Landlords almost never "settle" with the renter in this way, they keep the deposit and if they are a corporate landlord they sell off the debt to a collection agency and move on to the next tenant. If they are an individual landlord, then it really depends -- California has a lot of accidental landlords holding onto property because of Prop 13, and they can themselves be pretty incompetent in running their business. Negotiating with them is worth a try.
Part of the reason it doesn't happen is that if a tenant is not savvy enough to move to a cheaper unit when their income declines, they are unlikely to be savvy enough to try to negotiate with the landlord for a reduced debt obligation in exchange for quickly vacating.
The responsible tenants move out promptly to a place they can afford (or move in with family) and the irresponsible ones wait to be evicted. Unfortunately there isn't much middle ground.
I honestly can't tell if you're just being pedantic or have a point. At the time that a landlord sends the debt to collections, they are no longer expecting to recoup 100%. As a degenerate example, say the renter offers to pay money owed minus one dollar, prior to sending to collections. Any rational landlord will accept this offer - which is settling for less than 100%. So alright yea, a landlord may not settle directly, but sending to collections is conceptually the same thing as settling, inasmuch as it means the debt will be resolved with the landlord receiving less than 100% and the debtor paying less than 100%.
Part of the reason it doesn't happen is that if a tenant is not savvy enough to move to a cheaper unit when their income declines, they are unlikely to be savvy enough to try to negotiate with the landlord for a reduced debt obligation in exchange for quickly vacating.
The responsible tenants move out promptly to a place they can afford (or move in with family) and the irresponsible ones wait to be evicted. Unfortunately there isn't much middle ground.