City Passes Temporary Moratorium on Residential & Commercial Evictions in Wake of COVID-19 Pandemic
The City of Emeryville took steps to provide relief to residents and businesses impacted by the COVID-19 pandemic and ongoing shelter-in-place order. They did so by enacting a Moratorium on Residential and Commercial Evictions through an urgency ordinance.
At a special meeting held on Thursday, Mar. 19, the five Emeryville City Councilmembers voted unanimously to suspend residential and commercial evictions effective immediately. The moratorium does not excuse renters from fulfilling their legal obligations to pay rent, but instead aims to provide temporary support for those impacted by the ongoing crisis. City Council also proposed a potential grant program for low-income renters to apply for monthly financial assistance.
“We are a very small city and it requires us at times to be extremely nimble,” said Councilmember John Bauters. “We would love the state to take more definitive action. I’m proud that we’re in a position to take action to protect Emeryville residents.”
While states like New York have taken action at the state level, California has instead enabled city and county governments to enact their own ordinances through an executive action. Thus far, San Francisco, Sacramento, San Jose, Los Angeles, Oakland and Berkeley have announced similar moratoriums on evictions.
The federal administration took executive action on Mar. 18 by declaring a moratorium on evictions of single-family homeowners with federally backed mortgages. This moratorium however does not apply to the vast majority of renters in the U.S., including an estimated two-thirds of Emeryville households.
Moratorium on Residential Evictions to Promote Housing Stability and Prevent Further Homelessness
To protect the estimated 7,710 renters in the city — renters comprise almost 66 percent of the population — the moratorium on residential evictions is intended to temporarily exempt residential tenants from eviction due to nonpayment of rent. City Council will also add an amendment to the ordinance preventing mortgage lenders from foreclosing on homeowners who fail to pay a homeowners associations assessment due to hardship incurred by the pandemic.
Penal Code 396(f) states that it is unlawful for landlords to evict tenants during a government-declared emergency, or for 30 days after the emergency. The memo states that local governments are typically constrained in adopting ordinances that regulate the eviction process or foreclosure. This changed on Mar. 16 when Gov. Gavin Newsom issued Executive Order N-28-20 which announced a state of emergency in California.
The order suspended state laws preventing local governments from using their authority to impose moratoriums on residential or commercial evictions due to a decrease in household or business income or out-of-pocket medical expenses; losses due to COVID-19 fall under this category. City Council considered a future provision restricting landlords from recording deficient payments with a credit agency during this period.
According to the City Council memo, landlords may serve a notice of termination, but if tenants notify landlords that they are being impacted by COVID-19, then a moratorium is declared on the eviction.
Balancing the Needs of Tenants and Property Owners
Kalimah Priforce, a renter in Emeryville and community leader advocating for tenant rights, commended City Council for making the right moves in passing the moratorium. “Our sister surrounding cities of Oakland and Berkeley have the reputation of being some of the most progressive cities in America,” said Priforce. “But these acts by Emeryville City Council show that Emeryville is future-forward and is protecting tenants who are experiencing hardships, BMR residents and families of low opportunity.”
According to the East Bay Rental Housing Association (EBRHA), a nonprofit supporting rental property owners, rental property providers are following state and local health officials’ directions and taking the necessary actions to keep renters safe and healthy. “We understand the financial constraints on renters as many mom and pop rental property owners also face mortgage payments, property taxes, maintenance costs, and utility bills,” said Taylor Hines, Chair of the EBRHA Government Policy Committee, in an email. “Small rental property owners rely on rental payments to provide the income that supports their rental properties and families. We encourage Emeryville and the state of California to pass policy that supports renters in distress but also addresses this severe economic situation with funds to help mom and pop rental housing providers and their residents impacted by this health crisis.”
Moratorium on Commercial Evictions to Protect Businesses With Less Than $7.5 Million in Gross Sales
In a similar vein, City Council voted to protect businesses with less than $7.5 million in gross receipts, following the Small Business Administration business practices. The moratorium would cover roughly 93 percent of licensed businesses in the city – about 1,276 businesses.
The commercial moratorium protects businesses who have closed and ensures others can keep their doors open. For “non-essential” businesses obeying shelter-in-place, the moratorium aims to provide “sufficient time to recover once they are able to re-open.” Landlords are allowed to request written documentation from tenants showing losses due to COVID-19 by way of reduced work hours, termination, paycheck stubs and bank statements.
About a dozen businesses have recently contacted City Councilmembers seeking financial assistance. According to Bauters, there are existing federal, state and local resources for small businesses to apply for loan assistance. City Council will discuss this further at a future meeting.
“I want to reassure the public that we are taking this very seriously,” said Mayor Christian Patz. “The big thing is that I encourage people to check the city website. We are putting up links for small businesses and members of the public being impacted.”
Small Business Hoping for Long Term Relief
Marilyn Boucher, co-owner of The Broken Rack Pool Hall/Bar & Grill, immediately closed her business in response the shelter-in-place order and was forced to layoff her entire staff of 26 employees. She advised them to apply for unemployment and directed them to the online resource.
The pool hall could not be operated while following the recommendations for social distancing and they do not offer food delivery, so there was little reason to remain open in any capacity. “We basically went to zero revenue right away,” she noted.
Boucher said a reprieve on her lease payments without fear of eviction would help in the interim, but these payments would continue to pile up and assistance in repaying them through grants or low interest loans when the ordinance ends would be necessary.
Boucher also notes that the rebate of business license fees and possibly new rebates of other city fees such as cabaret license fees could provide some additional minor relief to small businesses.
While appreciative of the anti-eviction ordinance, she noted the most significant way the city could help small, independent restaurants would be to reconsider pausing the minimum wage, which is scheduled to go up another 54 cents to $16.84/hr on July 1. She said she realized this would be a very tough action to take given that restaurant staff will have suffered from being on unemployment and without tips for an extended period “but this could be the difference between reopening or not for some.”
“Thinking Ahead”: Council proposes Emergency Rental Assistance Program and up to $3,000 monthly payments to qualifying households
City Council then discussed options for tenants to repay rent after the ordinance expires on May 31 (City Council has the option to extend the ordinance). “There is a potential eviction fiscal cliff across this state if cities don’t begin planning for what can happen after the governor’s current executive order expires,” said Bauters, who proposed a companion legislation that would require landlords to offer a 12-month repayment plan for tenants affected by COVID-19. “That is a small price to pay if you are a landlord to recoup your money and have the opportunity to get remuneration for lost rent, while also providing sanity and protection for the people who are impacted.”
Priforce expressed concern about the idea of keeping at-risk individuals indebted to their landlords. Priforce instead posed the question of how cities can shape their policies as if crises were always a constant and keeping their most vulnerable populations at the forefront of policies. “We don’t know the reverberations of how our economy will weather this storm we’re in,” said Priforce. “To add debt in the lives of those who have low opportunity is counter-progressive.”
An additional proposal would create an Emergency Rental Assistance Program to provide homelessness prevention funds to assist low-income and vulnerable renters. The program would allocate $400,000 from the city’s disaster relief fund to a nonprofit for the creation of a grant program. Tenants can submit an application showing a loss of household income due to COVID-19. The applicant’s household income must be at or below 100 percent of Alameda County’s area median income (AMI). Essentially, a four-person household with an annual income below $111,700 could qualify. “We’re targeting the people who need this most,” said Bauters. Tenants could receive up to $3,000 every month (prorated based on the percentage of applicants from a household) while the county remains in a declared emergency. The Council will be discussing the proposed grant program and smoothing out final details in either of the next two meetings.