New NBER Study Finds Covid Eviction Moratoria Increased Racial Discrimination

Moratoria caused landlords to be less willing to rent to black tenants.

A new National Bureau of Economic Research study by economists Alina Arefeva, Kay Jowers, Qihui Hu, and Christopher Timmins finds that eviction moratoria enacted during Covid led increased racial discrimination against black potential tenants. Here is the abstract:

We provide evidence of intensified discriminatory behavior by landlords in the rental housing market during the eviction moratoria instituted during the COVID-19 pandemic. Using data collected from an experiment that involved more than 25,000 inquiries of landlords in the 50 largest cities in the United States in the spring and summer of 2020, our analysis shows that the implementation of an eviction moratorium significantly disadvantaged African Americans in the housing search process. A housing search model explains this result, showing that discrimination is worsened when landlords cannot evict tenants for the duration of the eviction moratorium.

The authors are likely to revise the study before final publication. But their results should not be surprising. Eviction moratoria make it difficult or impossible for landlords to evict tenants who default on the rent. That, in turn, leads property owners to be more wary of renting to people who are disproportionately likely to default, such as poor people. If blacks are, on average, poorer than whites or more likely to default for other reasons, landlords will be more reluctant to rent to them at a time when they cannot resort to eviction to deal with default. And studies do in fact suggest black tenants are, on average, poorer than white ones, and more likely to carry rental debt.

The NBER result is also consistent with previous studies showing that eviction moratoria and other policies that make it harder to evict delinquent tenants increase the cost and reduce the availability of housing. They are also likely to screen potential tenants more carefully, keeping out those who seem unusually likely to end up in default. Thus, while eviction moratoria and other similar policies benefit current tenants, they reduce the availability of housing to future ones - including current tenants wishing to move to a different location.

This, doesn't necessarily prove that eviction moratoria are unjustified. If, for example, Covid-era moratoria saved many lives, the resulting  reduction in the availability of housing might have been worth it. But there is no good evidence that any such thing happened.

Similarly, eviction moratoria enacted during economic downturns might still be worth it if they save large numbers of people from poverty and homelessness. But, once again, available evidence doesn't support that theory. When the Supreme Court abruptly terminated the federal Covid eviction moratorium in August 2021 (ruling that the CDC lacked the authority to enact it), the eviction "tsunami" predicted by defenders of the policy failed to materialize.

There is much that can be done to increase the availability of housing to low-income and minority tenants. Most importantly, it can reduce or eliminate exclusionary zoning, which has  a long history of blocking housing construction in ways that disproportionately harm those very groups.

If government wants to provide low-income tenants with extra support during a recession or a pandemic in order to prevent eviction, it can give them temporary rent subsidies.  That can help tenants make ends meet without incentivizing landlords to exit the market, raise rents, or discriminate low-income and minority tenants. But we should avoid policies - like eviction moratoria - that tend to harm many of the very people they seek to help.

The legal and policy questions here are distinct. I have argued that the federal CDC eviction moratorium was beyond the agency's power, and that eviction moratoria also violate the Takings Clause of the Fifth Amendment, and similar provisions of state constitutions. But even those who differ with me on these legal questions should consider whether eviction moratoria really are a good strategy for helping poor tenants.