California extends eviction moratorium through June 30

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California extends eviction moratorium through June 30

Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

We have one tenant that we provided reduced rent (reduced to $2k from $2.6k) when impacted by Covid that applied for rental relief many months ago that we have not received a response (and mostly have given up on).  The tenant paid most of their rent each month (they paid the agreed upon reduced rent) and the reduce rent rate ended late last year.  This eviction moratorium does not negatively impact me in any way (we are not considering evicting anyone at this time) other than my belief that it is not fair to Landlords that have not been collecting their rent. 

California extends eviction moratorium through June 30 for anyone that has filed for rent relief.  This is the 4th extension of the eviction moratorium.  Some Landlords have not received rent, but cannot evict their tenants.

If the state wants to ensure tenants can stay in their home, they should come up with the money to pay the rents.  It is unreasonable to expect Landlords to continue to not collect rent and have no viable recourse.  The delinquent tenants, if the state does not provide the rent relief, are unlikely to pay their delinquent rent. 

In my primary market rents went up over 20% in 2021.   there are multiple reasons for the large rent increase, but one reason is the increase risk Landlords face due to eviction moratoriums.  These policies will increase rent rates for a few years.  The way free markets work is that increased risk must be compensated for by increased revenue.  

As an aside, the eviction moratorium extension was the first California bill signed into law by a female.  The governor was on vacation so the Lt Governor signed the bill.  I find it remarkable that a progressive state like CA has never before had a bill signed to law by a female.  It is about time, but I wish she had signed a different bill into law.  

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Quote from @Dan H.:

I think property values in San Diego have tripled in the last 14 years, but property values will drop the hardest in that market when things go bad. In 2008, San Diego probably lost 40 - 50% value and took about four years to catch up. Appreciation is like flipping; you have to time the market to take advantage of it. If the world turns and you're not ready, you can lose a lot.

The California numbers look sexy because they are big. If you buy something for $400,000 and ten years later it's worth $1.2 million, that's no different than me buying something for $100,000 and ten years later it's worth $300,000. We get the same return, but I benefit in other ways like lower taxes, paying tenants, and just laws.

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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    4y
    Quote from @Dan H.:

    We have one tenant that we provided reduced rent (reduced to $2k from $2.6k) when impacted by Covid that applied for rental relief many months ago that we have not received a response (and mostly have given up on).  The tenant paid most of their rent each month (they paid the agreed upon reduced rent) and the reduce rent rate ended late last year.  This eviction moratorium does not negatively impact me in any way (we are not considering evicting anyone at this time) other than my belief that it is not fair to Landlords that have not been collecting their rent. 

    California extends eviction moratorium through June 30 for anyone that has filed for rent relief.  This is the 4th extension of the eviction moratorium.  Some Landlords have not received rent, but cannot evict their tenants.

    If the state wants to ensure tenants can stay in their home, they should come up with the money to pay the rents.  It is unreasonable to expect Landlords to continue to not collect rent and have no viable recourse.  The delinquent tenants, if the state does not provide the rent relief, are unlikely to pay their delinquent rent. 

    In my primary market rents went up over 20% in 2021.   there are multiple reasons for the large rent increase, but one reason is the increase risk Landlords face due to eviction moratoriums.  These policies will increase rent rates for a few years.  The way free markets work is that increased risk must be compensated for by increased revenue.  

    As an aside, the eviction moratorium extension was the first California bill signed into law by a female.  The governor was on vacation so the Lt Governor signed the bill.  I find it remarkable that a progressive state like CA has never before had a bill signed to law by a female.  It is about time, but I wish she had signed a different bill into law.  

     Why do you care if it's a male or female taking your money away? Seems sexist. ;-)

    Just think of non paid rents as another California tax icrease since the moratorium was forced upon you. It makes it easier to shrug and say "well, thankfully California doesn't have the highest taxes and investing in California is a smart idea". I know, totally convoluted thinking but that is the kind of response I see from those investing under those kinds of conditions. Makes me think there is something in the water there.

