California Democrats propose “21st century New Deal” to rescue landlords & renters

The two programs would spread out the economic impact of the coronavirus pandemic

Los Angeles /
May.May 12, 2020 10:00 AM
California State Capitol building (Credit: iStock)
California State Capitol building (Credit: iStock)

California state Democrats plan to reveal details of two long-term tax proposals this week — one to relieve renters and landlords squeezed by the coronavirus pandemic and another to raise money for a state-administered economic recovery fund.

The first proposal would ask landlords to forgive rent payments and provide them tax credits equal to the value of those payments, according to the Los Angeles Times.

The tax credits would be spread out for 10 years starting in 2024 and would be transferable, allowing landlords to sell them to investors to raise cash in the short-term.

Tenants would have 10 years to reimburse the state for those rental payments, but the state would forgive payments for some renters that prove financial hardship.

Most tenants across the state have paid their rents in full over the last two months, contrary to concerns voiced by many landlords they’d be out a significant chunk of income. Several landlords recently told The Real Deal that the relatively high rate of rent payments is likely a result of federal, state, and local rental assistance programs.

Some California groups, such as the AIDS Healthcare Foundation, have asked the state to suspend Costa-Hawkins, a state law that prevents most local governments from expanding rent regulations.

The other proposal would allow any taxpaying individual or entity to prepay 10 years’ worth of taxes in an exchange for a discount on those taxes. State lawmakers hope to raise $25 billion to fund other economic recovery efforts.

“It’s really a 21st-century New Deal,” state Sen. Bob Hertzberg (D-Van Nuys) said. “We’ve got to get money into the system.”

Both measures would in effect spread out the economic impact of the coronavirus pandemic over the next decade-and-a-half. Senate staffers estimate that they would reduce annual state revenues by about $3 billion from 2024-2033. [LAT]Dennis Lynch


Related Articles

arrow_forward_ios
(Unsplash via Philippe Gauthier)
LA’s homebuying frenzy boosts number of $1M homes
LA’s homebuying frenzy boosts number of $1M homes
Southern California’s housing market undoubtedly cooling (Getty)
SoCal home sale prices inch down…but they’re still high
SoCal home sale prices inch down…but they’re still high
A sign posted outside of a Los Angeles deli (Getty)
LA County will require vaccinations to enter bars, restaurants, businesses
LA County will require vaccinations to enter bars, restaurants, businesses
The second quarter was the third straight of rising asking rents (Unsplash / Christian Gabele)
Rents rise in Los Angeles as renters scoop up apartments
Rents rise in Los Angeles as renters scoop up apartments
As of early August, the state had distributed around $243 million in rental assistance (Getty)
LA’s rental assistance program relaunches as eviction moratorium ends
LA’s rental assistance program relaunches as eviction moratorium ends
(County of Los Angeles)
Project Roomkey almost certainly saved lives, but fell short of its initial goals
Project Roomkey almost certainly saved lives, but fell short of its initial goals
(Unsplash via Abbie Bernet)
SoCal home prices hit another record in July, but rate of increase slows
SoCal home prices hit another record in July, but rate of increase slows
Developer Geoff Palmer with one of his properties (Getty, G.H. Palmer Associates)
$100M moratorium: That’s how much Geoff Palmer’s firms say LA eviction ban has cost them
$100M moratorium: That’s how much Geoff Palmer’s firms say LA eviction ban has cost them
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...