With the noble intention of containing the spread of COVID-19, the Centers for Disease Control and Prevention (CDC) recently announced an extension of the order banning residential evictions.
The original order, titled Temporary Halt in Residential Evictions to Prevent Further Spread of COVID-19, was set to expire on March 31, 2021, as outlined in President Trump’s $900 billion relief package, but will now be in effect until at least June 30, 2021.
What does the temporary halt mean for tenants and landlords?
It has been more than a year since the COVID-19 pandemic hit the United States, and Americans have felt the impact economically. Millions have filed for unemployment, and millions more have been displaced from their homes. As a result, the CDC implemented a ban on evictions. However, only those who qualify benefit from the ban.
The order prohibits residential landlords nationwide from evicting certain tenants. The order protects tenants who
- have used their best efforts to obtain government assistance for housing,
- are unable to pay their full rent due to a substantial loss of income,
- are making their best efforts 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.
In addition to the above requirements, one of the following financial criteria must be met. To qualify for protection, tenants must
- expect to earn no more than $99,000 (individuals) or $198,000 (filing joint tax return) in 2020,
- not have been required to report any income to the IRS in 2019, or
- have received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES [Coronavirus Aid, Relief, and Economic Security] Act.
Ongoing Actions Against Evictions
Several entities continue to look after the best interest of renters and homeowners during the pandemic. The CDC moratorium continues to be in effect simultaneously with the Federal Housing Finance Agency (FHFA) foreclosure and real estate owned (REO) eviction moratorium, as well as the Biden administration’s extension of COVID-19 forbearance and foreclosure protections for homeowners.
FHFA Extends Protection for Homeowners
On February 25, 2021, FHFA announced that Fannie Mae and Freddie Mac (the Enterprises) were extending moratoriums on single-family foreclosures and REO evictions until June 30, 2021. According to FHFA, single-family homeowners with a mortgage backed by Fannie Mae or Freddie Mac and tenants of properties that an Enterprise has acquired through foreclosure or deed-in-lieu of foreclosure transactions are protected.
Biden Administration Extends Protection for Homeowners
An announcement made by the Biden administration on February 16, 2021, provides ongoing security for American homeowners by
- extending the foreclosure moratorium for homeowners through June 30, 2021;
- extending the mortgage payment forbearance enrollment window until June 30, 2021, for borrowers who wish to request forbearance; and
- providing up to six months of additional mortgage payment forbearance, in three-month increments, for borrowers who entered forbearance on or before June 30, 2020.
“… As a part of the President’s commitment to deliver immediate relief for American families bearing the brunt of this crisis, the Department of Housing and Urban Development, Department of Veterans Affairs, and Department of Agriculture announced a coordinated extension and expansion of forbearance and foreclosure relief programs. These critical protections were due to expire in March, leaving many at risk of falling further into debt and losing their homes. Now, homeowners will receive urgently needed relief as we face this unprecedented national emergency.”
CDC Director Rochelle P. Walensky recently commented: “The COVID-19 pandemic has presented a historical threat to the nation’s public health. Keeping people in their homes and out of crowded or congregate settings – like homeless shelters – by preventing evictions is a key step in helping to stop the spread of COVID-19.”
As of April 2021, more than 61 million Americans have been vaccinated; however, this is only 18% of the U.S. population. In an attempt to prevent the spread of COVID-19 and to protect Americans from various strains appearing across the globe, health officials and the Biden administration are advocating for ongoing social distancing and mask mandates. To support such actions, agencies are attempting to prevent the displacement of more American families through eviction moratoriums.
Unfortunately, pending doom is associated with such moratoriums. Many fear these measures will have an enormous economic impact on our country. Analysts predict that the United States could face challenges related to mass evictions, homelessness, high vacancy rates, increased court cases, relocation and displacement, and more after evictions begin. Navigating through these consequences will present a brand-new problem.
Landlords Take Action
Tenants are not the only community impacted by the pandemic; landlords have also had to identify avenues for survival amidst the ongoing moratoriums – and many have fallen behind on their payments.
As a result, landlords have identified loopholes in the moratoriums and have found ways to re-tenant properties that were experiencing zero-to-negative cash flow. Most leases run for 12 months, which means many landlords will be presented with an opportunity to vacate their tenants during the pandemic. Although these tenants are legally protected, landlords have identified ways in which tenants are “breaking” their leases, providing them a loophole to evict them. Reasons can be as simple as having an illegal pet, engaging in minor criminal activity, or destroying property – many which are heightened to permit eviction.
Tenant advocates say they’re also seeing several illegal tactics being used by landlords. For example, they are changing locks, boarding up the doors, shutting off the utilities – also known euphemistically as the “self-help” eviction.
An Uncertain Future
The imminent concern is keeping Americans safe. However, the future is uncertain. The ban on evictions will eventually be removed, leaving millions of Americans at risk of losing their homes.
John Pollock, the coordinator of the National Coalition for a Civil Right to Counsel, stated that moratoriums are “the only thing holding back the flood” of evictions that could spiral through the still-shaky American economy.
Currently, surveys indicate that 18.4% of all tenants owe back rent, with an estimated $57 billion owed to landlords.
More than $50 billion in federal relief money has been allocated for renters – $25 billion from the December stimulus and $27 billion from the recent American Rescue Plan Act. However, many landlords have yet to receive the financial assistance promised by these federal packages.
We will continue to monitor updates and keep our audience informed of the latest news. The impact that evictions could have on the residential market is still unknown; however, change will be inevitable once the moratoriums end.
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