When the pandemic hit, the Centers for Disease Control and Prevention (CDC) foresaw widespread financial hardship for Americans and established a moratorium on evictions. For the past seven months, that order has fueled a battle between the Alabama Association of Realtors and the United States Department of Health and Human Services. According to the Alabama Association of Realtors, the CDC overstepped when it extended renter protections to include non-federally-funded rental housing.
The moratorium order prohibits residential landlords nationwide from evicting certain tenants. The order protects tenants who:
- have made their best effort to obtain government assistance for housing,
- are unable to pay their full rent due to a substantial loss of income,
- are making their best effort to make timely partial payments of rent, and
- would become homeless or have to move into a shared living setting if they were to be evicted.
The moratorium was initially enacted in 2020 by the Trump Administration but was extended by President Biden through June 30, 2021, when it is set to expire.
On May 5, 2021, the conflict evolved when District Court Judge Dabney L. Friedrich of the District of Columbia found that the CDC had exceeded its authority with the moratorium, which she ruled unlawful.
In her 20-page decision, Friedrich wrote:
“The court recognizes that the COVID-19 pandemic is a serious public health crisis that has presented unprecedented challenges for public health officials and the nation as a whole.”
“The pandemic has triggered difficult policy decisions that have had enormous real-world consequences. The nationwide eviction moratorium is one such decision.”
“It is the role of the political branches, and not the courts, to assess the merits of policy measures designed to combat the spread of disease, even during a global pandemic. The question for the Court is a narrow one: Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not.”
The ruling applied nationwide.
Complications with the ‘Unlawful’ Ruling
The Justice Department has filed a notice to appeal the ruling, stating that they “respectfully disagree” with the Court’s conclusions.
Bryan Boyton, acting assistant attorney general for the department’s Civil Division, stated: “The CDC’s eviction moratorium … protects many renters who cannot make their monthly payments due to job loss or healthcare expenses. Scientific evidence shows that evictions exacerbate the spread of COVID-19, which has already killed more than half a million Americans, and the harm to the public that would result from unchecked evictions cannot be undone.”
The pushback from the Justice Department is likely to extend the ruling for months, meaning results might not be finalized until after the moratorium has been lifted. Jason Vanslette, a mortgage foreclosure litigation attorney, explains:
“[The appeal] process can take anywhere between 30 to 60 days to be heard. If the rehearing is denied and the Supreme Court decides to take the issue itself and review it, that could even take up to a year or more.
In that time period, the CDC or the DOJ might seek an injunction to maintain the status quo until [Judge Friedrich’s] ruling is heard. Or the alternative could be that, you know, until [Judge Friedrich’s] ruling is found to be unlawful, we won’t hold an injunction on the moratorium and allow for evictions to proceed.
The ironic part is, by the time it gets to the Supreme Court, we might already be out of the pandemic, which is the whole basis of the moratorium and of itself.”
The Ruling Applies ONLY to the CDC Moratorium
Now, we should clarify: The ruling by Judge Friedrich was explicitly aimed at the CDC moratorium and did not apply to other similar state protections and local ordinances. Tenants and landlords should review eviction moratoriums in their own locales to determine whether their situations have been impacted.
Eviction Moratoriums in California
Although the CDC moratorium seems like a progressive step for landlords, the reality is not so true. In California, state legislation already protected renters from being evicted.
On August 31, 2020, California adopted legislation AB 3088, which prevents landlords from filing eviction actions against tenants who fail to pay rent due to financial distress caused by COVID-19. On January 29, 2021, Governor Newsome signed SB 91, extending the protections of AB 3088 through June 30, 2021.
Eviction Rates in California and the US
Despite the current eviction moratoriums, there has been an increase in eviction notices. A report released by ATTOM Data Solutions reveals current U.S. foreclosure activity:
- Nationwide in March 2021, one in every 11,568 properties had a foreclosure filing.
- States with the highest foreclosure rates in March 2021 included Delaware (one in every 5,037 housing units with a foreclosure filing); Illinois (one in every 6,119 housing units); Indiana (one in every 6,275 housing units); Ohio (one in every 6,569 housing units); and Florida (one in every 6,763 housing units).
- 6,418 U.S. properties started the foreclosure process in March 2021, up 7 percent from the previous month but down 77 percent from March 2020.
- Lenders completed the foreclosure process on 1,576 U.S. properties in March 2021, up 2 percent from the previous month but down 83 percent from March 2020.
During Q1 of 2021, California saw a 36 percent increase in foreclosure stats. These foreclosures were directed towards vacant or abandoned homes.
What to Expect Post-June?
On June 30, multiple eviction moratoriums will expire. The question now: what will happen to tenants?
According to Q3 2020 data released by the Mortgage Bankers Association’s Research Institute for Housing America, over 6 million households did not make their rent or mortgage payments in September 2020.
What will happen now remains uncertain, and the recent ruling by the District of Washington judge is not expected to have much of an impact on the progression of evictions.
If moratoriums are lifted, landlords will have legal precedent to begin the eviction process. Unfortunately, depending on the state, this can be a lengthy process. For example, in California, the eviction process often takes over 30 days. Furthermore, state court officials expect landlords to file twice as many eviction cases in 2021, which will lengthen the eviction process further.
The complications that come with the unprecedented legislation of the pandemic make it hard for anyone to tell what the far-reaching consequences of the moratorium will be — we probably won’t know until later in 2021 — but one thing is certain: the pandemic has been hard on business owners, landlords, and tenants alike.
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