SACRAMENTO, Calif. — Credit unions in at least one state may be spared the difficulties in helping members who suddenly face overdue rent bills. But they may also face an influx of new deposits as the result of a state-level stimulus.
California, which has a huge state budget surplus, has announced plans for a rent forgiveness plan on a huge scale. A $5.2 billion program in final negotiations at the state legislature would pay 100% of unpaid rent that lower-income Californians incurred during the pandemic and would be financed entirely by federal money, according to the New York Times.
The state is also proposing to set aside $2 billion to pay for unpaid water and electricity bills. In fact, the state is so flush it is also planning to give an additional $12 billion back to taxpayers, by sending state stimulus checks of at least $600 to millions of middle-class Californians.
According to the report, the state’s separate rental relief program would be available to residents who earn no more than 80% of the median income in their area and who can show pandemic-related financial hardship. In San Francisco, a family of four would have to earn less than $146,350 to qualify.
“Nationwide this is certainly the largest rent relief there’s ever been,” Russ Heimerich, a spokesperson for the California Business, Consumer Services and Housing Agency, a state umbrella organization that is overseeing the rent relief program, told the Times. “The big question is can we spend it all.”
Could Be Slow Going
But CU members may find the relief slow in coming.
“California is grappling with a problem other states might envy: handing out so much money can be a slow, bureaucratic process. A more modest program, already in place, was aimed at covering some but not all back rent, yet it has struggled to keep up with demand,” the report stated. “Only around 8% of the $619 million in requests for rental assistance in that program through Monday morning had been paid…After complaints that the 32-page form for rent relief took three hours to complete, the state abridged the application. It now takes an average of 30 minutes, is available in six languages and is easier to fill out on a smartphone.”