TechEquity Supports San Jose’s Rent Freeze Proposal
San Jose is considering an emergency rent suspension in response to the coronavirus pandemic. The legislation would waive rent payments for San Jose tenants financially harmed by the pandemic. This means affected tenants would not have to pay rent in April, May, or June and would not have to pay back those months’ rent.
At TechEquity, we support this emergency measure. The economic toll of the pandemic could cause as many as 2.3 million Californians to lose their jobs. Under these circumstances forcing those who cannot pay rent due to the pandemic to leave their homes or accept a massive debt burden is unfair and would only further harm California’s economy. We are concerned about small landlords who rely on rental payments for their basic necessities but recognize that most financial institutions have already instituted forbearance programs to help small landlords navigate the crisis. We would also like to see the state and federal government provide additional assistance to these small landlords so the burden doesn’t fall squarely on their shoulders. In the meantime, we need to act to protect vulnerable tenants.
We have submitted a letter of support to the San Jose City Council which you can read below.
Dear Mayor Liccardo and Councilmembers,
On behalf of TechEquity Collaborative and our members, I am writing to urge the San José City Council to approve the emergency rent suspension proposed by Councilmembers Magdalena Carrasco and Raul Peralez.
TechEquity Collaborative is a membership organization representing thousands of tech workers in the Bay Area who believe the tech industry can and should contribute to broad-based growth that benefits everyone. We think that instead of being a force for displacement and inequality, tech can create opportunities and widespread prosperity. We are deeply concerned about the impact of the economic fallout from the COVID-19 pandemic on California’s most vulnerable residents.
Today, the Economic Policy Institute (EPI) updated their projections of job losses due to the economic decline caused by the pandemic. They estimate that 2.3 million Californians could lose their jobs by July. Under such a scenario, the unemployment rate in the state would reach 15.4%, which would be substantially higher than the peak unemployment rate during the Great Recession. In these economic conditions, many of San José’s renters will not be able to pay their rent. These tenants need urgent action to protect them from this economic disaster.
On March 27th, California Governor Gavin Newsom issued an executive order delaying eviction proceedings statewide for two months. The executive order was an important first step for protecting tenants from the economic decline, but it is not enough. When the eviction pause expires, tenants who could not pay their April and May rent because their income declined due to the coronavirus would be required to pay three months rent (April, May, and June) on June 1st. As the projections from EPI show, the economic crisis will still be raging in June making it very unlikely that those tenants will be able to afford a triple rent payment. Without action, San José renters who have lost their job due to the coronavirus response would be at severe risk of eviction.
Councilmembers Carrasco and Peralez’s legislation would waive April, May, and June rent payments for San José tenants who can no longer afford their rent due to income declines caused by the coronavirus. This proposal would keep at-risk tenants in their homes while the public health crisis continues and the economic crisis heightens. Burdening these tenants with debt from rent payments they cannot possibly afford is deeply unfair and economically counterproductive. Even if the economy begins to recover sooner than expected, tenants stuck with rent debt will not be able to afford their other expenses which would slow any nascent recovery. It is both just and pragmatic to waive these payments.
We also understand the concerns of property owners during this crisis. Many small landlords, including some elderly landlords, depend on rent payments for their own necessities. For this reason, we urge the federal and state government to take action to compensate these landlords. We recognize that such assistance is beyond the city’s capacity, but it is also not fair or wise to shift the economic burden onto small landlords. We are encouraged by existing actions to provide mortgage forbearance during the coronavirus crisis. Most of the major financial institutions have agreed to three months of mortgage forbearance for small landlords, and government-sponsored lenders Freddie Mac and Fannie Mae have agreed to halt foreclosures for landlords who stop evictions. These programs will allow landlords to weather the rent suspension proposed by the Councilmembers, but it will still be important to secure additional financial support when the mortgage payments resume. We urge the Mayor and Councilmembers to advocate for such assistance at the state and federal levels.
Survival during the coronavirus pandemic requires communal action. This cooperation must extend beyond public health measures and also protect our neighbors from economic harm. Councilmembers Carrasco and Peralez’s legislation would protect San José tenants both from eviction and an untenable debt burden. While additional action will be necessary to ensure that small landlords can also survive this crisis, we strongly support the San José rent pause proposal. We urge councilmembers to pass this emergency rent suspension.