After CDC Order Was Found Unconstitutional
The Center for Disease Control Eviction Moratorium was found to be unconstitutional on August 26, 2021. Despite eighteen months of media reporting of a “tsunami of evictions” no such action occurred and despite the passage of four weeks (as of the writing of this article) the eviction action numbers are still below pre-pandemic levels. It is now time to look back at the various moratoriums and determine what can be learned from them.
First, the industry as a whole is able to adapt quickly to various problems that arise. When it was learned that evictions were largely prohibited, many landlords became proactive in accepting partial payments, waiving certain charges and working with their residents. Many owners began applying for rental assistance on behalf of their residents (with the residents needing to acquiesce to such action). We had rules and laws change overnight in some cases, and the industry as a whole did an exceptional job of adapting.
Second, eviction moratoriums will forever change aspects of the rental market and be one of the reasons that rental prices rise. The hardest part about being an attorney in this area throughout the moratoria, was advising mom-and-pop landlords about the problems they face in court against a resident who was not paying their rent. We heard from many clients that use rental properties to finance their daily lives, their kids’ education or their retirement; those people were devastated by the loss of income. Many smaller investors reported to us that they had no choice but sell and get out of the market. On the other hand, large communities will likely increase rent to account for the downside risk and to spread the loss to paying residents. When the market is unable to naturally balance itself, prices will increase as a result.
Third, the fight over the constitutionality of moratoria is still not resolved and tenant advocates will continue to push for more changes to landlord-tenant laws. The Supreme Court’s ruling on August 26, found that the Center for Disease Control did not have the authority from the federal legislature to enact an eviction moratorium. The Supreme Court did NOT find that a national moratorium was per se unconstitutional. Even as of this writing, certain federal legislators have proposed that the federal legislature enact a new eviction moratorium. While it‘s not likely to get traction, it is something that must be taken seriously.
Similarly, it is expected that tenant advocates will push for significant change in landlord/tenant matters on a state and local level. Last year, we saw a significant rise in the number of pro-resident bills. This included proposals such as rent control and longer time periods for non-payment of rent notices.
Finally, it appears that eviction moratoriums lead to increased hostility between landlords and tenants. During the moratoria, many landlords were frustrated that they were unable to enforce their contractual and state law rights to remove residents who refused to pay. Once the CDC order lifted, we have seen more residents blaming landlords for the rental assistance not being delivered fast enough and for refusing to permanently waive late fees or other charges. This is a concerning result of the moratorium.
The CDC order may no longer exist, but its implications are just being seen. We expect to see more changes and repercussions in the months to come.
by Mark Zinman, Zona Law Group