As of December 2020, almost 1.9 million California tenants were behind on their rent, owing upwards of $1.67 billion to their landlords. Eviction cases in the state are projected to double over the next year. The individuals and families who are most at risk of mass displacement and crushing debt come from low-income, Black and Latinx communities.
The threat of this looming eviction and debt crisis is not new. Tenants, activists, and lawyers have been warning lawmakers since the early months of the COVID-19 pandemic that tenants falling more and more behind on rent after losing their jobs or suffering other economic hardships will likely never be able to pay these debts. Many tenants will either lose their homes, suffer the numerous burdens of debt, or both.
Yet California’s response has been to ignore these warnings and instead implement temporary, limited eviction bans that merely delay, rather than meaningfully address this impending harm. Even more concerning, the state’s recent attempt to provide a more comprehensive solution is not much better; its central feature is a completely voluntary rent relief program that places tenants’ fates in the hands of their landlords.
These insufficient measures underscore why rent cancellation is the only policy solution that will prevent the mass displacement of California renters and the increased economic marginalization of California’s most vulnerable communities.
Eviction moratoriums have only provided band-aid solutions
California’s strategy relying on eviction moratoriums to address the pandemic housing crisis was flawed and misleading from the start. Governor Gavin Newsom’s initial executive order purported to stop evictions, but in reality it just delayed eviction proceedings for a limited number of tenants, leaving localities to implement their own more comprehensive solutions. Much to the disappointment and frustration of tenants’ rights activists, Newsom’s order engendered a patchwork of confusing and uneven protections across the state.
Most importantly, despite the governor’s moratorium and similar temporary emergency eviction ban from the California Judicial Council rule, evictions continued. Tenants, activists, and legal aid lawyers reported that illegal evictions and tenant harassment were still happening. Furthermore, they emphasized that banning evictions did nothing to address the worsening problem of rental debt accumulation, the ever-growing threat of a “tsunami of evictions that would do tremendous harm to millions of people.”
Instead of adopting the policies backed by those on the ground, however, the state gave tenants another half measure––one that still only protected certain tenants, required already economically struggling people to make partial rent payments, and did not include any of the rent forgiveness advocates pushed for. This scheme of partial, even more confusing protections persisted through January 2021, earning California one of the lowest ratings from the Princeton Eviction Lab’s COVID-19 Housing Policy Scorecard.
California’s new rent relief plan still falls short
In an effort to move beyond moratoriums and address rental debt, federal and state policymakers are now considering rent relief programs that would make payments to landlords on behalf of tenants. For example, Minnesota Representative Ilhan Omar’s Rent and Mortgage Cancellation Act would suspend payments for tenants and allow landlords to recoup rent directly from the federal government.
Such relief programs are better than continuing to kick the can down the road with eviction moratoriums. Those who support them also emphasize that rent relief, rather than cancellation is desirable because it protects both tenants and landlords. But Tracy Rosenthal from the L.A. Tenants Union argues that these “market-based relief programs” are flawed because they tend to favor landlords in several ways. First, they often put the burden on tenants to apply, ignoring a whole host of barriers––such as a lack of time and resources to understand and successfully navigate the often complex bureaucratic processes involved––that make it difficult for low-income and vulnerable populations to apply successfully. In addition, they are often means-tested and exclude tenants who don’t qualify, such as undocumented individuals or those working in the gig and informal economies. And importantly, relief funds are not infinite—they will eventually run out, leaving tenants without relief.
California’s latest measure, which will add direct federal relief to landlords to its existing scheme, is an unfortunately perfect example of the way relief programs favor landlords over tenants. The state would use $2.6 million in federal aid to pay landlords back 80 percent of unpaid rent from April 2020 to March 2021, if those landlords agree to forgive the remaining 20 percent and agree not to evict their tenants. If a landlord refuses to participate, the program would pay the landlord 25 percent of unpaid rent, enough for their tenants to remain eligible for protections under the existing moratorium. Tenants’ rights organizations, who claim they were left out of the dealmaking on the plan, rightly point out that the voluntary program gives too much power to landlords over their tenants’ futures; organizers believe many landlords will choose to forego the deal and take their tenants to court instead, to both evict them and collect the total rent owed. Furthermore, the plan does not include any of the additional anti-harassment protections tenant organizations pushed for, and activists again criticize the measure as being riddled with loopholes that landlords can exploit.
