Update: Sacramento expands city ban on evictions during coronavirus crisis to business tenants
The Sacramento City Council Tuesday voted to extend its emergency moratorium on evictions to business tenants financially-impacted by the coronavirus.
Last week, the council adopted an emergency moratorium on evictions, but it only applied to residential tenants.
The council approved the commercial eviction ordinance in an 8-1 vote Tuesday in a first-of-its kind virtual meeting, with Councilman Allen Warren voting against. Warren raised concerns the ordinance will cause property owners to lose the revenue they count on to pay their mortgages, resulting in a slew of foreclosures. The council will revisit the ordinance in 30 days or earlier.
To qualify for the protections, business owners must be experiencing a loss of income or patronage as a result of the coronavirus, or the state or county’s stay-at-home order, the ordinance says.
Like the residential version, the protections are not automatic.
Tenants must notify their landlord in writing before the day the rent is due that they have a covered reason for a delayed payment, provide the landlord with verifiable documentation to support the covered reason and pay the portion of the rent they are able to pay.
Renters will have up to roughly four months after after the state emergency declaration ends to pay the deferred rent. The declaration is currently set to end May 31, meaning the rent would be due around Sept. 31.
Jerry Mitchell, who owns Capitol Garage downtown and The Porch in midtown, said sales at both restaurants are down at least 95 percent since prior to the virus. He’s worried about paying rent for both restaurants, due April 1. He hopes the council will adopt the ordinance.
“The stress level would drop dramatically,” Mitchell said.
Mitchell has applied for federal grants as well as the city’s $1 million emergency small business relief fund, but does not expect funds from either to arrive before rent is due.
“I constantly look for what’s out there,” Mitchell said. “But it’s still gonna take a long time. Look at how many people are applying.”
Update on city loan program
The city last week received more than 1,800 completed applications for its $1 million no-interest loan program and hopes to start distributing funds next week, said Councilman Steve Hansen, who represents the downtown area.
Of the roughly 830 applicants who completed a survey attached to the applicant, eviction was the top concern they listed, Hansen said.
Mitchell is worried about paying back all the deferred rent, along with current rent, in September, but if he receives federal funding by then, he should be alright, he said.
In addition to restaurants, the ordinance will help the city’s retail shops, day care facilities and nonprofits, Hansen said.
“One of the biggest challenges they have is fear of eviction,” Hansen said. “So given the city’s limited resources, how can we help stabilize these small and critical businesses so we don’t have a huge collapse of our small business economy in the city that would leave restaurant spaces, retail spaces, the life blood of much of our communities, vacant.”
Hansen encouraged residents to support local restaurants by ordering food, and by picking it up if possible instead of using third-party delivery services, like Grubhub or Postmates, that take a significant cut.
Relief from foreclosure
Mayor Darrell Steinberg said he talked to a group of community and commercial banks over the weekend, who said they would slow down or halt foreclosures during the coronavirus.
“If an owner cannot pay their mortgage timely because they aren’t receiving their rent from a commercial tenant timely, then everybody needs temporary relief and temporary forbearance and that’s the way this should work,” Steinberg said. “That’s the way this will work.”
The banks did not provide anything formal in writing, Steinberg said.
For that reason, Warren voted against the ordinance Tuesday, he said.
“You’re forcing property owners to have skin in the game and the lenders have not made a commitment,” said Warren, a developer.
Councilman Jeff Harris echoed the concern, but suggested the council revisit the ordinance in 30 days, and his colleagues agreed. If the federal government makes an announcement regarding banks before then, the council will revisit it earlier, they decided.
The emergency ordinance will go into effect immediately.
Tenants can contact the city if they believe their landlord is violating the ordinance, Kelli Trapani, a city spokeswoman, has said. Landlords in violation could face fines of up to $25,000.
Meanwhile, the Sacramento County Board of Supervisors on Tuesday passed a non-enforceable resolution that would temporarily ban evictions against tenants affected by the coronavirus pandemic, but failed to pass an emergency ordinance on the same subject that would give the ban the force of law.
This story was originally published March 24, 2020 at 3:28 PM.
