In a surprise move that could head off a national wave of residential evictions, the CDC used its powers today to ban evictions of homeowners or renters in areas on mortgage or rental payments until the end of 2020 so long as they can certify they have no other housing options. It only benefits individuals with annual income of under $99,000; those who received the stimulus checks authorized by the CARES Act earlier this year should quickly qualify.
This represents the CDC’s response to a presidential order from August 8 asking that the agency and HUD to look into ways to protect those exposed by the expiration of the CARES Act’s ban on evictions involving federally assisted housing. HUD responded by extending to the end of the year an eviction ban on certain FHA-guaranteed single-family homes (mostly non-rental properties). Now a much more sweeping action by the CDC is rationalized as a step to keep newly homeless people from spreading COVID-19. As the New York Times explains, it’s a pretty big if very temporary deal:
U.S. Treasury Secretary Steven Mnuchin told a U.S. House of Representatives panel earlier the measure was to ensure people “don’t get thrown out of their rental homes” as a result of the coronavirus pandemic.
Mnuchin said the actions affect about 40 million renters. He said Congress should still approve rental assistance.
This last reference is to a provision supported by renters and landlords alike that would give federal assistance to the former in order to pay the latter. $100 billion for this purpose was included in the Democratic HEROES Act proposal that passed the House in May, though no Republican stimulus proposal has included it and it’s unlikely any stimulus deal will be struck before the end of the fiscal year a month from now.
The CDC moratorium temporarily stops evictions, but does not relieve renters (or affected homeowners behind on mortgages) of their obligations. So when the moratorium expires, landlords could be lined up to quickly execute evictions unless back rent is immediately paid. The CDC order defers to states that have more generous residential protections, though it may take a while to sort out where that deferral will apply (e.g., in California, whose legislature just passed an eviction ban through the end of January 2021, with some relief for back rent but a requirement beginning today that renters pay 25 percent of scheduled payments).
The action will please renters, particularly in the 34 states with no eviction moratorium in place (many had one that has expired like the federal moratorium). But as Axios notes, landlords will be furious:
Experts say that failing to compensate landlords who are no longer receiving rent payments could cause a “massive destabilizing effect” in housing markets, according to CNBC.
The action may face legal challenges from landlords who have seen rental income decrease from the pandemic, according to Bloomberg.
For now, it’s a rare aggressive relief measure by the Trump administration, but one whose benefits will ultimately rely on quick progress to fully bring the pandemic under control.