Finally, by making tenant debt relief dependent on reimbursements to landlords, California’s plan and similar rent relief programs falsely presume that both groups are equally deserving of similar relief. These two groups are not equal: most landlords do not rely on their rental income to support their basic needs, while more tenants rely on their stable, safe housing to survive. In other words, keeping tenants in their homes is necessary to preserve their human rights; preserving landlord wealth does not implicate the same values and priorities. Thus, while rent relief programs may ultimately protect some tenants, it is problematic for any program to condition critical, lifesaving relief for tenants on the preservation of landlords’ investment income. Even plans like Omar’s, which at least prioritize relief for “small” landlords, would still largely benefit corporate landlords. California’s plan, meanwhile, seems to place no limitation on the types of landlords that are eligible for relief.
By contrast, a comprehensive rent cancellation program would explicitly prioritize people over profit. Cancelling rental debt would ensure not only that tenants can stay in their homes, but that they will also be free of the compounding harms of the rental debt they have accumulated, and will continue to accumulate while the pandemic and the economic downturn it has caused continue. Furthermore, by pairing rent cancellation with mortgage cancellation and targeted relief for certain landlords, the state can protect the nonprofits, cooperatives, and smaller landlords that do rely on rental income for their everyday survival, rather than indiscriminately reimbursing larger private landlords and corporations that can afford to weather the economic storm. As Rosenthal from the L.A. Tenants’ Union put it, “tenants don’t need a bailout. They need a jubilee.”
The road to rent cancellation
A battle over rent cancellation early on in the pandemic illustrates the main arguments over its constitutionality. Back in April, lawyers from the Law Foundation of Silicon Valley and other public interest organizations urged San José to adopt a proposed 90-day rent suspension. They argued that local governments have “extraordinary power to preserve the life, health, safety, and wellbeing of their people” under the California Constitution. The California Supreme Court has ruled that this police power applies to real property, and restrictions or regulations under it are constitutionally valid as long as they are reasonably related to a legitimate government purpose. Furthermore, these powers are heightened in an emergency. Thus, advocates argued, the city could and should use these emergency powers to suspend rent in order to provide immediate relief to tenants and prevent the long-term displacement and financial hardship of accumulated debt.
But the San José City Attorney disagreed and advised the city that rent suspension would violate state and federal law. The city argued that forcing landlords to house people without the government providing the requisite just compensation would violate the Takings Clause, leaving the city on the hook to foot the bill. It also argued that rent suspension would allegedly violate the Contracts Clause, which prohibits the governments from interfering with agreements between private parties.
San José lawmakers ultimately abandoned the rent suspension proposal. But the constitutionality of rent cancellation is certainly not settled––the issue would be a novel one for California courts. There is still a strong case to be made for cancelling rent as a valid exercise of a government’s emergency powers, especially during a crisis of such unprecedented scale as the coronavirus. In the 1970s, when California communities were beginning to enact rent control measures to respond to a burgeoning housing crisis, many saw it as a constitutional overreach placing an unreasonable burden on landlords. But now rent control has been implemented, at least in some form, across the state, and is widely regarded as a constitutionally valid limitation on individual property rights by a state or city to promote the general welfare of its citizens.
Underlying the legal debate over rent cancellation are normative values and concerns held closely by those in power that make rent cancellation such a controversial strategy: American capitalism’s exaltation of individual property rights and its simultaneous abhorrence of wealth redistribution. The idea that keeping tenants housed can and should happen at the expense of even just a portion of certain landlords’ property interests clearly implicates these values.
If debt cancellation is a form of wealth redistribution, then it is one that California’s past more conservative solutions prove is necessary to meaningfully lessen the devastating impact of the pandemic on renters, especially on communities of color that already suffer disproportionate social and economic injustice. Furthermore, it is entirely just to redistribute wealth to these vulnerable tenants from the corporations that have exploited them and unfairly benefitted in our inequitable housing system––and that stand to benefit even more from the increasingly distressed housing market. And finally, cancelling rent is not only the best solution to address the pandemic housing crisis, but also to work toward the larger goal of “decommodifying housing” overall, which is essential to solving the housing crisis at-large.
California lawmakers must listen to the tenants and housing justice activists on the front lines of this crisis, and #CancelRent.
Kacey Read: California Law Review Symposium Editor, Berkeley Law 2021
Kacey Read, Eviction Tidal Wave: California’s Failure to Adequately Protect Tenants & Why We Need to Cancel Rent Now, Calif. L. Rev. Online (Feb. 2021), https://www.californialawreview.org/eviction-tidal-wave.