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  • Dan H.Pro Member
    OP
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    4y
    Quote from @Account Closed:
    Quote from @Dan H.:

    We have one tenant that we provided reduced rent (reduced to $2k from $2.6k) when impacted by Covid that applied for rental relief many months ago that we have not received a response (and mostly have given up on).  The tenant paid most of their rent each month (they paid the agreed upon reduced rent) and the reduce rent rate ended late last year.  This eviction moratorium does not negatively impact me in any way (we are not considering evicting anyone at this time) other than my belief that it is not fair to Landlords that have not been collecting their rent. 

    California extends eviction moratorium through June 30 for anyone that has filed for rent relief.  This is the 4th extension of the eviction moratorium.  Some Landlords have not received rent, but cannot evict their tenants.

    If the state wants to ensure tenants can stay in their home, they should come up with the money to pay the rents.  It is unreasonable to expect Landlords to continue to not collect rent and have no viable recourse.  The delinquent tenants, if the state does not provide the rent relief, are unlikely to pay their delinquent rent. 

    In my primary market rents went up over 20% in 2021.   there are multiple reasons for the large rent increase, but one reason is the increase risk Landlords face due to eviction moratoriums.  These policies will increase rent rates for a few years.  The way free markets work is that increased risk must be compensated for by increased revenue.  

    As an aside, the eviction moratorium extension was the first California bill signed into law by a female.  The governor was on vacation so the Lt Governor signed the bill.  I find it remarkable that a progressive state like CA has never before had a bill signed to law by a female.  It is about time, but I wish she had signed a different bill into law.  

     Why do you care if it's a male or female taking your money away? Seems sexist. ;-)

    Just think of non paid rents as another California tax icrease since the moratorium was forced upon you. It makes it easier to shrug and say "well, thankfully California doesn't have the highest taxes and investing in California is a smart idea". I know, totally convoluted thinking but that is the kind of response I see from those investing under those kinds of conditions. Makes me think there is something in the water there.


     >Makes me think there is something in the water there.

    Not sure about something in the water, but California buy n hold has produced outstanding ROI. Case Shiller shows the 3 cities with highest buy n hold return for this century are Ca cities.

    I have purchased with good timing and poor timing.  My properties have appreciated between $2k and $12k per month over their hold period. The $12k/month is only over a 15 month hold, but we have a property that has appreciated over $8k/month over a 20 year hold (appreciated ~$2m).  There was nothing special about the purchase other than it was in San Diego.  

    Best of luck on your RE investments. 



    2Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y
    Quote from @Dan H.:

    I think property values in San Diego have tripled in the last 14 years, but property values will drop the hardest in that market when things go bad. In 2008, San Diego probably lost 40 - 50% value and took about four years to catch up. Appreciation is like flipping; you have to time the market to take advantage of it. If the world turns and you're not ready, you can lose a lot.

    The California numbers look sexy because they are big. If you buy something for $400,000 and ten years later it's worth $1.2 million, that's no different than me buying something for $100,000 and ten years later it's worth $300,000. We get the same return, but I benefit in other ways like lower taxes, paying tenants, and just laws.

    The DIY Landlord Book4.7248 Reviews
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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    I feel for those of you.  If the government is going to say you can't file an eviction for unpaid rent if the tenant applied for rent relief, then they need to put a time limit on it and get the paperwork processed in a timely fashion (eg give them 30 days from when the paper work is file until they are given the money).  I can't believe there isn't a massive lawsuit yet against the government.

    @Account Closed  I thought the same, but re-read it and I think the poster was more expressing surprise that for a state as progressive as California, they've never had a woman as governor or sign a bill into law.

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  • Chad HalePro Member
    Property Manager / Investor · San Jose, CA · Member since 2013 · 779 posts · 301 votes
    4y
    The latest extension only applies to those that have already filed for assistance by on before March 31, 2022.  If they want to file for assistance today for the first time, you can start the eviction process.

    https://caanet.org/state-passes-urgency-covid-19-eviction-law/

    1Reply
  • Dan H.Pro Member
    OP
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    4y
    Quote from @Nathan Gesner:
    Quote from @Dan H.:

    I think property values in San Diego have tripled in the last 14 years, but property values will drop the hardest in that market when things go bad. In 2008, San Diego probably lost 40 - 50% value and took about four years to catch up. Appreciation is like flipping; you have to time the market to take advantage of it. If the world turns and you're not ready, you can lose a lot.

