California Moves to Limit Business, Residential Evictions During Coronavirus Pandemic

Governor's Order Authorizes Cities to Halt Evictions of Renters, Homeowners Through May

By Randyl Drummer CoStar News

March 17, 2020 | 04:39 P.M.


California Gov. Gavin Newsom issued an executive order authorizing local governments to halt evictions for residential renters, homeowners and commercial tenants during the coronavirus crisis.


Newsom’s order, which stops short of imposing a statewide moratorium, expands on actions by Los Angeles, San Francisco, San Jose and other cities as well as emergency statewide measures introduced recently by San Francisco Assemblyman Phil Ting, state Sen. Scott Wiener of San Francisco and state Sen. Lena Gonzalez of Long Beach, which prevent evictions of people and businesses affected by the new virus, known as COVID-19.


“People shouldn’t lose or be forced out of their home because of the spread of COVID-19,” Newsom said in a statement, adding that the order is expected to be in effect through May 31 2020 and does not relieve tenants from their obligation to pay rent or restrict their landlord’s ability to recover rent. “Over the next few weeks, everyone will have to make sacrifices, but a place to live shouldn’t be one of them."


The pandemic in California increased to 589 confirmed cases and 11 deaths by midday Tuesday, according to the Johns Hopkins University Center for Systems Science and Engineering. It is exacting a toll on the economies of both the Golden State and the nation.


California is expected to fare slightly worse than the United States as a whole in an economic downturn that is projected to reduce the state's employment base by an annual rate of 2.6% over the next six months, with more than one-third of the lost jobs in the leisure and hospitality and transportation and warehousing sectors as a result of the spreading pandemic, according to the UCLA Anderson Report.


“So many small businesses are losing most or all of their revenue,” Wiener said in another statement. “It would be extremely damaging to our communities to have permanent mass closures of small neighborhood retail, restaurant, and nightlife businesses.”


Newsom's order, which also urges banks to suspend foreclosures and asks utilities to maintain service, is the state's effort attempt to help residents who are coping with the pandemic in the nation's most populous state and world's fifth-largest economy, which has some of the nation’s highest housing prices and levels of homelessness exacerbated by a shortage of affordable housing.


The United States has entered a recession, ending more than a decade of economic expansion, because of reduced projections for first-quarter growth related to the pandemic, UCLA Anderson said this week in publishing a revision to its forecast between quarters for the first time in the report's 68-year history.


The California Apartment Association, the state’s largest multifamily lobbying group that opposes efforts to expand rent control and eviction protection, said in a statement that it agrees with Newsom's executive order suspending evictions for non-payment of rent as long as it's temporary and protects landlords who may be facing their own challenges during the crisis.


"Renters facing financial turmoil because of coronavirus should not have to worry about keeping a roof over their heads,” the association statement reads, noting that the order calls for rent payments to be delayed, not waived. “Owners, especially moms and pops, may be unable to pay their mortgage or other bills. That’s especially true if they come down with the virus and can’t go to work themselves."


San Jose officials are enacting a moratorium of at least 30 days on evictions against residents who can show that pandemic-related loss of income prevents them from paying rent. San Francisco and Los Angeles announced similar measures and the Oakland City Council is asking the Alameda County Superior Court to halt ongoing eviction cases and refrain from taking new eviction cases.


Days after issuing an eviction moratorium for all residential tenants, San Francisco Mayor London Breed said the city would halt all commercial evictions for small and medium-size businesses struggling to stay afloat amid the coronavirus pandemic. Under normal state law, cities are barred from regulating commercial evictions.


In San Francisco, the moratorium will remain in effect for 30 days with the possibility for a 30-day extension. Eligible businesses will have a license to operate in the city and generate less than $25 million in annual gross revenue.


“The steps we have taken to protect public health are absolutely necessary, but we know that they are having a huge impact on our workers and our businesses,” Breed said in a statement. “Now that the governor has waived laws allowing us to prevent commercial evictions, we are taking action to make sure that our small businesses are not displaced as a result of the economic impact caused by coronavirus. We will continue to push for more immediate state and federal support in addition to the programs we’ve introduced locally, because this pandemic is having major widespread economic impacts on almost every business and resident in our city.”


The commercial eviction moratorium is the latest step San Francisco officials have made in an effort to soften the economic blow dealt by the coronavirus’ astounding spread. The city has also approved plans to defer business taxes and licensing fees, has established a relief fund for impacted businesses and created a $10 million program to provide paid sick leave to up to 25,000 San Francisco private-sector employees.


San Francisco Bay Area counties issued a "shelter in place" directive requiring more than 6.7 million people throughout San Francisco, San Mateo, Alameda, Santa Clara, Marin and Contra Costa counties to stay in their homes and away from any non-essential business as much as possible for the next three weeks.


Newsom this week also urged all restaurants to close except for takeout service and movie theaters and gyms across California to shut down temporarily. Last weekend, Newsom said all bars and nightclubs statewide should close, restaurants should limit their occupancy and Californians over age 65 should voluntarily self-isolate at home.


The state Legislature passed up to $1 billion in emergency funding to expand capacity and add beds in California hospitals and other health care facilities, and buy hotels and motels to shelter homeless and sick people on Monday before adjourning at the state Capitol in Sacramento until April 13,


CoStar reporter Katie Burke contributed to this story.


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