President Biden has begun repealing many of the administrative actions of his predecessor, in addition to implementing key planks of his own campaign platform, such as Biden’s commitment to housing affordability. Unfortunately, the new administration has missed a key opportunity to accomplish both goals by choosing to extend rather than end the Centers for Disease Control and Prevention’s eviction moratorium.
On her first day in her role as the new CDC director, Rochelle Walensky announced that the Biden administration would extend Trump’s moratorium on evictions through the end of March and perhaps beyond. To justify this decision, Walensky said, “[Coronavirus] has also triggered a housing affordability crisis that disproportionately affects some communities.”
But the real housing crisis is looming just around the corner. It will come not in spite of this moratorium but because of it.
Eviction bans are decimating small landlords and causing an even larger bubble that will inevitably pop. Roughly half of rental units in the United States are owned by “mom-and-pop” landlords. These small landlords typically own only a handful of units, if they even own more than one. While wealthy real estate firms are getting heaping sums from stimulus packages such as the CARES Act, mom-and-pop landlords get almost nothing. On top of this, they are now being deprived of one of their main sources of income.
Only those who are able to rely on dipping into their retirement savings will be able to survive, but it will be painful. In all likelihood, the wealthy real estate firms will be the only survivors in the rental real estate market when all is said and done. The catch is that such firms tend to build and rent more luxury units with better profit margins. The days of renting humble apartments or homes from landlords just trying to make ends meet may soon end, thanks to the eviction moratorium.
Needless to say, this will have severe impacts on vulnerable, low-income communities across the country. These are the very people the extended moratorium is intended to help. Because of the lockdowns, these renters will not be storing up lump sums of cash and will not be able to pay once the moratorium finally comes to an end. This will leave mom-and-pop landlords in dire straits. Nearly all of them will be forced to sell whatever properties they own to big real estate firms. In the end, small landlords will have lost their main source of income, and many thousands (if not millions) of people will be evicted simultaneously once the moratorium ends because they predictably will lack the means to pay their back rent. This is a housing crisis waiting to happen.
At the state level, things are not much better. For example, Illinois has a similar eviction moratorium. The only silver lining is that it is more narrowly targeted toward “covered persons” who can demonstrate that their economic hardship is directly related to the coronavirus and that an eviction would no doubt leave them homeless in the near future. While this is better than no qualifiers, it is still an assurance that these populations will end up on the streets sooner or later.
Beyond causing the next housing crisis, the eviction moratorium is a stunning violation of property rights. Government officials are effectively seizing control of private property and preventing landlords from removing nonpayers. This might be one of the most striking violations of liberty to arise from the coronavirus pandemic.
Sens. Rand Paul and Pat Toomey have also pointed out that the CDC has very questionable legal authority to take this action in the first place, let alone extend it indefinitely. One has to wonder how an agency dedicated to public health has become the de facto agency of jurisdiction on matters related to rent and housing. The fact that more politicians on both sides of the political aisle are not asking this question vocally and frequently is cause for concern.
The nation is hopefully on the cusp of turning the corner on the coronavirus and the lockdowns that were ushered in along with it. Many will be able to leave their homes with more regularity again. But there will be thousands who won’t even have homes to leave if the federal government continues down its current path.
Daniel Savickas is a policy analyst for the Taxpayers Protection Alliance.
