Coronavirus

Eviction Moratoriums Are Transforming From Emergency Stopgaps to Permanent Programs

A growing number of states are enshrining eviction moratoriums into laws that won't expire until well into next year.

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Emergency eviction moratoriums were some of the first policies enacted to deal with the COVID-19 pandemic. They could end up outlasting it.

On Monday, New York Gov. Andrew Cuomo signed a bill that will stall most eviction proceedings for 60 days and impose a moratorium on evicting residential tenants who make a declaration of COVID-related hardship until May 2021.

The new law, which goes into effect immediately, also puts a moratorium on foreclosure proceedings through May for property owners with 10 or fewer units who make a similar hardship declaration. It also prevents local governments from seizing homes for unpaid taxes.

"This law adds to previous executive orders by protecting the needy and vulnerable who, through no fault of their own, face eviction during an incredibly difficult period for New York," Cuomo announced in a statement. "The more support we provide for tenants, mortgagors and seniors, the easier it will be for them to get back on their feet when the pandemic ends."

Cuomo issued his first executive order in this area in March, with a measure barring residential evictions and foreclosures for 90 days. Since then, the governor has enacted nine more executive orders extending and modifying these protections.

In June, he signed the Tenant Safe Harbor Act, which prevents tenants from being physically evicted for nonpayment of rent so long as Cuomo's other executive orders restricting business activities and nonessential gatherings remain in place. The bill signed by Cuomo this week goes further, by preventing landlords from even filing for evictions and staying ongoing eviction proceedings for the next five months.

Landlord and tenant groups are typically on opposite sides of the eviction moratorium debate, but they have offered near-identical criticisms of the new law, calling it a temporary band-aid that does nothing to address the back rents tenants have accumulated or the financial hardship landlords have experienced.

"This bill is a stall tactic," argued Jay Martin, executive director of a landlord association called the Community Housing Improvement Program, in a statement. "Closing the courts for a few months will not relieve the massive debt that tens of thousands of renters face, or provide any financial relief to the hundreds of housing providers who have provided safe, clean homes to millions of New Yorkers."

"This bill is only a temporary solution to the urgent housing crisis we find ourselves in," Housing Justice for All, a coalition of left-wing housing advocacy groups, told Politico. "In order to prevent massive economic disaster, our legislature must clear the back rent owed by New Yorkers and create a hardship fund for small landlords struggling to keep their buildings safe and afloat."

New Yorkers will owe $435 million in back rent by January, according to a database maintained by the National Council of State Housing Agencies. The state is slated to receive $1.3 billion in federal emergency rental assistance funds.

The Empire State's new law is part of a trend. Eviction moratoriums initially imposed by state governors as an emergency pandemic measure are now morphing into more permanent, legislatively approved programs aimed at mitigating the epidemic's economic fallout.

A day before the enactment of New York's law, President Donald Trump signed a relief bill that extended an eviction moratorium originally issued by the Centers for Disease Control and Prevention (CDC) through the end of January. (It had been scheduled to expire today.)

Earlier this month, Oregon lawmakers voted to extend their state's eviction moratorium until June 30. California legislators, who in September passed an eviction moratorium for tenants who have paid at least 25 percent of their rent, are mulling a proposal to extend that policy through the end of 2021.

Imposing eviction moratoriums by executive fiat, as many governors have done, has always been legally dubious, and sparked more than a few lawsuits challenging them on separation of powers grounds. So it's good, at least, that these policies are increasingly being enacted by legislatures.

That said, by passing eviction moratoriums into laws, officials are doubling down on a very blunt tool that comes with some unpleasant side effects and unintended consequences.

The most persuasive case for eviction moratoriums is that they prevent newly evicted people from moving in with family, friends, or into overcrowded homeless shelters, spreading coronavirus along the way. As vaccinations ramp up, causing COVID deaths and severe COVID cases to decline, that justification will become less and less convincing. Instead, moratoriums become a means for the government to provide free housing at landlords' expense.

That's obviously bad for property rights and for property owners who have their own operating costs to cover, and who are often put in the position of having to keep nonpaying tenants while turning away prospective renters who would pay their bills.

