Gavin Is Happy: California Plans to Use Stimulus Dollars for Rent Forgiveness

June 22, 2021 Topic: economy Region: Americas Blog Brand: Politics Tags: Stimulus ChecksEconomyPandemicCoronavirusCalifornia

Gavin Is Happy: California Plans to Use Stimulus Dollars for Rent Forgiveness

The Golden State Stimulus, which has a price tag of $12 billion, proposes giving a $600 one-time payment and $500 per dependent, to Californians making less than $75,000 per year, or married couples making less than $150,000 total.

California has supplemented the federal stimulus programs with a stimulus of its own, which it calls the Golden State Stimulus. But in the meantime, the state’s Democratic governor, Gavin Newsom, is preparing to launch a unique program, to be funded with stimulus dollars. 

According to the New York Times, a proposal is in “final negotiations” in the California state legislature that would “pay 100 percent of unpaid rent that lower-income Californians incurred during the pandemic,” using federal stimulus funds. Also under consideration is an additional $2 billion to pay for unpaid water and electricity bills for low-income Californians

A spokesman for the California Business, Consumer Services and Housing Agency told the newspaper that the proposal is “certainly the largest rent relief there’s ever been.”

“California has over $5 billion in federal funds to help pay the rent of low-income people,” Jason Elliott, a senior counselor to Mr. Newsom, told the newspaper. “Our challenge is to distribute this as quickly as possible while guarding against fraud and making sure we prioritize those who are struggling the most.

The Golden State Stimulus, which has a price tag of $12 billion, proposes giving a $600 one-time payment and $500 per dependent, to Californians making less than $75,000 per year, or married couples making less than $150,000 total. The payments, to much controversy, will also go to undocumented immigrants living in the state. 

California, in the meantime, has “intercepted” some federal stimulus checks meant for people who owe child support payments. 

The new rent forgiveness proposal, meanwhile, comes as many states, due to both quicker-than-expected economic recoveries and federal funding from the stimulus, find themselves much more flush with cash than they expected at the outset of the pandemic. 

The New York Times added that in California, other factors have contributed to larger-than-expected tax receipts, most notably “enormous wealth of tech entrepreneurs and Hollywood moguls, and the sales of surging stocks and multimillion-dollar homes.” These, coupled with the state’s high taxes on high incomes, have seen money flow into California’s coffers this year. 

All is not great in California, however, as the state has more than 100,000 residents who sleep each night in their cars or outside, meaning California has more than half of the country’s homeless population. This has been attributed to the state’s high cost of real estate, which has led in turn to higher-than-usual rents. 

The state, meanwhile, lost population in 2020, with the influx of incoming Californians leading to housing in other cities, the New York Times said.

Newsom is currently facing a potential recall election, although it’s unclear when, exactly, that election would take place. 

Stephen Silver, a technology writer for the National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters