Special commentary –Eviction moratorium expiration unlikely to upend the U.S. economy

Special Commentary

August 2, 2021

What happened

The federal moratorium on residential evictions expired on July 31. House Speaker Pelosi didn’t have enough votes to extend it to October 18, though she vowed to continue attempting to get the votes.

Background on the nationwide eviction moratorium

The original eviction moratorium was temporary. Congress adopted a four-month moratorium as part of the CARES Act from March 24 to July 24, 2020. During that span, “covered” tenants could not be evicted for nonpayment of rent nor could landlords file notices to vacate until 30 days after the expiry (August 23, 2020). Covered tenants were defined as those renters below a certain income level (individuals under $99,000 and joint filers under $198,000) and in properties participating in federal assistance programs or with federally-backed financing.

The federal eviction moratorium has been extended four times. When the original moratorium lapsed, President Trump signed an Executive Order directing the Centers for Disease Control and Prevention (CDC) to issue a new eviction ban. The CDC’s eviction moratorium extended it four more months from September 4 through December 31, 2020. Congress extended it legislatively through January 31, 2021, as part of the COVID-19 relief bill (officially known as the Consolidated Appropriations Act of 2021) enacted in late December 2020. In 2021, the CDC extended it three more times, until March 31, then June 30 and again through July 31.

The eviction moratorium has been controversial. The question of legal authority to issue such a moratorium sprang up almost immediately when the CARES Act was passed. It was complicated by using the CDC extensions. There were many legal challenges with mixed results, both in state and federal district courts, although more seemed to rule against moratorium.

One federal court case emerged with realtor organizations and landlords challenging the CDC’s authority to regulate private property rights. In late June 2020, the U.S. Supreme Court let the moratorium stand but explicitly stated they did so because it was set to expire in 30 days and the White House said it wouldn’t extend it any further. Thus, even the Supreme Court left the legality unclear.

A handful of states have stepped in with their own eviction moratoriums. Several states—such as New York, New Jersey, Oregon, and Vermont—have extended and tweaked various eviction moratoriums.

Bottom line

There will undoubtedly be an impact for individual renters and landlords, especially mom & pop property owners. Just how much the expiration of the federal eviction moratorium will impact the macro economy and at what magnitude is not easy to calculate. Still, the weight of the evidence leads us to believe the impact on the overall economy will be rather limited.

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