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Legal Challenges Greet New Moratorium on Residential Evictions, Foreclosures

Philip R. Stein

On September 4, the Centers for Disease Control (CDC) imposed a moratorium on residential foreclosures and evictions through the end of this year. The move quickly followed comments by the Trump administration that it would take steps to keep renters from being evicted during the current pandemic. The administration described the steps as necessary to prevent an eviction crisis that would likely further strain an already fragile economy. The CDC also cited the health risks that would flow from displacing large numbers of people from their homes at a time at which the potential for additional stay-at-home orders remains significant.

Questions about the legality of the CDC’s order arose virtually as soon as it came into effect. Within four days, a Virginia landlord had filed suit against the CDC. In the suit, filed in the U.S. District Court for the Northern District of Georgia, the landlord asserts that the CDC’s order and related actions “are not authorized by statute or regulation … and are an affront to core constitutional limits on federal power.” That lawsuit was quickly followed by a similar one filed by the New Civil Liberties Alliance, and then joined by the National Apartment Association. Among other things, those organizations argue that the CDC “encroached on private property rights” and that “federal agencies do not have powers to waive state laws.”

Members of the rental housing industry have commented to news outlets that many landlords will be unable to pay taxes, mortgages, insurance, and utilities in the event that residents are permitted to forgo rental payments with impunity. By contrast, advocates for tenants in low-income housing contend that relief to renters should be broader, so as to avoid a “financial cliff” scenario in which individuals and families still suffering in a lagging economy must suddenly make a “balloon payment” once the moratorium ends that includes all back rent owed.

The CDC ordered a temporary halt to evictions of persons earning no more than $99,000 a year. The administration acted independently after Congress did not decide whether to extend a previous eviction moratorium that ended in July. To obtain the relief, renters must affirm that they are incapable of paying their rent or are likely to become homeless if kicked out of their property. However, news sources such as Bloomberg have reported that “individuals who received a coronavirus stimulus check earlier this year also qualify for the protection, as do couples who jointly file their taxes and expect to earn less than $198,000.”

Another federal agency, the Department of Housing and Urban Development, also recently announced it would extend an eviction and foreclosure ban from properties with mortgages backed by the FHA. A previous ban on foreclosures and evictions from homes with mortgages backed by Fannie Mae and Freddie Mac has also been extended through the end of this year. Many states have likewise ordered halts of various lengths to commercial evictions and foreclosures during the pandemic.

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