    The California numbers look sexy because they are big. If you buy something for $400,000 and ten years later it's worth $1.2 million, that's no different than me buying something for $100,000 and ten years later it's worth $300,000. We get the same return, but I benefit in other ways like lower taxes, paying tenants, and just laws.


     True if the appreciation percentages were the same.  The California primary housing markets have a higher appreciation rate than virtually all other markets.  You can reference NeighborhoodScout to see the major California coastal cities are each 10/10 for this century.  Or you can simply look at the housing prices to determine virtually all other markets have not had the same rate of appreciation.

    Four of my existing properties (we sold one recently) were purchased before the Great Recession and one shortly before the Great Recession. They all have appreciated over $2k/month over their hold.  The property that was purchased shortly before the GR has appreciated over $4k/month over its hold.  This property was negative ~20% from my purchase price (which was not quite the top of the market), but I was not over extended so was not forced to sell at the depreciated price.  As you point out it took only a few years (less than 5 years in virtually all areas of San Diego) to recover. Now it has appreciated ~$1m over purchase price.  

    I do recognize that past performance does not guarantee similar future performance, but San Diego has many decades (at least 5) of outstanding appreciation and the fundamentals are very similar (geographically constrained, great climate, diverse jobs, housing shortage, etc,).  I also realize that the last decade has had extreme RE appreciation that cannot continue at that pace.  Some of this is recovery from the GR, but some of it is due to other items that are not going to be addressed quickly (such as a housing shortage were many people want to live). 

    Historically coastal California RE has produced incredible ROI. Time will tell if that is to continue, but I suspect it will over the long term (I make no predictions for the short term).

    Good luck

    3Reply
  • Dan H.Pro Member
    OP
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    4y
    Quote from @Nathan Gesner:
    Quote from @Dan H.:

    I think property values in San Diego have tripled in the last 14 years, but property values will drop the hardest in that market when things go bad. In 2008, San Diego probably lost 40 - 50% value and took about four years to catch up. Appreciation is like flipping; you have to time the market to take advantage of it. If the world turns and you're not ready, you can lose a lot.

    The California numbers look sexy because they are big. If you buy something for $400,000 and ten years later it's worth $1.2 million, that's no different than me buying something for $100,000 and ten years later it's worth $300,000. We get the same return, but I benefit in other ways like lower taxes, paying tenants, and just laws.


     >I benefit in other ways like lower taxes, paying tenants, and just laws.

    Pre-covid San Diego had one of the lowest eviction rates in the country and one of the lowest delinquent rent rates in the country.  Not sure if the various covid eviction moratoriums changed this.  A primary reason the eviction and delinquent rates were so low is because of the shortage of housing.  A tenant that has been evicted or gets not great LL feedback will find it difficult to get decent housing in San Diego.  Our tenant criteria requires no evictions (ever) and strong LL feedback (no LL feedback is not strong LL feedback).  My point is the tenant friendly laws (the laws are tenant friendly, there are no quick evictions and there have been eviction horror stories) seldom come into play; the tenant has a lot of incentive to be a good tenant and keep the LL happy.

    The average property tax paid in California is 0.73% which is significantly below the national average of 1.07% (source SmartAsset.com).   there is a lot of mis-information out there about California taxes. One source indicates CA has the 8th lowest total tax for a middle class family.  California property tax rate is reasonable and below the national average. 

    I already admitted the laws are tenant friendly.  On if these are just laws likely depends on your perspective.  I wish they were less tenant friendly, but there are some LL that take advantage when the market so favors the LL. The tenant friendly laws protect against LL taking advantage, but it is at the expense of the landlord when the landlord is being just and simply wants their property to be taken care of and the rent to be paid in full and on time. At the very least the laws are not LL friendly, I leave it to others to determine f they are just.  

    1Reply
  • Kelsey Bailey
    Property Manager · Bay Area-Greater Sacramento · Member since 2021 · 94 posts · 51 votes
    4y
    Quote from @Chad Hale:
    The latest extension only applies to those that have already filed for assistance by on before March 31, 2022.  If they want to file for assistance today for the first time, you can start the eviction process.

    https://caanet.org/state-passes-urgency-covid-19-eviction-law/


     We can only hope this is true - there have been other cutoff dates that tenants have missed and we've had our cases dismissed in favor of backtracking and allowing the tenants the relief despite our efforts to get them to apply within the deadlines. 

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