The CDC's Eviction Moratorium Threatens Landlords With $100,000 Fines, a Year in Jail for Noncompliance

The Trump administration is pushing the envelope of its executive authority by issuing a new blanket eviction moratorium for all rental properties nationwide.

The Trump administration is again pushing the envelope of its executive authority by issuing a new blanket eviction moratorium that applies to all rental properties nationwide. The order, published Tuesday, is a dramatic expansion of the now-expired eviction moratorium passed by Congress in March, and could potentially impose heavy criminal penalties on landlords for attempting to remove non-paying tenants from their properties.

According to the order advanced by the Center for Disease Control and Prevention (CDC) yesterday, tenants earning up to $99,000 ($198,000 for joint filers) cannot be evicted for not paying their rent provided they tell their landlord in writing that they've made all efforts to obtain government assistance, have lost income or received extraordinary out-of-pocket medical bills, and that their eviction would force them into homelessness or into a crowded living situation.

Landlords could still be able to evict tenants who engage in criminal activity on the property, or who pose a risk to public health or safety. Property owners who do move to evict a tenant in violation of the CDC's order could be subject to fines of $100,000 and a year in jail.

The order will go into effect this Friday and is set to expire at the end of the year. It supersedes any less restrictive state or local limits on evictions but does not preclude jurisdictions from passing more sweeping moratoriums.

The CDC order goes far beyond the federal eviction mortarium passed as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March. That congressionally authorized policy only covered the 28 percent of multifamily residential units with a federally backed mortgage. It expired at the end of July.

Housing advocates who've long pushed for a universal eviction moratorium in response to the COVID-19 pandemic cheered the CDC's emergency order as an encouraging first step.

"A uniform, national moratorium on evictions for nonpayment of rent is long overdue and badly needed," said Diane Yentel, president and CEO of the National Low-Income Housing Coalition in a statement, while cautioning that "this action delays but does not prevent evictions"

That's because the CDC's order does nothing to forgive tenants of the obligation to pay rent, it only delays the ultimate remedy landlords can seek for nonpayment until January. Once this emergency eviction moratorium expires, tenants would be on the hook for all that back rent.

Yentel says that Congress needs to follow through with an additional $100 billion in rental assistance. House Democrats have passed multiple bills providing for that rent relief, but none have been taken up by the GOP-controlled Senate. So far, the Trump administration has only committed to redirecting existing housing funds toward preventing evictions and homelessness.

Landlord groups have also expressed opposition to a federal eviction moratorium that comes without any additional rental assistance.

"Without direct rental assistance, rents cannot be paid, and owners face a financial crisis of their own by not being able to maintain properties and pay their mortgages or property taxes," said Bob Pinnegar, president and CEO of the National Apartment Association, in a statement. "This action risks creating a cascade that will further harm the economy, amplify the housing affordability crisis, and destroy the rental housing industry."

The number of people paying their rent has stayed remarkably steady during the coronavirus pandemic. The National Multifamily Housing Council's (NMHC) rent payment tracker (which covers mostly higher-end properties) reports that 92 percent of tenants have paid at least some of their August rent, compared to 94 percent in August 2019.

Rent collection is down much more at lower-end units and in areas harder hit by the pandemic.

New York City's Community Housing Improvement Program (CHIP), which represents smaller landlords and owners of rent-stabilized units, reports that 17 percent of residential tenants at its members' buildings had not paid any August rent by the middle of the month.

The problem of higher non-payment rates is compounded by skyrocketing vacancy rates, says CHIP Executive Director Jay Martin. A late August survey of CHIP members reported a vacancy rate of nearly 11 percent, up from 3.4 percent in February.

"Moving companies are literally turning people away because they are too booked to move people out of the city," says Martin. "From a landlord's perspective, would you want more vacant units? What our owners are trying to do is work out payment plans with their current tenants. 'You can't pay a full month's [rent], I'll take a half month's [rent].'"

The fear of vacant units helps explain why eviction rates are below historical averages in most cities we have data for, even after the expiration of federal aid programs and state and local eviction moratoriums.

Evictions in Houston, whose moratorium expired in May, are 62 percent below the historic average this month, according to data from Princeton University's Eviction Lab. It's a similar story in Kansas City, Missouri, and Cincinnati, Ohio, where eviction filings are 46 percent below average. Moratoriums covering those cities expired at the end of May.

Milwaukee, Wisconsin—which saw eviction filings surge to 17 percent above average after its moratorium expired in June—is now seeing eviction rates drop to about 42 percent below the historic average.

The CDC's order on Tuesday nevertheless points to the potential for mass evictions as a justification for its sweeping moratorium.

"In the absence of state and local protections, as many as 30–40 million people in America could be at risk of eviction. A wave of evictions on that scale would be unprecedented in modern times," reads the order, citing a higher-end estimate from the Colorado-based COVID-19 Eviction Defense Project. "A large portion of those who are evicted may move into close quarters in shared housing or…become homeless, thus contributing to the spread of COVID-19."

The absence of this wave/tsunami/avalanche of evictions draws into question the need for such a sweeping federal moratorium, says Salim Furth of George Mason University's Mercatus Center.

"Data so far show no indication of a heightened rate of evictions. By acting prematurely, the administration is putting a heavy financial burden on housing providers and setting an unwise precedent," Furth says. "Lighter-touch approaches, such as limiting the number of evictions, could prevent an (unlikely) homelessness emergency without impinging so drastically on private contracts."

The lack of a mass evictions wave could undermine the already shaky legal justification for Tuesday's emergency order.

The CDC is resting the legal authority for its temporary eviction moratorium on a section of the Public Health Service Act and related federal regulations which give the agency's director the power to take any measures he or she deems "reasonably necessary" to prevent the interstate spread of communicable disease, including "inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of animals or articles believed to be sources of infection."

Those specific actions, Josh Blackman notes at the Volokh Conspiracy, "are localized, and limited to prevent the spread of an infection in a single building or location. None of these examples are even remotely close to a nationwide moratorium on evictions." The CDC's eviction moratorium, he concludes, "is far beyond the scope of delegated authority."

Even if one were to read federal regulations so broadly as to give the CDC director the potential power to issue a nationwide eviction moratorium, the fact that evictions are below historic averages could undermine the argument that the policy is "reasonably necessary" to prevent the spread of the pandemic.

Legal or not, the CDC's eviction moratorium is an excellent example of how a patchwork of extreme, temporary policy interventions intended to stem the coronavirus pandemic has created a self-perpetuating justification for expanding government power across the board.

Just as lockdown orders morphed from extreme, temporary expediencies to the government's main tool for suppressing the pandemic, so too have emergency halts on evictions become the government's primary, increasingly permanent means of keeping people housed.

Over time, the economic damage and mass unemployed caused by a prolonged pandemic and continually extended shelter-in-place orders have fueled justifications for extending and expanding eviction moratoriums. After all, how can someone be expected to pay the rent if they aren't legally allowed to work?

Now a federal eviction moratorium covering all rental properties is being justified as necessary to ensure compliance with shelter-in-place orders. Eviction moratoriums "allow State and local authorities to more easily implement stay-at-home and social distancing directives to mitigate the community spread of COVID-19," reads the CDC's order.

This new eviction moratorium will almost certainly attract legal challenges. A successful challenge will likely spur calls for a more permanent federal policy.

Tuesday's order ratchets up the government's power in a way that won't be easily undone.