Delays in the Senate over a new stimulus package will likely have detrimental effects in Santa Clara County, said county Supervisor Dave Cortese.
The expiration on Aug. 1 of the $600 weekly supplemental unemployment benefits from the federal Coronavirus Aid, Relief and Economic Security Act leaves thousands of families unable to continue covering rent, likely increasing the homelessness surge in the county.
That, combined with the eviction moratorium set to expire at the end of the month, puts over 43,000 renters in Santa Clara County at risk of eviction, according to a study by Working Partnerships USA.
This is roughly 16 times the number of evictions in a typical year and could lead to a 225 percent increase in homelessness in the county, according to the 2020 study.
"It's important to see these numbers, it is certainly an eye opener," Cortese said. "On the other hand, I wasn't too surprised … There is no way you have such high unemployment and not have some kind of train wreck in terms of ability to pay."
Between March 15 and May 30, over 20,000 working people in Santa Clara County filed claims for unemployment insurance or pandemic unemployment assistance. There are still thousands more, including 95,000 undocumented residents, who don't qualify for benefits, according to the study.
The CARES Act and the eviction moratorium were temporary solutions that helped lighten the impacts, Cortese said.
And while the county is likely to extend the eviction moratorium, which allows tenants to delay payments without risk of eviction, tenants will still have to pay rent. Three months of back rent in the county could amount to $7,000.
Constitutionally, the county could implement rent forgiveness, but it would require taking on the financial burden from those tenants.
"Legally we have the option to tell landlords not to collect but they have the right to come back to us and say, 'fine then you have to pay it'," Cortese said. "These numbers would quickly bankrupt the city of San Jose or our county if that was to occur... It would make our county insolvent pretty quickly and our county is already looking at a $300 million deficit."
Cortese said the strongest form of relief can only and will need to be from the federal government because local governments do not have the financial ability to support this type of economic impact.
City and county governments are set up to provide social services and cannot run a deficit without balancing their budgets, unlike the federal government.
What the county can do in this situation is augment social services so that residents get cash payments or food stamps, propose a tax for COVID-19 relief and extend the eviction moratorium, among other creative solutions.
"Cash payments, food stamps, things like that are not enough, not only is it not enough to live, but it's typically not enough to live in a dignified fashion. So yeah, we are pretty scared. This is a really serious situation," Cortese said.
In July, Santa Clara County Board of Supervisors President Cindy Chavez proposed a half cent or five-eighths cent sales tax that would last five years to secure funding for COVID-19 relief. However it did not get enough votes.
"We have an obligation to work with every level of government to try to resolve this issue so people can stay in their homes," Chavez said. "What is really called for is more support, particularly at a federal level."
Cortese is also looking at developing a plan that would bring tenants and landlords together to compromise and create plans to make both parties whole.
"If you don't create or institutionalize a way for people to mediate people's problems before they become legal disputes then you end up mediating them later in the courtroom," Cortese said.
The county already has some institutional mediation programs like one in the Office of Human Relations, which is essentially a neighborhood mediation program. The city of San Jose also has a housing mediation program.
"It makes more sense to expand existing mediation programs in the county and city to take on a much higher volume and get people to start signing agreements," Cortese said. "This is better than going to court where tenants who are not legally proficient may get taken advantage of."
Chavez said there are "no bad guys in this," because landlords and tenants are both victims of the pandemic. Instead, there needs to be solutions that work for both parties.
"Every time you hear local officials say, 'we need the HEROES Act to pass' it is likely because of this problem and that makes sense because it is sort of a bipartisan issue," Cortese said. HEROES is short for Health and Economic Recovery Omnibus Emergency Solutions Act.
"Even if you're a conservative Republican businessperson you might be trying to protect the landlord and therefore you would say 'let's put some money for the landlords' in this bill which would still help the tenant because it displaces a need for the tenant to pay rent."
With some eviction moratoriums across the country close or already at their expiration, Cortese predicts the United States will be seeing millions of residents become homeless at the same time.
"Things are going to get a lot worse in the next 60 to 90 days," he said.
"That's the one thing I can tell you is very predictable and probably without dispute at this point," Cortese said. "Economic hardship beyond anything that most people in this community have experienced is going to set in in the next 60 to 90 days. It's just a question of how much federal relief we are going to get to mitigate that."
The Senate has not voted on the $3 trillion HEROES Act and instead Republicans have introduced their own version of a stimulus package called the Health, Economic Assistance, Liability and Schools Act, which has a budget of $1 trillion, nearly half the budget of the CARES Act. Benefits differ significantly among each stimulus package.
For example, under the HEALS Act, unemployment benefits will start at $200 a week through September and then increase to $500 a week until the end of the year. The HEROES Act will extend the $600 weekly benefits until January 2021, and for gig workers, independent contractors and part-time employees, benefits could be extended until March 2021.
The Senate has a week to push through a bill before it is set to go to a monthlong summer break on Aug. 7.
Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.