Bailout needed in the form of rent and mortgage forgiveness

After the Great Recession of 2008, Congress enacted a federal stimulus package that bailed out the banking and auto industries. This time around, Angelenos and the American people need a bailout in the form of rent and mortgage forgiveness. 

Only an act of Congress can provide this level of stability as the COVID-19 pandemic eases and we eventually regain a sense of normalcy. Any post COVID-19 recovery will be hard enough without people having to worry about how they’ll make ends meet, stay housed and fulfill their financial obligations. Every level of government has a part to play. Los Angeles certainly cannot do it alone.  

Considering the enormity of the number of city residents now without any income, and an expectation that full income recovery will be slow, we need comprehensive protections that far exceed what our local jurisdiction can offer. As discussions in Washington ramp up in anticipation of the next COVID-19 relief bill, now is the time to press the U.S. House and Senate to approve a package that includes rent and mortgage forgiveness, or an equivalent in subsidies for unemployed or underemployed workers to help get us through this calamity. 

Some local and state emergency relief protections are in place. Earlier this month the state of California through a judicial action approved COVID-19 related protections that delay rent and mortgage payments through the summer. But full repayment will still be required. 

Los Angeles went even further by providing residents up to 12 months to repay their rent once the emergency order has been lifted. The city’s ordinance also waives all late fees, prohibits evictions for additional tenants and guests, and freezes rent increases on all units covered under our Rent Stabilization Ordinance. The law applies to all city residents regardless of immigration status. 

When it comes to eviction law in California, cities are preempted by the state. If a landlord so chooses, they can still file to evict a tenant based on a violation of a lease agreement, even during the emergency order. However, they cannot serve an unlawful detainer to remove a tenant until the state says so.

Adopting laws in conflict with the state or federal government would bring confusion and uncertainty without providing any solutions. At minimum, nothing would be enforceable. Violating state law would also make us liable for damages, potentially putting taxpayers on the hook for costly legal settlements. In other words we need to focus all our attention on the unprecedented tasks at hand through the lens of jurisdictional authority at the local, state and federal level.

Protecting the tens of thousands of multi-family property owners in Los Angeles is the other side of this equation. These landlords, many of them small business operators or individuals, depend on rental income to pay their mortgages, protecting them from defaulting on their loans. 

They often have additional loans and carry additional costs such as property taxes and insurance. Preventing foreclosures on rental properties means preventing renters from becoming displaced or homeless. 

What would post-pandemic success look like? Financial assistance to help pay rent, bills, mortgages and loans. In addition to staying healthy as the COVID-19 pandemic drags on, residents in Los Angeles need to stay housed, and property owners need comprehensive protections. 

We need to take the long view in creating a solid path forward that keeps everyone on a strong financial footing long after the state emergency declaration is lifted and the pandemic eases. The federal government must step in again while state and local governments do all they can.

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Mitch O’Farrell is a member of the Los Angeles City Council, representing the 13th District, councilmember.ofarrell@lacity.org. He wrote this commentary for CalMatters.