's coauthor, Sen. Anna Caballero, D-Salinas, began her presentation by detailing the economic destruction caused by the virus and the resulting economic shutdown. This includes an unemployment rate that hit 16.3%, higher than the 12.3% peak during the great recession, with 7.5 million Californians filing jobless claims.

"While recent economic numbers have shown a modest improvement, there's no true end in sight," Caballero said.

She added, "The numbers are staggering."

She went on to cite a study released by the Public Policy Institute of California in January, prior to the pandemic, showing more than half of Californians paid 30% or more of their income each month for housing. After the economic shutdowns were ordered by state and local governments, 24% of tenants could not pay their rent, rising to 30% in June, she said.

One common objection to the bill is its complexity. The committee analysis noted the bill doesn't prevent landlords from suing tenants for back rent during the state of emergency, suggesting some might try to intimidate nonpaying tenants into leaving. It also noted tax credits wouldn't be applicable until 2024, far too late to help many "small and undercapitalized" landlords.

The analysis also showed the state could end up managing a $12.3 billion tax credit fund for a decade or more. Sen. Jay Obernolte, R-Big Bear Lake, said it would be very difficult to predict how many renters and landlords would take advantage, making longterm budget planning for the program nearly impossible.

Several members noted that providing direct relief to renters would likely be more effective and far easier to administer -- something Caballero acknowledged.

"The problem is we don't have the money," she said, citing this year's scaled-down state budget.

SB 1410 made it through the committee on a 6-3 party line vote. It now heads to the powerful Assembly Appropriations Committee, chaired by the one Democrat on the Judiciary Committee who abstained, Assemblywoman Lorena Gonzalez, D-San Diego.

Gonzalez objected to a lack of protections in the bill for renters who are in the United State illegally. This is because relief would be provided only to renters who could show a Social Security number or taxpayer identification number. During the hearing Gonzalez said she wanted the bill to survive for now but would be seeking changes.

Reached after the hearing, Caballero's office indicated amendments are likely and noting the legislators were well aware Sept. 1 is approaching fast. One potential change is adding an urgency clause. This would allow the bill to go into effect immediately after being signed, rather than waiting until Jan. 1.

But this would also mean the bill would need a two-thirds vote in both houses. That would require it to either pick up bipartisan support or secure the vote of nearly every Democrat in the Legislature.