On May 12, Senate Democrats unveiled their proposal for the budget and California’s economic recovery. The budget approach aims to keep the budget balanced over a multi-year period through pragmatic spending decisions, use of reserves and other traditional solutions, and federal support. Senate Democrats also are proposing two specific recommendations that would aid California in rebounding from the deep economic impacts of the COVID-19 health crisis.
The first proposal would create a program enabling agreements between renters, landlords, and the state to resolve unpaid rents over a limited time period. The program would allow renters to receive immediate relief for unpaid rent and protection from eviction, and repay past rents, without interest, to the state over a 10-year period, beginning in 2024. Landlords would provide rent relief and commitment not to evict tenants in exchange for tax credits from the state equal to the value of the lost rents, spread equally over tax years 2024 through 2033.
CHC’s Executive Director, Ray Pearl, issued the following statement:
“California faced serious affordable housing challenges before the COVID-19 emergency, and this crisis has only exacerbated these issues, especially for the state’s most vulnerable households. We thank Senate Democrats for their leadership and for the creativity of their new proposal. It’s clear we all share the same goal: Maintaining housing stability requires significant new state assistance to lower-income households struggling to pay rent—while also ensuring California’s already limited supply of affordable housing can continue to operate during and after this crisis.”
CHC is continuing to push for a one-time state subsidy pool of $1 billion to help preserve affordable housing communities and keep stably housed more than 1 million low-income Californians through break-even operating assistance and rent accommodations or forgiveness to tenants who have a loss of income or an economic hardship related to COVID-19.
The second proposal would create a $25 billion Economic Recovery Fund through establishment of prepaid future tax vouchers from 2024 through 2033. The funds could be used to create jobs and provide a myriad of services and resources, from small business and worker assistance and retraining to wildfire prevention response and schools most harmed by campus closures.
Many details still remain to be developed on these proposals, the Governor’s May Revise will be released on Thursday, so much more to come over the next few weeks.