California to cover all $5.2 billion in unpaid rent in the state during the pandemic

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Gavin Newsom has announced that California will pay off all unpaid rent accrued during the pandemic using a $5.2 billion federal pot 'on a scale never seen before in the US.'

The Governor, who is facing a recall election expected in the fall, is also likely to extend a ban on evictions for unpaid rent beyond June 30 - a pandemic-related order that was meant to be temporary but is proving difficult to undo.

'California is planning rent forgiveness on a scale never seen before in the United States,' Newsom wrote on Twitter Monday night, quoting a New York Times article.

The 53-year-old Democrat, who finds his state flush with unused federal Covid relief cash and surplus tax income, is also going to splash another $2 billion to cover the costs of electricity and water for lower income households.

Announcing the measures last week, Newsom said: 'Anybody that's been impacted by this pandemic that can't pay their rent, we will pay 100 percent of your rent going back to April of last year.

'Anybody that's impacted by this pandemic that can't pay their rent and can't afford their water bill or their utility, California will pay those bills.'

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But the state, like many others, finds itself with more money than expected after Congress bailed out local governments from federal coffers.

California is poised to cover not just unpaid rent, but also another $12 billion back to taxpayers through stimulus checks worth $600 to millions of middle-class citizens.

Such is the abundance in funds sloshing around, Republican lawmakers in D.C. have argued that the Biden administration should recoup some of the surplus for its planned infrastructure upgrades.

California's budget has also been buoyed by the tech boom amid the pandemic, with some of the state's top earners helping to pump the treasury full by selling their stocks and mansions.

The state relies heavily on the incomes of the wealthy and achieves surpluses in years when the market does well - which it did, particularly for Silicon Valley, throughout 2020.

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