An eviction moratorium from the White House?

Apparently having grown tired of waiting for Congress to take some action on additional pandemic relief, the White House issued a new mandate yesterday in conjunction with the CDC to assist renters. A new, four-month moratorium on evictions will go into effect immediately, preventing landlords from kicking out delinquent tenants until at least the end of the year. While this move is already being cheered by people from both sides of the aisle as a populist show of compassion, the new edict leaves many questions unanswered, with some of the most urgent issues simply being pushed further back on the calendar rather than being fully resolved. (Washington Post)

The Trump administration Tuesday announced a four-month halt on eviction proceedings against cash-strapped renters, invoking federal public health laws out of concern that a national homelessness crisis could worsen the country’s coronavirus outbreak.

The new moratorium seeks to cover families experiencing financial hardship as a result of the pandemic, aiming to help as many as 40 million Americans who are already struggling to pay their monthly housing costs in the midst of the worst economic crisis since the Great Depression, according to Treasury Secretary Steven Mnuchin, who referenced that an action was imminent earlier in the day.

The policy comes roughly a month after President Trump signed an executive order tasking the U.S. government, including the Centers for Disease Control and Prevention, with exploring ways to protect renters amid the pandemic, as talks broke down on Capitol Hill over a new round of coronavirus relief.

The first question I’d like to address deals with the appropriateness of this moratorium. It seemed dodgy enough to me when Congress passed a 120-day moratorium covering the entire country, but to have the executive branch do it looks even more awkward. Decisions digging that deep into the real estate and housing markets should, in my opinion, be made as close to ground-level as possible. Not every city, county or state has been hit by the virus as hard as others, so local leadership would be better poised to make such determinations.

Plenty of cities and states did precisely that, ranging from California to Texas and to New England. The areas that were hardest hit, producing the most vulnerable renters, could benefit from a moratorium. Conversely, areas with very few cases where most businesses remained open had no need for such a mandate. In those cases, it only became an excuse for otherwise delinquent renters to be able to stay in their rental units leaving the landlords with no way to remain profitable. One-size-fits-all solutions from the federal level are rarely a good idea.

Also, as I alluded to above, this mandate only postpones the eviction crisis for a few more months. When the clock runs out, those renters are still going to owe a lot of back rent that many will not be able to pay so they’ll be put out of their rental units anyway. The order provides no funding to either help the renters pay off their rent or provide landlords with support for all of the losses they are sustaining from non-paying tenants. I’m not saying that the federal government should do that because it’s a complicated question and such relief would cost us hundreds of billions of additional dollars that we don’t have.

The point is, we have to decide whether it’s the federal government’s place to pay everyone’s rent for as much as a year (by the time all of this plays out) or if state and municipal governments need to shoulder that burden. None of the potential options are pretty, but rushing into this headlong without a long-term plan isn’t going to solve anything in the end.

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John Stossel 5:30 PM | July 13, 2024