Nondelegation

CDC Eviction Moratorium Extended Again

The latest extension, which is expected to the be last, runs until July 31. Meanwhile, the legal battle over the moratorium will continue. And the plaintiffs' position is likely to be strengthened by the Supreme Court's recent ruling in Cedar Point Nursery v. Hassid.

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Earlier today, the Centers for Disease Control extended its nationwide eviction moratorium order until July 31 (it would otherwise have expired on June 30). The Washington Post reports that this is intended to be the final extension of a moratorium that was first instituted by the Trump administration, and then revived and extended under Biden:

The Biden administration on Thursday extended the nationwide ban on evictions for a month to help millions of tenants unable to make rent payments during the coronavirus pandemic, but said this is the last time it plans to do so.

Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, extended the evictions moratorium from June 30 until July 31. The CDC said "this is intended to be the final extension of the moratorium."

A Biden administration official said the last month would be used for an "all hands on deck" multi-agency campaign to prevent a wave of evictions. One of the reasons the moratorium was put in place was to prevent further spread of COVID-19 by people put out on the streets and into shelters.

The legality of the CDC eviction moratorium has been challenged in court in multiple cases, and has so far been the subject of eight rulings by federal trial and appellate courts, five ruling against it and three in favor. I have written about these cases and the issues they raise in numerous previous posts, including here, here, and here. From the start, my view has been that the order is illegal, and that upholding it would set a very dangerous precedent. For what it's worth, I said that when the order was first enacted under Trump, and I have continued in the same vein since Biden revived it.

This new extension of the order ensures that the legal battle over the moratorium will continue. But perhaps not too much longer. If this really is the final extension, the litigation might end before many additional court decisions come out, and almost certainly before the issue gets to the Supreme Court. It's possible that the administration seeks exactly that outcome, because - if present trends continue (with most conservative judges voting to strike down the order and liberal ones to uphold it) - a trip to the Supremes might result in an embarrassing defeat for the administration and the CDC.

Meanwhile, the Supreme Court's recent ruling in Cedar Point Nursery v. Hassid opens up a new possible line of attack for plaintiffs challenging the legality of the moratorium. And this one could continue even after the moratorium ends.

Up until now, most cases challenging the order have not even raised the argument that it violates the Takings Clause of the Fifth Amendment. Those few who did raise it had no success.

A key reason why such claims faced bleak prospects is that Supreme Court precedent made it very difficult for property owners to prevail in a takings case if the government imposed a merely "temporary" physical occupation of their land. It was often difficult to tell the difference between a temporary occupation and a permanent one. But the CDC had a strong argument that the eviction moratorium was temporary, because each successive extension of the order included a specific time limit, generally only a few weeks in the future.

 Cedar Point changes that. Now, at least a as a general rule, "a physical appropriation is a taking whether it is permanent or temporary." This makes potential takings challenges to the CDC order much stronger. A moratorium on evictions in situations where the property owner would otherwise have a right to remove the tenant pretty clearly imposes at least a temporary physical occupation against the owner's will. And the federal government isn't paying "just compensation" to affected landlords, as the Takings Clause requires.

Even after Cedar Point, the CDC can still make various arguments claiming there is no taking here. I will likely have more to say about that in future posts. But, at the very least, there is now a much stronger takings claim than before.

I expect more plaintiffs to raise this issue. And such takings claims might continue even after  the moratorium expires, because the plaintiffs can still seek compensation for the period during which eviction was delayed while the moratorium was in effect.

Whether they can actually get any substantial sum if they prevail is a different question. Courts could conclude the landlords suffered only very modest financial losses, and thus deny more than minimal compensation. Nonetheless, the takings issue here deserves close attention, and I hope to write about it further in the near future, especially if it becomes a bigger part of the legal battle over the eviction order.

NOTE: The plaintiffs in some of the lawsuits against the eviction moratorium are represented by the Pacific Legal Foundation, where my wife works (though she is not part of the litigation team handling the issue). I myself have played a minor (unpaid) role in advising PLF on this litigation.

NEXT: Recapping Wednesday's Cases, and Predicting the Remaining 8 Cases

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  1. The eviction moratoriums were maybe, and I really mean maybe, justified in the beginning of the pandemic. But by June or July of last year, when it was evident that there were not going to be body bags lining the streets, that was really the end of the justification of such a vast, sweeping economic regulation. And, most landlords, corporate and private, I know were fine taking the hit of a few months worth of rent. "Cost of doing business" is what one guy I know chalked it up as. But the line is really drawn after about three months and now we are 16-17 months into this "emergency."

    The end result is the cost of housing is going to go way up. All the people who didn't pay rent for more than a year don't have that money. They didn't put it away in a savings account waiting for the day they might have to repay some of it. They either didn't have it or spent it on other life priorities. The thought that people are just going to write their landlord a check for a year of rent next month is simply laughable.

    These landlords are going to need to make up the loss. Most have mortgages and overhead that have been deferred for the same amount of time which will be coming due. You can only skimp so much on property maintenance also. Point being the losses are going to be substantial and will need to be made up for with future revenue.

    Already in my area market rents are about 25% higher than their 2019 equivalent and that is even if you can find a unit. I imagine once evictions start going through the supply is going to stabilize a bit more but the cost is still going to go up-and-up. Many landlords now want two months security deposit instead of the the one since they got burned so hard and for a person living paycheck to paycheck that added amount to simply enter the rental market is a substantial hurdle. Point is this is going to be messy for the next few years and I don't know how we get out of it without a huge mess.

