A national eviction moratorium issued by the U.S. Centers for Disease Control and Prevention (CDC) is unconstitutional, according to a Feb. 25 ruling by a federal judge in Texas. The ruling does not address similar state-level bans, but raises key questions on the extent of the federal government’s power to prevent residential tenant evictions during the pandemic. (National Multifamily Housing Council and GlobeSt, Feb. 26)
- The federal eviction moratorium – first enacted by Congress almost a year ago in the CARES Act, and since extended by both the Trump and Biden Administrations by executive orders, currently expires on March 31.
- Biden might further prolong the CDC’s eviction ban though another executive order. (Washington Post and NBC News, Feb. 26) The $1.9 trillion COVID relief bill passed by the House last week and pending before the Senate does not include a federal eviction ban due to procedures moving the package through “reconciliation” rules. (CNBC, March 2.)
- In striking the CDC’s action, Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas ruled in favor of an individual landlord and six property management companies that claimed the moratorium exceeds the federal government’s power to regulate “commerce” under Article I of the U.S. Constitution. (BGov, Feb. 25)
- He wrote: "Here, the regulated activity is not the production or use of a commodity that is traded in an interstate market. Rather, the challenged order regulates property rights in buildings—specifically, whether an owner may regain possession of property from an inhabitant." (Terkel v CDC, Feb. 25)
- The Department of Justice (DOJ) on Feb. 27 announced it would appeal the decision. DOJ maintains the decision “does not extend beyond the particular plaintiffs in that case, and it does not prohibit the application of the CDC’s eviction moratorium to other parties. For other landlords who rent to covered persons, the CDC’s eviction moratorium remains in effect.” (DOJ statement, Feb. 27)
The Roundtable & Rental Assistance
- Roundtable President and CEO Jeffrey DeBoer testified during a Senate Banking Committee hearing last year that the CDC moratorium underscores the need for a dedicated fund to help impacted tenants meet their rent payments.
- He also testified that shoring-up a reliable stream of rent payments also provides apartment owners with the revenue they need to pay their property taxes, utility bills, employ their own workers, and invest in their building assets to keep them running safely and efficiently. (DeBoer Written Testimony, Sept. 9, 2020)
- In Dec. 2020, Congress passed omnibus legislation that provided $25 billion in rental assistance. Last week, the House passed a $1.9 trillion pandemic relief package that included an additional $19 billion for residential rental assistance through Sept. 30, 2027. (See The Roundtable’s Summary and Analysis of Key Economic Provisions in The American Rescue Plan.)
- The Wall Street Journal recently reported that small landlords who rely on rental income for their retirement are vulnerable to eviction bans – as millions of tenants are behind on rent, awaiting federal Covid-19 assistance. (WSJ, Feb. 26 and March 1)
Alston and Bird notes in an analysis of the Texas decision that “Absent a broad injunction, the decision has very limited effect. Nonetheless, the ultimate outcome of Terkel v. CDC could have important implications for other courts considering the scope of government action in response to the COVID-19 pandemic – particularly if it is upheld on appeal or ultimately heard by the U.S. Supreme Court.” (Alston & Bird, March 1)
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