What the New Federal Eviction Moratorium Means

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The Trump administrationannounced a sweeping federal eviction moratorium on Tuesday, offering protections for struggling renters that go far beyond the previous 120-day moratorium that expired in July. Under the authority of the Centers for Disease Control and Prevention, the administration issued a four-month ban on evictions in order to keep millions of tenants in place in the hopes of preventing the spread of coronavirus.

Under the terms of the new edict, tenants earning no more than $99,000 (or $198,000 jointly) may receive this protection, which takes effect Sept. 4 and lasts through Dec. 31. Qualifying renters will need to present their landlords with a written declaration testifying to their circumstances. Property owners who defy the moratorium are subject to criminal penalties.

The order comes as a relief to housing experts who predicted that the lapse of the CARES Act moratorium in July would unleash atorrent of evictions. Still, even as they praised the federal action, tenant attorneys and advocates also sounded a note of caution: If Congress does not take steps to provide another round of emergency aid, a ban on eviction filings only delays the inevitable.

“It covers the vast majority of renters who are on the verge of losing their homes,” says Diane Yentel, president and chief executive officer of the National Low Income Housing Coalition. “It’s a half-measure. Rent is still due. Rent is still owed.”

The first federal eviction moratorium, which Congress signed into law with the CARES Act, covered about 30% of renters, namely those living in properties with federally backed mortgages, insurance, or subsidies. Many states and cities passed their own eviction bans to bridge the gap, leading to a confusing patchwork of protections. This CDC moratorium covers a broad spectrum of renters who can self-certify that they are struggling, a number that may reach into the tens of millions.

The new moratorium flows from anexecutive order signed by President Donald Trump last month that directed the secretary of the Department of Health and Human Services and the director of the CDC to weigh whether any measures to stop evictions are necessary. By itself, the president’sAug. 8 executive order did not block any evictions. Over the course of the last month, the White House neverthelesspointed to the order repeatedly as an illustration of decisive action taken by the president to curb the damage done by the pandemic.

This new moratorium was issued without any such Trumpian fanfare, drawing its authority not from the Resolute Desk but from anobscure code that allows the CDC to enact measures over states to prevent the spread of communicable diseases. This workaround could be a sign of the peril for the White House in standing between tenants and their landlords.

“I think the new CDC moratorium is likely to face strenuous attack in court by landlord interests,” says Dana Karni, managing attorney for the nonprofit Lone Star Legal Aid. “The delay to start protections until Sept. 4 coupled with relative silence from the White House is very curious.”

Indeed, some landlords and property groups erupted in frustration on Tuesday over the news of the moratorium. While rental property owners have argued consistently in favor of rent relief from Congress, they say that eviction bans shift the burden of the pandemic onto landlords. Property taxes, payroll, summer utilities and maintenance bills are mounting for landlords who have seen their collections dip since March. Lawsuits are likely to follow: Landlord groups have sued governors or mayors over eviction moratoriums in at least six cases so far. (None have succeeded.)

“Quite frankly, I fear that this eviction moratorium is nothing more than a political attempt by the president to shore up a few more votes come November,” says Craig Gambardella, a partner at Kucker Marino Winiarsky & Bittens, a New York real estate practice.

Daniel Kattan, co-founder and managing partner of PIA Residential, a private equity real estate firm based in Miami, says that corporate landlords are not likely to suffer under the moratorium, because institutional investors are better equipped to weather a short-term downturn. He is still bullish on rental properties: PIA owns 224 apartment units in Pensacola and about 120 units in the Greater Miami area, and the company is looking to buy a 284-unit building in Jacksonville. Kattan says that he worries about mom-and-pop landlords, though. Investors who own a handful of properties account fornearly half of all rental units nationwide and74% of small apartment buildings. Individual owners lack the cash reserves to weather the storm.

“In the long term, this eviction moratorium will, unfortunately, create a lot of distressed properties for landlords that cannot pay their mortgages,” Kattan says. “For us, it will be an opportunity to buy more.”

Advocates are quick to point out the flaws in the prior federal moratorium. In most jurisdictions, it fell on tenants to go to court to demonstrate that they were subject to pandemic eviction protections. Ultimately, the moratorium did not stop landlords from filing evictions illegally. For example, in Houston — a place with historically high eviction rates and no state protections —more than one in five eviction filings in Harris County violated the CARES Act moratorium, according to researchers at the South Texas College of Law Houston.

But the new CDC moratorium has teeth. Landlords who violate the ban will be subject to penalties ranging from $100,000 to $500,000 in fines and one year in jail. Experts hope that the prospect of fines or incarceration will dissuade landlords from using lockouts, intimidation or other illegal tactics to evict. A July survey of legal aid and civil rights attorneys across 38 states conducted by the nonprofit National Housing Law Project found that 91% of respondents reported illegal evictions in their area. “Overall, if enforced, this should help stem the increase in eviction filings, particularly in areas where a state or local moratorium expired,” says Deborah Thrope, deputy director for the National Housing Law Project.

Some of the details of the new moratorium will be sorted out by courts. Stronger state eviction bans like themoratorium that California Governor Gavin Newsom just signed into law, which extends through January, supercede the new federal moratorium. Landlords can’t evict qualifying tenants for nonpayment of rent, but they could evict under another pretext. As the Mercatus Center’s Salim Furth puts it, “Non-payment is easy to document. But with this policy, landlords can bring an action over your pit bull or your unauthorized girlfriend or your midnight accordion practice.”

Self-certification of distress could be a sticking point. Under the new eviction ban, it falls on tenants to prove to their landlords that they can’t pay — specifically, that they’ve lost income or suffered extraordinary medical expenses, that an eviction would put them on streets, that they will still make partial rent payments, and that they have exhausted their efforts to find government aid. Such a declaration may not be too big an ask for tenants, especially if housing advocates can put some templates into circulation, according to Donald Moynihan of the McCourt School of Public Policy at Georgetown University. But stressed-out tenants have to know that the option is available to them.  

“The major burden comes from learning costs,” Moynihan says. “Will people know about this new policy? Even a useful tool will not have much effect if the people you are hoping to use it are unaware of it.”

It’s unclear how many evictions the new CDC moratorium will prevent. By one analysis,some 29 million Americans were at risk of eviction before the end of the year. Those tenants will still be in jeopardy come January, if the economy has not recovered and if Congress has not passed any additional rental assistance. Billions in emergency aid under the CARES Act plus the $600 per week federal boost to unemployment benefits have carried millions of households: Even in states where housing court is back to business as usual, an anticipated “tsunami” of eviction filings has so far failed to materialize.

Without future aid, renters will continue to stretch their budgets to meet their obligations.The rent eats first, and struggling tenants are turning to unsustainable solutions: taking out loans, paying by credit card, scrimping on prescription medications or school supplies, even skipping meals. When Congress returns to work on Sept. 8, Yentel says, rental relief needs to be at the top of their legislative priorities.

“Renters are running out of options.”

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