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Bill could lead to some rents lowered 25 percent

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Posted at 4:45 PM, Apr 24, 2020
and last updated 2020-04-24 19:45:53-04

A bill in Sacramento could lead to some landlords being ordered to lower rents by 25 percent for an entire year.

The clause is a part of Assembly Bill 828, which places a moratorium on evictions and foreclosures amid the Coronavirus state of emergency.

Assemblyman Phil Ting, a Democrat from San Francisco who authored the legislation, said the goal is to keep people in their homes.

The 25 percent rental reduction would be part of eviction court proceedings. For a tenant who suffered a financial loss amid the Coronavirus outbreak, the bill says a court shall order his or her rent to be reduced 25 percent for 12 months. The tenant, however, would be required to pay the past due rent back in 10 percent installments during that time.

The stipulation would apply to landlords who own 10 or more units.

"We have a goal," Ting said. "We don't anybody out on the street, and we don't want landlords losing their property."

The bill does not require tenants to document their Coronavirus-related hardship, but says if the hardship was within March 4, 2020 to March 4, 2021, the court will consider it related.

Landlords groups are already pushing back against the bill.

Todd Henderson, whose family rents out 94 units in San Diego, said the bill is a one-sided attempt to solve an issue. Henderson said he is working productively with tenants who are unable to pay their rent amid the crisis. Henderson said even with the payment plan, he would never expect to be made whole.

"We want to work with residents, and having the government jam this thing down our throats just doesn't taste good," said Henderson, on the board of the Southern California Rental Housing Association.

The bill applies the 25 percent rule to landlords with 10 or more units because it presumes losing that income would not cause financial hardship. Henderson said that is absolutely not the case because his costs are not decreasing at the same time.

Landlords with one or two units would be exempt, whereas it is up to a judge to determine whether it should apply to an owner of three to nine units.

Ting said he is open to feedback on the bill as it moves through the legislative process. Legislation is currently on hold through at least May 4.

A spokeswoman for Ting said language would be added to the bill so that a landlord's financial situation is considered.