In summary

Two estimates portend dramatically different consequences if an eviction moratorium extension doesn’t pass

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At some point, California’s rent protection will end. The question among researchers is whether that will trigger a small wave of evictions or an eviction tsunami.

California legislators negotiating an extension of the state’s eviction moratorium have suddenly found themselves facing two very different estimates of the number of renters  at risk of losing their homes, and those estimates carry very different consequences. 

Late last year, the Federal Reserve Bank of Philadelphia and researchers at the University of California, Berkeley, produced different estimates of the number of Californians at risk of eviction at the end of an eviction moratorium (a date that’s still being worked out). The Fed estimated 240,000 households were at risk, while CalMatters worked with the Berkeley researchers using Census household surveys to develop a projection closer to 700,000 households.

But on Tuesday, the Fed revised their estimate down by several orders of magnitude, whittled to an estimated 90,000 households at risk. 

How’d they do it? By factoring in unemployment benefits and stimulus payments. 

The Fed’s original calculation applied the same formula across the country. And in California, when factoring in higher rents — and therefore less in household savings — the Fed analysis predicted even worse consequences here than states with lower housing costs. 

But when paired with the Legislative Analyst’s Office for a California-specific estimate, the $115 billion paid out in state unemployment significantly changed their results. 

“Due to the unprecedented steps to boost incomes and provide rental and mortgage relief, many households who otherwise would have faced an eviction (or fallen behind on their rent) or foreclosure (or fallen behind on the mortgage) have been able to avoid these destabilizing events,” the LAO concluded. 

That would mean a significantly smaller wave of evictions, fewer landlords on the hook for unpaid rent and fewer renters forced into dire financial straits or even bankruptcy. 

evictions

At least one California legislator directly involved with the negotiations to extend the eviction moratorium has his doubts about the Fed’s new, low estimate. 

“With all due respect to the [Legislative Analyst’s Office], their number is an outlier,” said Assemblymember David Chiu, who wrote the original eviction moratorium bill. “I hope they’re correct, but it is probably a bit higher.”

Carolina Reid, who led the Berkeley research, said the amount of back rent calculated by the LAO is “implausibly low.”

“It is really difficult to estimate the level of distress right now,” Reid said in an email, “but this estimate is well below the visible level of financial insecurity households are facing across the state, especially low-income renters and households of color.”

This article is part of the California Divide, a collaboration among newsrooms examining income inequality and economic survival in California.

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Nigel Duara

Nigel Duara joined CalMatters in 2020 as a Los Angeles-based reporter covering poverty and inequality issues for our California Divide collaboration. Previously, he served as a national and climate correspondent...