The eviction blame game
During the course of the pandemic, members of Congress and the executive branch have been able to put aside their differences to quietly provide virtually unlimited support for corporations. A little-noticed change in the 2020 CARES Act, for example, allowed corporations to use losses from 2020, 2019, and 2018 to retroactively receive refunds for taxes paid going back to 2015. The cost? An estimated $88.70 billion.
Today, more than "15 million people live in households that are currently behind on their rental payments," putting them in danger of eviction. Collectively, they owe about $20 billion to landlords. Most (but not all) of them had been protected by a CDC moratorium on evictions, which expired on Saturday. About half now expect to be evicted in the next two months.
What is the federal government doing to prevent this humanitarian catastrophe? So far, there has been a lot of finger-pointing.
On July 29, two days before the moratorium expired, the White House released a statement: "President Biden would have strongly supported a decision by the CDC to further extend this eviction moratorium to protect renters at this moment of heightened vulnerability." The problem, the White House claims, is that "when [the] CDC extended the eviction moratorium until July 31st, the Supreme Court’s ruling stated that 'clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31.'" That's debatable. But the White House put the onus on Congress to act.
On Saturday, Pelosi responded that "the Senate would not be able" extend the eviction moratorium because it lacks the votes. That may be true, but it sidesteps the reality that House Democrats "lacked the votes from within their own conference to pass an extension through December." Instead of forcing Democrats opposed to extending the moratorium to take a difficult vote, Pelosi attempted to pass "a shorter-term extension," through October 18, through a procedure called unanimous consent. Predictably, it was blocked by Republicans.
On Sunday, Pelosi and other House leaders said that action extending the moratorium "must come from the Administration." Extending the moratorium, they said "is a moral imperative to keep people from being put out on the street which also contributes to the public health emergency." The House has not, however, interrupted its 7-week recess to address the issue.
Moreover, none of this back-and-forth has done anything to help the millions of Americans facing imminent eviction.
Did the Supreme Court block the CDC from extending the eviction moratorium?
The Biden administration claims that "the Supreme Court has made clear" that the administration cannot extend the moratorium beyond July 31. The reality is more complex.
A group of landlords sued the CDC, claiming the moratorium exceeded the federal government's authority to regulate interstate commerce. A federal district court agreed and struck down the moratorium. But that decision was stayed by the federal appellate court in D.C. The landlords appealed to the Supreme Court, asking the court to vacate the stay and end the moratorium.
The Supreme Court, however, denied the landlords' application to vacate the stay in a 5-4 decision. The deciding vote was Justice Kavanaugh who wrote that he agreed the CDC "exceeded its existing statutory authority by issuing a nationwide eviction moratorium." But Kavanaugh voted to deny the application to "allow for additional and more orderly distribution of Congressionally appropriated rental assistance funds." Kavanaugh said that "clear and specific authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31."
As Kavanaugh referenced, Congress has authorized $47 billion in funds to help renters pay their landlords in December and March. But, as of June 30, just $3 billion was distributed. By all accounts, very little of this money has been spent.
Kavanaugh did say that a further extension of the moratorium would require Congressional action. But that was not the issue before the court. The only issue before the court was whether or not to vacate the stay imposed by the federal appellate court. When a judge, as Kavanaugh did in this case, expresses views beyond the issues presented in the case it is known as dicta and is not binding.
The Biden administration is free to extend the moratorium and, assuming the extension is challenged in court, argue to Kavanaugh and the other Justices that circumstances have changed. First, the Delta variant has made it more dangerous to allow millions of evictions to proceed voluntarily. Second, the time that Kavanaugh thought would allow for the orderly distribution of the funds has not been sufficient.
Even if Kavanaugh and the majority of the court ultimately rejected these arguments, the process itself would allow more time for the funds to be distributed.
On Monday, White House Press Secretary Jen Psaki said that Biden asked the CDC to consider "a new, 30-day eviction moratorium focused on U.S. counties with high or substantial COVID-19 case rates." The request was made on Sunday after the moratorium expired. The agency, Psaki said, has not "been able to find legal authority for a new, targeted eviction moratorium."
Other actions the administration could take to prevent evictions
Absent the extension of the CDC moratorium, the Biden administration can do more than call on Congress to act. There are other steps it can take to prevent evictions. Some of these actions are detailed in a July 29 letter from the National Low Income Housing Coalition to the Biden administration. Here are a few examples:
The CDC could "require landlords or courts to provide 30-days-notice to renters once the moratorium ends before proceeding with an eviction." The notice could "include critical information renters need to protect themselves from COVID-19."
The administration could "announce an eviction moratorium for renters living in all federally assisted properties supported by the U.S. Departments of Housing and Urban Development (HUD), Agriculture (USDA) or Treasury."