    Of course, liberals will tell us we need rent control, but I don't need to remind people who lived through those days about how that went....

    1. First and foremost, there are state laws which preclude having a security deposit in excess of one month's rent -- landlords may ask for more but it will come back to bite them when they ask the wrong person for it.

      Above and beyond that, *when* the landlords finally manage to evict these deadbeats -- and that inevitably will be some time after the end of the moratorium -- whom, exactly, do you think will be agreeing to pay these higher rents?

      I wish the landlords the best of luck, but I expect to see the rental rates to plummet when all of this supply comes onto the market -- it isn't like those who are evicted are going to have the money or credit rating to rent somewhere else, so whom are folks planning to rent to???

      And then when the foreclosure moratorium ends, there is going to be a bleepload of properties on the market which means that those who have the money and credit rating to rent likely will buy instead....

      Property management is a business, investing in rental property is an investment. While it has been fairly lucrative for the past 40-60 years, it hasn't always been and won't necessarily always be in the future.

      1. Not every state or locality has such a law. Many do, most don't though. Or if they do it is then fine to for the landlord to require prepayment of a certain number of months. Or around here what they are doing is giving you the "last two months free" but just accelerating those rent payments during the first 10 months. Default within those and you still technically owe the amount.

        It isn't that people don't ever have the money. It is they don't have the money right now. Big difference. Once the UC runs dry here at the end of the month and people are forced to get jobs, especially with the high wages employers are paying now, they will eventually get the money. And, when the paychecks start rolling in they are going to want to get their own place again. I suspect there will be a lag in supply/demand but it isn't going to last too long. People need places to live and you can only do the multi-generational household or couch surfing thing for so long. These people are going to be setting up homeless encampments. They are going to move to temporary housing, save their money for a few months, then get back into the market.

        The big thing around here is landlords just getting out of the rental business altogether. There is a neighborhood close to me that used to be around 50% rental. Nice houses on the edge of a really good school district. That is where all the for sale action is because the landlords are cashing in on the market and don't need the hassle of having a tenant anymore. So when all these renters are looking for housing in the Fall there is just not going to be as much (or maybe not as much in the nicer areas of town) which is going to drive up the price.

        Ultimately though it will be the chumps who actually paid their bills that get hosed. They are the ones that won't qualify for the CA "free rent" and who cares about your credit score if the state bans landlords from checking that. There is almost no incentive these days in being a "good citizen" so why even bother. Just increases your overall cost of living and denies you the ability to have disposable income.

    2. "Jimmy the Dane
      June.24.2021 at 5:07 pm
      The eviction moratoriums were maybe, and I really mean maybe, justified in the beginning of the pandemic. But by June or July of last year, when it was evident that there were not going to be body bags lining the streets, that was really the end of the justification of such a vast, sweeping economic regulation."

      I will concur with the comment "maybe" but only in the early stages - "maybe" based on what was known at that time.

      Based on what is now Known
      1) The effectiveness of the eviction mortatorium on slowing the spread was very minimal at best. The evicted or non evicted person still occupies the same physical space whether it is place A or Place B, he/she still has to interact with others for food, etc.
      2) at this point in the pandemic's life cycle, the eviction mortatorium has zero basis is science. Beginning in jan/Feb, the infection rates were dropping like a rock which is consistent with virtually every pandemic curve independent of vaccination, coupled with vaccination of the vunerable, (85+% of over age 65 as of may 2021 per the CDC).

      In summary, at the start of the pandemic, the eviction mortatorium effectiveness was dubious and at best trivial in the big picture. Now in June 2021, with the IFR well below the IFR of the common flu, the behavior/fear of covid is borders on paranormal fear.

      1. I find it laughable to believe that a nationwide eviction moratorium made an iota of difference in preventing the (interstate) spread of COVID during the pandemic.

        But such is the basis for increasing bureaucratic and federal control over our lives.

  2. What statute even goves thecCDC subhect matter jurisdiction?

  3. "Courts could conclude the landlords suffered only very modest financial losses, and thus deny more than minimal compensation."

    I'd like to hear the reasoning.

    1. Why are you laboring under the illusion that there is reasoning?

    2. Well, if a landlord's tenants all paid, they suffered no loss. If 1 tenant out of 100 didn't pay for 5 months, the loss probably qualifies as "modest".

      1. It's nowhere near 1 out of 100, and it's not evenly distributed either. In other words, even if only 10% are in arrears, it's likely that it's much much higher in lower income buildings, while close to 0 in high income buildings

  4. My tenants continued to pay. Some reminded me they had missed a payment, and sent it in. I had not noticed, since I do not bother keeping track. They are not diverse.

  5. I dont understand what gives the authority in the first place.

    I would bet anything that if the memorandum was released tomorrow, it would not have any impact whatsoever on pandemic rates. None.

    So the CDC has the power to create any regulation it wants so long was it can some up with a reason, even a nonsensical one, why it holds? How is this not a non-delegation violation? And I know Congress codified it, but not for this long.

  6. This is all by design. Force small mom and pop landlords to sell to BlackRock or other banksters.

  7. As a single property landlord I have a non-paying tenant I can't evict yet apparently the bank can foreclose on me.

  8. a moratorium that was first instituted by the Trump administration, and then revived and extended under Biden

    Why, that's impossible. There is no way the same policy could be used by Trump and Biden. You have triggered me.

  9. I want to see some class action claims for takings.

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