Why the overturned eviction moratorium may be too little, too late for both renters, landlords
The Supreme Court’s decision last week to strike down the pandemic-era eviction moratorium may arrive too late for many struggling independent landlords, even as it appears to heighten the risk of eviction for tenants behind on their rent.
Thursday’s decision by the U.S. high court found that the Centers for Disease Control and Prevention (CDC) lacks authority under federal law to impose an eviction ban, which was set to expire on October 3. The court stressed that Congress, rather than the CDC, must specifically authorize an eviction policy.
"The federal eviction moratorium was a lifeline for millions of families, the last remaining federal protection keeping them safely and stably housed throughout the pandemic," Diane Yentel, president and CEO of the National Low Income Housing Coalition said in a statement to Yahoo.
"The tragic, consequential, and entirely avoidable outcome of this ruling will be millions of people losing their homes this fall and winter, just as the Delta variant ravages communities and lives," Yentel added.
At least half a dozen states, including New Jersey, California, New York and Washington, have policies in place to protect renters to help keep families in their homes.
“You just can't flip a switch and evict people,” said Paul Getty, CEO of First Guardian Group, a real estate investment and broker firm. The eviction process could take up months because of the backlog and the court systems, he explained.
“You still need a legitimate case to do that. It's very problematic,” Getty told Yahoo Finance.
However, the ruling doesn’t mean renters in states without protections will be immediately removed from their homes — an outcome that appears all but certain to prolong the pain for “mom and pop” landlords struggling with mounting costs, some of whom haven’t been paid by tenants in over a year.
While eviction filings are expected to ramp up, it is unclear how quickly already backlogged courts can process new filings, or how effective the remaining patchwork of state and local protections will be in keeping renters in place until they secure rent relief.
Is the government going to now pay me $70,000 that they stole from me? I doubt it.
James Bathgate, a landlord in California
Although ample federal relief is available, the Treasury Department said recently that barely 10% of the $47 billion allocated for tenant relief has actually been distributed, with states and localities struggling to dole out the money amid insufficient infrastructure and overwhelming demand.
Meanwhile, many struggling renters were hoping to receive emergency rental assistance from the government to pay back their rent and remain in their homes. However, applying for assistance has been challenging for tenants and landlords alike.
Organizations like the National Low Income Housing Coalition and the Consumer Financial Protection Bureau have set up tools to help renters apply for assistance.
A recent survey of renters by the U.S. Census Bureau found an estimated 11.4 million were behind on rent as of early July. The pause on evictions provided a critical backstop in ensuring renters could stay in their homes until relief money was received.
To that end, the White House announced new steps to help renters and landlords hit by the pandemic. That includes help from the Treasury Department to reduce documentation requirements for hundreds of thousands of emergency rental assistance applicants.
The department has also warned state and local governments they could lose funding to jurisdictions doing a better job of providing relief payments to at-risk renters and landlords.
Some landlords, however, slammed the lifting of the ban describing it as “too late.” Many independent property owners have been swamped by rising costs associated with taxes, insurance, utilities and upkeep, even as tenants have gotten government lifelines.
“We're already been forced to sell our house so it doesn't help us,” James Bathgate, a landlord in California, told Yahoo Finance in an interview.
“I do feel sorry for the thousands of other mom and pop landlords, many of whom are retired and living on fixed incomes, just like us and rely on rental income for their retirement,” Bathgate said. “If they've been able to hold out, hopefully they can now survive.”
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