How COVID-19 Is Changing the San Francisco Rental Property Market

What You Need to Know About Stimulus, Eviction, and Moving Forward

UNDERSTAND THE AMERICAN RESCUE PLAN AND HOW IT CAN HELP LANDLORDS

President Biden signed a $1.9 trillion stimulus package into law in March, hoping to address issues such as unpaid rent, lost eviction opportunities, and the debt tenants and landlords have to face. The stimulus package included $25 billion for rent assistance and $5 billion for assisting with utilities.

1. RENT RELIEF IS AVAILABLE FROM THE LATEST STIMULUS BILL - FIND OUT IF YOUR TENANTS ARE ELIGIBLE

The stimulus provided $25 Billion in funding for the Treasury Department to create an Emergency Renter Assistance Program. This will be administered at the state and local level, and since San Francisco is such a large city, funds will be distributed directly for this program. 

Renters can get assistance that includes up to 12 months of rent and utility payments if they qualify, with additional three months if there’s an extenuating need and funds are still available. It’s the tenant’s responsibility to apply for this relief, but the landlord can assist. 

If a tenant is approved, funds will be paid directly to you - the owner. This is an excellent way to recover any unpaid rent that has accumulated over the last year. 

Make sure you’re willing to participate. If the rental property owner declines assistance, the money will be paid directly to the tenant. It’s better to have it come to you, so you can be sure that money is put towards rental payments. To apply on behalf of your tenants, you’ll need their consent.   

Eligibility is based on income, unemployment status, and a threat that the tenant could be facing homelessness without the relief.

2. FEDERAL EVICTION MORATORIUMS HAVE BEEN CALLED INTO QUESTION BUT CALIFORNIA MORATORIUMS REMAIN IN PLACE

The CDC had a federal eviction moratorium in place, which several federal courts have recently struck down, claiming the government overstepped its authority. 

That doesn’t impact our moratorium in California. The state’s moratorium, which provides even more protections to renters than the federal ban, is in effect until the end of June, and there are currently discussions underway about what should happen - whether it should be extended or other protections put into place.

Remember that the eviction moratorium in California does not forgive any debt from rent not paid.

3. UNDERSTANDING THE IMPACT OF COVID ON SAN FRANCISCO’S RENTAL MARKET

While managing eviction moratoriums, rent and mortgage relief, and resident relationships are the immediate fires that have needed tending over the last year and a half, there’s also the broader issue of what this means for the local rental market. 

San Francisco is unique in the impact that COVID has had. Rents have decreased, although they seem to be stabilizing from the initial drop. There’s more vacancy in the market, as many tenants no longer have to live close to home. Remote working has become normal, and that has sent employees who can work from home into areas that are cheaper. 

The drop in rental prices has not exactly drawn more people to the city. Data has shown that approximately half of the tenants in and around San Francisco lost income since last March, and the economic suffering has especially affected low-income residents and low-wage workers. Even with unemployment benefits and stimulus checks, more than 10 percent of the city’s population is struggling to keep up with rent payments. 

This will require flexibility and creativity from owners, landlords, and San Francisco property managers.

How Can We Look Forward?

With every challenge comes opportunity. This is a good reminder that resident relationships are important. They reduce the likelihood of late payments, eviction, and property damage. Put together a tenant retention plan and make it work for you and your residents.

PROFESSIONAL PROPERTY MANAGEMENT HAS NEVER BEEN MORE NECESSARY

At BanCal Property Management, we’ve been managing San Francisco rental homes since 1987.  We have seen the market rise and fall, and we’ve worked through every possible high point and low point. With the new laws in place, the pandemic recovery slow to reach San Francisco, and a lot of confusion and misinformation out there - San Francisco property management is critical. Contact us to talk about what all this means for your property.