The San Diego City Council voted unanimously Wednesday to place a temporary moratorium on evictions of residents and small businesses that cannot make rent payments amid the coronavirus pandemic.
The council also established a Small Business Relief Fund to support local businesses affected by the COVID-19 crisis. The relief fund will be created by repurposing nearly $4 million in existing grant funding.
“I want to thank my council colleagues and the mayor for standing with me and making sure no one loses their home in the middle of a public health emergency and growing economic crisis,” said Council President Georgette Gómez after the votes.
“Most of our small businesses have been forced to close, and countless San Diegans are losing work and income as we try to slow the spread of the virus,” she said. “Today, we let struggling residents and small businesses owners know that we have their back.”
The emergency law temporarily halting evictions in San Diego will last until May 31. Tenants must demonstrate a “substantial decrease in income or medical expenses” caused by COVID-19 in order to qualify. It will not relieve a tenant of their requirement to pay rent or restrict a landlord from recovering rent at a future time.
“San Diegans shouldn’t have to worry about losing their home or storefront during this public health emergency, and now relief is here,” Faulconer said. “The temporary eviction moratorium is accompanied by millions of dollars to help small businesses stay afloat and keep San Diegans employed. I applaud the city council, city attorney and city staff for taking quick action to help our community.”
Last week, the state of California authorized local governments to temporarily halt evictions for residential and commercial tenants, but the state action does not provide relief unless cities adopt their own laws as San Diego has now done.
The temporary eviction moratorium seeks to strike a balance between the interests of tenants, landlords and lenders. The emergency ordinance protects tenants against evictions if they can document their income has been substantially reduced due to the COVID-19 pandemic, or if they have medical bills related to the coronavirus.
If the tenant does not provide evidence of financial impact related to COVID-19 within a specified timeframe, the landlord may pursue enforcement action in accordance with state and local laws. All owed rent is due upon move- out if a tenant decides to relocate while the emergency ordinance is in effect.
Councilman Chris Ward said the emergency law was needed, but didn’t go far enough in helping tenants.
“This is a necessary step but not a long-term solution,” he said. “Delaying payment can set up a crisis for the same families and businesses we are trying to help. Adding missed rent or mortgage payments onto already cost- burdened households will lead to continued hardship well after the moratorium ends.”
Ward said he was working with the Housing Commission to determine the best way to assist both renters and landlords after the health crisis ends.
The new ordinance directs staff to develop a strategy to work with banks and lenders to halt mortgage payments or foreclosures for individuals and landlords who have suffered severe loss of wages and income due to the health crisis.
“Most of our small businesses have been forced to close, and countless San Diegans are losing work and income as we try to slow the spread of the virus. Today, we let struggling residents and small businesses owners know that we have their back,” Council President Georgette Gomez said.
The council also formalized its support for Faulconer’s proposal to create a small business relief fund. The mayor has grown the fund from about $4 million to $6 million since he announced its creation last week as part of a broader economic relief package.
The fund was created to help local employers sustain operations, retain employees and address the unforeseen reduction in production and consumer demand. The city will use it to make micro loans available to small businesses impacted by the COVID-19 pandemic.
Financial assistance will range from $10,000 to $20,000 and will be allocated to eligible small businesses based on the availability of funds and program guidelines. To be eligible, businesses must meet the following requirements:
- Employ less than 100 full-time equivalent employees
- Have a city of San Diego business tax certificate
- Provide documentation that shows the business has been operational for at least six months
- Provide proof of economic hardship due to COVID-19
- Not have engaged in any illegal activity per local, state or federal regulations
The eviction moratorium ordinance, which is effective today through May 31, includes documentation requirements of tenants seeking relief, who have up to six months after the effective date of the ordinance to pay any unpaid rent. Landlords may seek payment of rent but may not evict tenants who qualify for relief.
As part of the action, the council asked city staff to work with banks and lenders to halt foreclosures of properties whose owners are unable to make mortgage payments, and aggressively seek local, state, and federal economic aid packages to provide relief to landlords, which benefits tenants.
Under the ordinance, the San Diego Housing Commission and its nonprofit affiliate Housing Development Partners, are prohibited from evicting tenants who reside in any of the 3,732 commission-controlled affordable apartments.
This story was updated at 6:30 p.m. Wednesday, March 25, 2020.
— City News Service and staff report