California extends eviction moratorium through June 30

[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.  

[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.