And despite the concerns of housing advocates that any lifting of moratoriums will result in a wave of evictions, landlords have every incentive to work out arrangements with otherwise good tenants who've fallen behind on the rent. The alternative is to risk a vacancy and a long search for a more reliable occupant during an economic downturn.

"Data so far show no indication of a heightened rate of eviction," Salim Furth of George Mason University's Mercatus Center told Reason in September. "Lighter-touch approaches, such as limiting the number of evictions, could prevent an (unlikely) homelessness emergency without impinging so drastically on private contracts."

Some cities did see spikes in evictions in the late summer and early fall, after the early moratoriums were allowed to lapse. But those bumps can plausibly be explained by the moratoriums themselves, which led evictions that would have been filed over the course of several months to happen all at once.

Maintaining eviction moratoriums well into 2021 could well cause the oft-predicted eviction "tsunami" that the policy is intended to prevent.

With any luck, the vaccination effort that's beginning this month will soon allow us to return to something approaching normal life. That return to normality isn't helped by enshrining emergency policies into law.

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  1. Do landlords get a moratorium on their mortgage payments?

    1. Yes jeff it’s called Chapter 11.

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      3. Why would a small landlord file Chapter 11? I think you have large landlords (large businesses) confused with small landlords that are often in the business because of the last housing downturn and being upside down on their mortgages, or inheritance. Also, banks are not interested in the legal costs of Chapter 11 on collateralized loans except when there are larger sums that have been lent, and their bottom line is significantly at risk.

        Small landlords will just foreclose, let the bank have it back. Then the landlord’s credit is ruined, the tenant is homeless and the neighborhood is a hovel for squatters, gangs and drugs because the property is vacant. But thanks for your deeply uninformed one liner, and in answer to Jeff’s question, yes, we still have to pay our mortgages, they are commercial loans, not government backed residential loans like you have on your primary residence.

      4. I was a landlord (one property – a single family dwelling) for about ten years. We (my wife and I) were fortunate that the property was rented out most of the time and we had pretty good tenants. Having said that – because we had a mortgage on the property, having a months-long pause in receiving rent payments would have been a problem. We would have been able to keep up with mortgage payments – but I am skeptical a significant percentage of tenants pausing on rent during the moratorium are going to ever catch back up. Many landlords are never going to recoup the lost rental income.

    2. Not the ones that own their properties outright. That’ll teach ’em to avoid the risk of leveraging debt. See also: student loan forgiveness.

      (More directly to your question, I think it’s only FHA/USDA mortgages that are under a foreclosure moratorium)

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      2. Even if you do own your property outright in most cases the mortgage is only a small portion of the costs of maintaining a property. If the tenant is not paying making your income for the property ZERO you still pay heat, water, sometimes electricity, rental licensing fees, maintenance (including broken windows and screens and doors, HVAC replacements and service, new plumbing and electrical fixtures and upgrades, appliance replacements and repairs, these are not upgrades to the property just constant investments into properties tenants do not care for properly), taxes, insurance, snow removal, lawn care, City clean-ups and assessments, administrative costs, legal costs etc. ad infinitum.

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  3. Vote for fascists, get fascism; whodathunkit.

  4. So, who needs properly maintained rentals anyway? If landlords can’t get anything like a predictable income, they will start to control costs by cutting back on little things like plumbing and heat.

    1. Then they will be concidered slum lords and have their property seized by the state. This has already happened and I’d the end goal

  5. My house has a permitted apartment. It’s not going to be rented out any time in the near future. I don’t depend on rent to pay my mortgage and the rent I could ask for doesn’t make up for the risk of a bad tenant I can’t get rid of. I’m going to wait until the eviction “moratorium” is over AND the state legislature has decisively rejected calls for rent control. In the meantime, my relatives have a nice place to stay if they want to visit (travel restrictions and health permitting).

  6. Shouldn’t it be moratoria?

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  7. Very clever, this closet socialism, coming out in Compassion Drag.

    People who can’t be evicted for not paying rent get “free” housing at the expense of others.