The administration could require housing authorities and property owners "to apply for [Emergency Rental Assistance] before filing for eviction for non-payment."
The Justice Department could "issue a notice to state courts declaring that evictions during the pandemic present heightened dangers both to the affected tenants and to the public, and therefore heightened procedural safeguards are required to avoid wrongful or improper evictions."
On Monday, the Psaki said that the Biden administration was "redoubling efforts to identify all available legal authorities to provide necessary protections."
The corporate landlords that ignored the moratorium
Since the beginning of the pandemic, corporate landlords have driven a significant number of evictions. According to the Private Equity Stakeholder Project (PESP), “private equity firms and other corporate landlords have filed to evict at least 75,000 residents [in dozens of counties]” since the moratorium was first put into place. The PESP found corporate landlords account for a majority of the eviction filings in some counties.
One main reason this happened was that the CDC moratorium was not automatic nor self-executing. Tenants were responsible for being aware of the moratorium and actively asserting their new rights. This created a situation where renters who typically do not have legal counsel to advise them of their rights were forced to go up against deep-pocketed landlords with lawyers.
“Many people have gotten evicted just because they didn't understand they needed to sign a form and hand it to their landlords," executive director of the National Housing Law Project, Shamus Roller, told CBS News in April.
Additionally, many of these corporate landlords received taxpayer bailouts intended to be used as a lifeline. Last year, a Popular Information investigation found that, in five states, 62 corporate landlords were filing evictions during the moratorium despite receiving at least $60 million in forgivable loans from the Paycheck Protection Program.
Most recently, Representative James E. Clyburn (D-SC), the chairman of the House Select Subcommittee on the Coronavirus Crisis, announced that he plans to investigate four corporate landlords that have evicted tenants in high numbers and “were particularly aggressive in going after lower-income tenants and Black and Latino renters.”
According to the Subcommittee’s press release, “these companies—Invitation Homes, Pretium Partners, Ventron Management, and The Siegel Group—have together filed for over 5,000 evictions during the pandemic.”
Two of the corporate landlords in question received PPP loans. Ventron Management, a Florida-based real estate firm, filed at least 2,178 eviction filings––roughly a quarter of its tenants––throughout the pandemic. In April 2020, the company received $2.6 million in PPP loans, according to ProPublica’s PPP Tracking Database.
The Siegel Group, a real estate investment and management firm in Las Vegas, filed for 573 evictions. It received $837,100 in loans in April 2020, according to ProPublica’s PPP Tracking Database. In December 2020, the loan was forgiven.
Meanwhile, Invitation Homes beat earnings expectations this past quarter. Last week, the company reported that it increased revenue by 9.3% to $492 million over the last year. In 2020, the company increased profits 30%, experiencing its best year. During that same time period, the company filed for 932 eviction filings, including against disabled veterans and transportation workers.
Pretium’ Partners, a real estate firm that manages roughly $22.3 billion in assets, filed at least 1,750 evictions in the last year. Previously, the PESP found that the firm was “filing to evict residents at rates four times as high in majority-Black counties” compared to majority-White counties.
The problem - with the CARES Act, the CDC moratorium, and any other federal action - is that eviction is a purely state/local process. No federal agency has jurisdiction to enforce a moratorium, and many state laws are inconsistent with the moratorium’s requirements.
The most practical way to enforce a (new) moratorium would be to tie compliance to any federal benefit (PPP loan forgiveness, which is discretionary), and for states to amend their eviction (technically called “forcible entry and detainer”) laws to require that a landlord must verify compliance with all licensing requirements, moratoria, emergency funding programs, and other resources and restrictions BEFORE they will be able to use a court to enforce a lease. This change would put the burden of compliance on the people who are best able to do so, rather than on the most vulnerable individuals in our society.
It is true that many landlords are caught in the middle - they still must pay their debt service, whether or not they collect rent; there was no foreclosure moratorium for commercial real estate. And their inability to regain possession of defaulted units means they can’t lease those units to new, paying tenants, who similarly are stuck in their existing units because there is nowhere else to go.
The pandemic caused a cascade of negative consequences at all levels. But millions of dollars in taxpayer funds are available to help landlords, if only they would avail themselves of the opportunity. It is unconscionable that they are allowed to use our judicial process to shift the burden to others, when they are not willing to help themselves.
The administration and congress have had plenty of time to create a reasonable stopgap for evictions that did not involve asking landlords to selectively bear the burden of a great social upheaval. When the rents stop coming in, the mortgage bills do not. An when a tenant is protected in a property who is causing more damage to it every week, and you can't get him or her out, this has the effect of frustrating small landlords into selling "up the chain" to the blackrocks of the world. I can assure you, if you think 2008 was bad with Mnuchin & Gang's massive land grab with socialized losses - what would come from extended eviction moratoriums with no landlord relief would basically result in complete corporate control of real estate in America.