This article was posted on Thursday, Oct 01, 2020

Tenants are fearing homelessness, while many cash-strapped landlords are in dire straits. Private-sector interest-free loans could assuage the fear of eviction while keeping landlords solvent. When COVID-19 reared its ugly head, tenants’ advocates sounded the alarms, and lawmakers heard the call. Fearing massive displacement of renters who have lost income due to the pandemic, and with unemployment benefits ending soon, politicians have gotten together to enact ever-expanding eviction moratoriums and a wide range of tenant protections.

Meanwhile, landlords are struggling, especially mom-and-pops who are bereft of income. We were disheartened by a survey conducted by the Terner Center for Housing Innovation at UC Berkeley that reported one in four small landlords have borrowed funds to absorb costs, and some are on the brink of going out of business or losing retirement funds.

Relief Proposals Have Been Lopsided  

This virus and the economic fallout do not discriminate against landlords or against tenants. Everyone has suffered. There is no “tenant camp” or “landlord camp.” The question now is how to bounce back and find equitable solutions that recognize the pain of both tenants and rental property owners. Thus far, the proposals have been lopsided.

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In Sacramento, several crackpot measures like reducing rent across the board by 25% (AB 828) and giving tenants years to pay back COVID-related debt have been defeated or stalled. SB 1410 was one of the few bills that acknowledged the hardship of landlords.

In its original form, SB 1410 would pay 80% of back rent to landlords in exchange for reasonable concessions. The re-worked bill was watered down, however, and would not have provided much-needed cash assistance to landlords. Instead, owners would be entitled to tax credits spread out over many years. With the proposal butchered, SB 1410 lost its blessing. 

Mortgage Forbearance is a Band-Aid Fix

Another bill, AB 1436, would be a token act that grants one-year mortgage forbearance to small landlords with up to four units; landlords with five or more units could request just six-months forbearance. Although branded as a landlord relief bill, AB 1436 provides no aid to landlords trying to make ends meet.

A reality that often goes unacknowledged is that when owners don’t make money from their rental properties, tenants suffer. Maintenance, upkeep, and necessary repairs fall by the wayside.

In late-breaking news, we are relieved to learn that both AB 1436 and SB 1410 have died in committee, and the Governor is talking about a replacement bill. There are other measures we won’t survey here, but suffice it to say that after looking high and low, we could not find any legislative proposals that help owners. It’s been said by one former California governor and president that government is the problem and not the answer, but there is a private market that is willing and able to chip in and offer solutions.

Bay Area Wealth Can Put a Big Dent in the Crisis

Let’s explore the possibility that vocal, socially conscientious people who have the means to make a difference can step up and actually put a dent in this crisis.

In the tech capital of the world, there’s no shortage of money to go around. As Forbes reports, California is home to 165 billionaires, of whom a good number reside in the Bay Area. Governor Newsom, in his first days in office, called upon tech giants to provide developers with low-interest loans to build housing for teachers, nurses, and other middle-class Californians. So, asking well-to-do companies to help solve our current crisis is not a radical idea.

A Lifeline for Landlords

There have been numerous wealthy individuals, corporations, philanthropies, and foundations who have raised their hand and said they want to be part of the solution. They can now step up and help preserve housing by giving interest-free loans to tenants in order to pay past due rent. In so doing, they would give a lifeline to landlords who depend on rental income to sustain life and

maintain the comfort and amenities that tenants deserve.

“Someone needs to tap (the billionaires) on the shoulder, and say, ‘Now is the time to be there for us. What are you waiting for? This is the crisis.” This is what I told the San Francisco Chronicle recently, and that the publication conceded is not that far of a stretch considering that Jack Dorsey, head of Twitter and Square, forked over $1 billion to coronavirus relief and donated $10 million to close the digital divide for Oakland students.

Billionaires, Please Stand Up

Facebook, Apple, and other huge tech companies have put their money where their mouth is by pouring many millions into affordable housing programs. How about a similar effort – a private-sector pool of wealth providing interest-free loans—to enable tenants to pay their rent? Many tenants need the funds now – and landlords rely on that money. True, state and local moratoriums

on evictions for pandemic-related non-payment of rent still obligate the tenant to pay their back rent, but they defer that obligation to the point that it becomes increasingly unlikely that the tenant will be able to pay it back – especially if she has accrued up to 15 months of indebtedness, as AB 1436 would have allowed.

Worst of all, however, these eviction moratoriums place the burden entirely on the owner to collect the back rent, an effort that anyone who’s been through it knows, is costly, time-consuming, emotionally draining—and often unsuccessful.

Obviously, many details need to be worked out for a successful implementation of this model. For example, who would administer the loans? Would the funds be disbursed directly to the landlord in order to ensure that the money gets spent to pay rent and not simply into the pockets of unscrupulous tenants?

Having the private sector step in to get the money flowing to keep both tenants and landlords solvent is far faster and far more efficient than looking to government to do it. It’s the smart thing to do.

We call upon those with the means to make a real difference in the current crisis. It’s altruism at its best, but it’s also enlightened self-interest and good business. To the billionaires we say: “You’ve made money, and now it can really matter.”

Daniel Bornstein is the founding attorney of Bornstein Law. Daniel is a well-respected authority in landlord-tenant disputes and property management issues. With over 23 years of experience in handling real estate and civil litigation throughout the Bay Area, he also manages rental properties, is instrumental in completing real estate transactions and is renowned for his educational seminars.   For more information call (415) 409-7611 or visit  Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News.  For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at or call (415) 647-2419.