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Home · Property Management · COVID-19 · Landlord Writes to CA Governor: “A 10-Year Rent Deferment Bill is Outrageous”

buildingsJune 22, 2020,

Dear Governor Newsom,

I write to beseech you to reject Mr. Hertzberg’s outrageous proposal to require landlords to wait 10 years until all back rent has been repaid due to the Corona virus shut down.

The small housing providers in California are comprised primarily of family or individuals who depend upon the rental income for their livelihoods. Providing housing is like any other small business such as a nail shop or restaurant. We provide a product– an apartment unit–in exchange for payment of that product in the form of rent.

Like all small businesses, we have expenses: property taxes, mortgage payment, utilities, city ordinance fees (rent stabilization, code enforcement) maintenance, insurance and repairs-anticipated and unanticipated and legal fees.

Also, like small businesses, in order to stay in business and eke out a living, we must take in at least a little more than we pay out. For businesses, large and small, when a customer does not pay for their product, the business does not sell to them anymore and attempts to collect any lost amounts.

For landlords, when a tenant does not pay for their product (the apartment unit), the landlord is entitled to evict the tenant and rent to someone who will pay the rent and proceed in court to recover lost rent and costs to restore the unit to rentable condition.

Due to the Corona virus shutdown, half of all property owners were prohibited from collecting rent and from renting their unpaid for units to paying tenants. In fact, landlords lost more than other small businesses because we were forced to provide our product and services and incur debts without payment. No other small business we forced to stay in business and incur debts while prohibited from receiving any compensation.

Every other business was allowed to shut down and cut their losses. But landlords up and down the state were forced to take on mounting debt while prohibited from pursuing compensation. Even restaurants were allowed to shut down. The State didn’t force them to provide food for free.

And those business which were permitted to stay open were able to charge for their services and products. Only landlords were made indentured servants.

Now, on top of the losses already incurred and in addition to the months of lost rent we will still incur until the emergency orders are lifted, Mr. Hertzberg wants landlords to wait an additional 10 years for payment!

Who can sustain such losses before becoming homeless themselves? Does he want all landlords to lose not only their source of income but also the homes they live in?

Does Mr. Hertzberg want to devalue all residential real estate in California, too? Does he want to cause a loss of tax basis up and down the state as well?

Maybe what he ultimately wants is these two things:

1. To so deeply devalue the real estate that developers can swoop in and buy for cheap and he can get a nice big bonus under the table from those developers; and

2. To garner all the renters’ votes so that he will be reelected in his district.

That sounds like Bobby Axelrod the hedge fund manipulator and Chuck Rhodes the unscrupulous State Attorney of Showtime’s Billions all rolled up into one heartless politician.

I can only speak for my building from personal knowledge, but my tenants only stay a maximum of 5 years, if that, in one place. After an average of 3-5 years, they move to another city, they get a different job, they want to upgrade to a bigger place, they want to move in with a significant other and need another bedroom and countless other reasons. No tenant stays 10 years in the same apartment anymore.

So after the tenant leaves, Mr. Hertzberg proposes we get our rent back how?? Or does he just assume that we can continue living on negative income for 10 years– on the streets of course because we will already have lost our buildings and the places we ourselves once lived?

Perhaps he thinks we should also go on welfare for food and clothing?

Without launching into the unconstitutionality of government interference with contractual relations, the idea of making landlords wait 10 years for money owed is simply ludicrous! None of us are banks, nor did we sign up to be long-term creditors. They get 24% interest while every other landlord is now prohibited from increasing the rent more than 5%, if that. In Los Angeles it’s only 3% and not during the emergency orders!

First let Mr. Hertzberg go without his congressional pay for 10 years and then foist such a punishment on housing providers.

First obligate all other business to give away their products and services for free for 10 years. If that works, then he can come back to the landlords to make them do the same.

The economy is imploding and all Mr. Hertzberg can come up with is more deprivation?

Rather, since the shut down and loss of work came from the directive of the State, the State should make sure all tenants’ rent is paid so that landlords can continue to provide the maintenance, pay the insurance premiums, make the repairs pay the property taxes for all the tenants that we kept sheltered in place while the pandemic raged through the hospitals and we were locked in because there were not enough masks to keep us from spreading it in case we became infected.

Let the State pay the tenants’ rent with rent vouchers or other monetary currency so that everyone can stay put and the economy can finally recover.

Governor Newsom, you have many interests to balance as a result of this unprecedented pandemic. Please make it a priority to consider only those solutions that add to the economy, spur public private partnerships, encourage economic growth. Please reject out of hand those measures that will only inflict further harm to one group or another. That is not a balance, that is poor governance. Thus far, you have a much different reputation. Please do not sully it by bending to a 10 year deprivation plan.

Respectfully,

Linda Spiegel

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