Los Angeles City Councilman David Ryu, 4th District, introduced a motion on Aug. 18 to relieve rent and utility debt caused by the COVID-19 pandemic. The plan would allow tenants who are unable to pay rent or utility bills to the Los Angeles Department of Water and Power during the COVID-19 pandemic to have the debt forgiven.

“Since the early days of this pandemic, I have warned of an impending debt crisis among renters,” Ryu said. “If we don’t deal with this crisis now, it will create an avalanche of homelessness and a generation of people buried in debt, and Los Angeles will pay the price for decades to come.”

In March, Los Angeles Mayor Eric Garcetti ordered a moratorium on evictions and water and power shut-offs at households financially impacted by COVID-19. Ryu also introduced legislation that was later approved to freeze all rent and utility bill increases.

In Los Angeles County, 1.2 million unemployment claims have been filed since the start of the COVID-19 public health emergency, according to the California Policy Lab. Ryu pointed to a new report from the UCLA Luskin Institute on Inequality and Democracy that estimates approximately 75% of Los Angeles workers without income are renters – approximately 449,000 individuals. Without action to address the growing rental debt burden, up to 120,000 households could become homeless, according to the UCLA report.

The motion asks the city to explore lending options with the Federal Reserve’s Municipal Liquidity Facility program – part of the federal CARES Act – to fund the city’s debt relief proposal. The MLF can purchase short-term notes from state and local governments to help them manage cash flow shortfalls resulting from decreased revenue, continue normal government operations and fund obligations. The MLF has not been used to fund rent or debt relief programs, which is an option Ryu hopes can be considered.

The motion, seconded by Councilman Marqueece Harris-Dawson, 8th District, follows the City Council’s support for the federal Rent and Mortgage Cancellation Act, a bill introduced in the U.S. Congress.

“This is a national crisis that Trump and Senate Republicans could end if they gave a damn,” Ryu added. “But until they do, Los Angeles should take this debt off the shoulders of renters. At the end of the day, the city is in a much better position to manage debt than your average working family.”

For information, visit davidryu.lacity.org.