New rule applies to residential, commercial tenants who face financial shortfalls due to coronavirus
Encinitas business owners and residents who are already struggling financially due to the novel coronavirus pandemic should not face losing their rented storefronts or homes, City Council members said this week as they approved a temporary moratorium on evictions.
The council unanimously approved the short-term moratorium for both commercial and residential tenants who can show that they face financial hardships due to the COVID-19 virus. A job loss, reduction in business revenue, childcare responsibilities brought on by the closure of schools, or the care of a family member with coronavirus are all qualifying financial hardships.
As they voted on the proposal Wednesday, April 1, council members said they that were particularly concerned about protecting the city’s many small business owners from losing their rented spaces, saying such businesses are a vital part of the community’s character. They also stressed that the new ordinance was a temporary measure, allowing people who are experiencing financial hardship a little bit of extra time to pull together rent money.
“Nothing in here absolves that person (of eventually) paying rent,” Councilman Joe Mosca said.
In other news Wednesday, April 1, council members received an update on the city’s own financial prospects given the national economic downturn associated with the pandemic. And, the council asked city employees to produce a report for the council’s next meeting on April 15 looking into when Moonlight Beach might reopen to walkers and joggers.
The new moratorium on evictions, which is modeled on similar measures enacted by the city of San Diego and the county, applies to rent payments that were due on or after March 27. It remains in effect until the city’s local emergency order is terminated, or the state’s governor lifts his order banning evictions and foreclosures against tenants and homeowners.
Tenants who meet the financial hardship qualifications will have up to six months after the emergency conditions are lifted to repay their unpaid rent. In order to qualify, tenants must provide documentation showing that they meet the conditions, ordinance paperwork indicates.
City Finance Director Teresa McBroome told the council that the city itself stands to see its tax revenue significantly reduced by the economic fallout from the global pandemic, both in the current fiscal year ending June 30 and in the two years that follow.
“The decline in (hotel bed tax revenue) and sales tax has been immediate,” she said.
The current estimate is that the city will experience a $2 million reduction in general fund revenue this fiscal year and $4.4 million in the coming fiscal year, she said, repeatedly stressing that these were “preliminary projections” for what is a rapidly changing, “fluid” situation.
The city also will likely face extra expenses associated with the coronavirus situation, including a recalculation of the city’s pension fund expenses for retired employees due to the recent stock market downturn, she added.
When the council approved its current budget last spring, general fund revenue was forecasted to total just under $77.3 million in the current fiscal year and $79.78 million in the next fiscal year.
Sales taxes typically make up about 18 percent of the city’s budget and bed tax revenue, or Transient Occupancy Tax, is about 3 percent, McBroome said Wednesday, April 1.
Council members also debated Wednesday, April 1, whether to reopen city beach areas to walkers and joggers who practice “social distancing” behavior and keep at least six feet apart. After much discussion about enforcement issues and the benefits using the open stretches of sand as exercise space, council members ultimately decided to hold off on making any changes to the existing beach closure situation.
The city’s fire chief, Mike Stein, told the council that the city is now “gaining compliance” on its closure order and altering it would result in new enforcement issues. Also, he noted, Encinitas is still in the early stages of the spread of the virus and more restrictive measures might be required later.
“We still have a month before we reach the full potential of this pandemic,” he said.
— Barbara Henry is a freelance writer for The San Diego Union-Tribune