Supreme Court Ends Eviction Moratorium: What Happens to the Debt?

Posted on Aug 27 2021 - 2:25pm by Liz Dominguez
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Months short of its extended deadline, the eviction moratorium has ended, struck down by the Supreme Court—voted by six justices in an unsigned opinion on Aug. 26.

President Biden’s renewed moratorium, active in only the areas of the U.S. most impacted by COVID-19, was meant to continue providing a stay against evictions until early October; however, the extension has been encased in controversy. Several landlords and housing organizations stated their opposition, claiming the Centers for Disease Control (CDC) exceeded its authority regarding the ban. 

Some pursued the matter in court, leading to yesterday’s decision to eliminate the order.

“It would be one thing if Congress had specifically authorized the action that the CDC has taken. But that has not happened,” the court opinion reads. “Instead, the CDC has imposed a nationwide moratorium on evictions in reliance on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination.”  

“It strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts,” the opinion continued. 

Not all were in agreement, however. The split 6-3 decision left proponents of the moratorium concerned that communities now face greater risk of exposure, particularly in areas that are seeing a rise in COVID-19 cases.

In a dissenting opinion by Justice Stephanie Breyer, joined by Sonia Sotomayer and Elena Kagan, Breyer wrote, “COVID-19 transmission rates have spiked in recent weeks, reaching levels that the CDC puts as high as last winter: 150,000 new cases per day,” opposing the rushed decision and adding that “these questions call for considered decision making, informed by full briefing and argument. Their answers impact the health of millions. “

“President Biden is once again calling on all entities that can prevent evictions—from cities and states to local courts, landlords, Cabinet Agencies—to urgently act to prevent evictions,” said White House spokesperson Jen Psaki in a statement, who added that the White House was “disappointed” in the decision.

Housing agencies protecting the interests of property owners and landlords, however, continue to push against any type of eviction moratorium.

Bob Pinnegar, National Apartment Association (NAA) president and CEO, applauds the ruling, stating that the association “has long held that the CDC’s eviction moratorium is unlawful.” 

“The government must move past failed policies and begin to seriously address the nation’s debt tsunami, which is crippling both renters and housing providers alike. Only by moving past moratoriums can we ensure America’s 40 million renters have affordable homes today, tomorrow and in the future,” said Pinnegar in a statement. 

“Though the moratorium is lifted, it is important to remember that billions in debt remain on renters’ records and housing providers’ shoulders—it’s past time to focus on the most sustainable path forward of full rental assistance funding and streamlined distribution,” he added. “Together, we can keep Americans housed and preserve critical rental housing infrastructure.”

Chuck Fowke, chairman of the National Association of Home Builders (NAHB) agrees with the decision as well, emphasizing the importance of quickly disbursing rental assistance funds to residents and housing providers in need, but also put the onus on property owners and landlords to move on evictions only if necessary.

“…property owners understand that evictions should only be made as a matter of last recourse and will continue to do everything in their power to help their tenants to access rental assistance and/or to enter into a reasonable payment agreement,” read their statement.

Where does the moratorium lift leave the mountain of debt—more than $73 billion—that still needs to be addressed, and the renters who rely on assistance to stave off evictions? 

While Emergency Rental Assistance Program (ERAP) funds are purported to continue being disbursed (and with greater urgency), only 11% of the program’s total funds had been distributed by the end of July. And according to estimates from earlier this month, at least 11 million renters in the U.S. are behind on payments with 3.6 million households potentially facing eviction in the coming months.

Time will tell if the Treasury Department’s new distribution guidelines will improve ERAP’s application and disbursement process. 

According to the National Association of REALTORS® (NAR), the decision was “a correct one, from both a legal standpoint and a matter of fairness.”

The association is in agreement that the next step is ensuring emergency funding is distributed quickly and efficiently.

“With this rental assistance, now is the time to return the housing sector to its former, healthy function,” said an NAR spokesperson in a statement. “NAR is thankful for the administration’s new guidance to speed up rental assistance distribution, including many of our recommendations. We will continue to work with all parties to make that assistance readily accessible to tenants and housing providers.”

NAR added that the Supreme Court’s decision brings an end to an unlawful policy that places financial hardship on the shoulders of mom-and-pop housing providers, “who provide nearly half of all rental housing in America,” restoring property rights in America.

“No housing provider wants to evict a tenant—it is always a last resort and reserved for the rarest cases,” added NAR. “The best solution for all parties is rental assistance, and all energy should go toward its swift distribution. Nearly $50 billion of aid is now available in every state to cover up to a year-and-a-half of combined back and future rent and utilities for struggling tenants.”

Need assistance applying for ERAP funds or navigating the process? Stay tuned for an upcoming story from RISMedia that will help you or your clients quickly access emergency rental assistance funding.

 

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