    Expect more like this:
    No repo’s on cars for lack of payments.
    No need to dash after dining without funds (once our betters let us go to restaurants again).
    No need to hide what you are shoplifting.

  8. The solution to bad, totalitarian policies should not be bad, socialist welfare.

    Repeal. Reform. Rethink.

  9. The other aspect of this issue that I haven’t heard mentioned very much is the fact that eviction moratoriums create a scenario where landlords can’t easily sell their property as well. While there doesn’t appear to be any moratorium on selling investment properties, what right-minded potential buyer/investor is going to purchase a single residence home to either live in themselves or as an investment property if it’s currently occupied by someone who isn’t paying rent and can’t be evicted.

    As such, the impact on property owners regarding eviction moratoriums is significantly greater than what is routinely discussed. Property owners have also effectively lost their ability to dispose of their property in a way that benefits them, or at least minimizes their losses, in anything that resembles a reasonable time frame.

  10. Follow the government playbook… This is simply another method for government to essentially take ownership of private property. They enable withholding of rents thus creating huge debt for landlords. Later, they will contrive a scheme to pay them back (on taxpayer’s dime of course) as long as they adhere to whatever dictates/caveats the government chooses to append to the payment (e.g. affordability/rent control, inclusiveness, targeted groups, etc.). Alternatively, they force property owners into bankruptcy and seize the property for the State.

    1. That is almost exactly the content of Ilhan Omar’s bill for Rent and Mortgage Cancellation back in April. All rent payments cancelled. Then the Lessor could provide for relief from the federal government (from the financial calamity they caused) only if the property owner agreed to a 5-year basket of restrictions including: rent freeze, no background check of criminal or credit history for new tenants, and no right to sell the property until after HUD provided 60 days for housing agencies and other non-profits to buy it first.

      1. I’m in that dipshit’s district, she signs all of her emails ‘In Solidarity.’ Between her and the Minneapolis City Council and our idiot AG they have quite literally destroyed the City. It was a beautiful, bustling place a few years ago. Now it is a burned down, decrepit slum with hundreds of shootings, carjacking, parks occupied by drug addicts. Everyone is leaving, I already have half of my portfolio for sale. All the businesses in the City are leaving too. A very real time example of how 15 or so ideologues that know nothing except their ‘good intentions’ can truly destroy a beautiful City, people’s livelihoods and the value of their investments.

        What in the F#$% does Ilhan Omar know about the housing market? She has a BA in political studies from North Dakota State University and has no business experience whatsoever. And she has been proven to have married her brother for papers and kicked back millions of campaign donations to her husband. Please, Ilhan, show us how the world should work. The only people worse than her are the idiots that voted for her.

  11. This violates equal protection under law, of course, as it treats landlords as second class citizens with no protections from the courts for the contracts they have entered into. But the upside for the Marxists is that the commercial real estate market becomes that much easier to overtake. And soon they will have healthcare, education, energy, small businesses, and commercial real estate at the mercy of the government. SUCCESS!
    All it took was Event 201: https://sociable.co/government-and-policy/timeline-great-reset-agenda-event-201-pandemic-2020/

  12. “We made it legal for people to squat in your properties without paying rent, but don’t worry, we also made it illegal for you to get foreclosed on!”

    Gee, thanks, I guess we’re even…

  13. Eviction Moratoriums Are Transforming From Emergency Stopgaps to Permanent Programs

    Mask Mandates Are Transforming From Emergency Stopgaps to Permanent Programs

    Lockdowns Are Transforming From Emergency Stopgaps to Permanent Programs

    Business Closures Are Transforming From Emergency Stopgaps to Permanent Programs

    Block-Long Lines Are Transforming From Emergency Stopgaps to Permanent Programs

    TP Rationing Is Transforming From Emergency Stopgaps to Permanent Programs

    I’m sure there’s more; let’s just say when you give tin-pot dictators power, expect the worst.

  14. My wife and I owned a rental house in CA which fortunately we sold two years ago. We could not have handled having a tenant pay no rent for an extended period of time.

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