State pitches $5.2B program to cover back rent

Proposal includes $600 stimulus checks, $2B for overdue utility bills

Los Angeles /
May.May 11, 2021 09:00 AM
Governor Gavin Newsom (Getty, iStock)
Governor Gavin Newsom (Getty, iStock)

California is proposing to get millions of tenants caught up on their rent with a $5.2 billion assistance program.

Gov. Gavin Newsom on Monday unveiled the plan to help qualified low-income individuals who are behind on rent. The benefits would cover 100 percent of back rent as well as some future payments.

The governor’s proposal also includes $2 billion for overdue utility bills.

“We recognize the acuity of stress associated with back rent and we recognize the acuity of stress as it relates to gas, electric and water bills,” Newsom said during a visit to a nonprofit in Fruitvale in Oakland. “We can keep people housed.”

The program would also send $600 checks to households earning less than $75,000 that did not receive an initial stimulus payment from the state last year. Newsom estimated that two-thirds of California residents would receive a payment. Families with children would get an extra $500.

In January, Newsom and legislative officials created a federally funded $2.6 billion rent-subsidy program and extended a statewide eviction moratorium through June.

Under the moratorium, tenants financially affected by the pandemic cannot be evicted if they pay at least 25 percent of their rent either monthly or in a lump sum by June 30. The January rent subsidy program did not cover back rent.

The state would pay for the new rent relief program from its $75.7 billion budget surplus — a staggering excess resulting from the stock market rally and greater tax revenue than expected.

The proposal requires approval from California’s legislature before the June 15 deadline to pass the state’s budget bill. Newsom was joined at his announcement by the heads of the Senate and Assembly budget committees, a sign that it will get the support it needs from the Democratically controlled legislature.

The state’s surplus comes as Newsom is facing a recall. Two real estate executives are running against Newsom: Equity Property Management’s John Cox and Doug Ose, a former member of Congress who founded Ose Properties in 1976.





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