Eviction bans tee up long-term housing crisis

In the 1960s, Greta Arceneaux took out a loan to tear down her old house in Los Angeles and build five rental units on the property. With income from renters, Arceneaux, now 81, saved for retirement and helped her children and grandchildren pay for college. But this year, LA enacted protection for tenants affected by the coronavirus, preventing landlords from evicting them for up to 12 months. Now Arceneaux foots the bills for the property with no guarantee of income. One of her tenants lost his job during the pandemic and stopped paying rent.

“I feel sorry for him,” she told Time. “He’s caught in a situation just like I am. But why are they throwing me under the bus? Why am I responsible for him?” Time reported that by mid-June, Arceneaux had missed out on $15,000 of rent and had a payment of $60,000 to make by the end of the year to meet a new state building code. “My retirement is going down the tubes because of this,” she said.

Eviction moratoriums during the pandemic have kept many low-income people in their homes despite their inability to pay rent, but experts say the measures will provide only temporary relief to renters and long-term damage to landlords and the economy.

The coronavirus economic stimulus package Congress adopted in the spring included enhanced unemployment benefits, stimulus checks for American families, and an eviction moratorium, among other measures designed to keep people and businesses afloat during pandemic-related shutdowns. The moratorium automatically prevented landlords of government properties and properties with government-backed mortgages from evicting tenants for not paying rent. It covered close to one-third of all residential units. In July, that protection expired.

In September, the CDC issued a new moratorium on evictions, covering all residential properties until Dec. 31. It required renters who met certain criteria to submit a declaration to their landlord explaining how the moratorium applied to their situation. The CDC released a document of frequently asked questions about the policy, but the guidelines were sufficiently vague to allow courts to rule differently on their meaning in different states. Some states allowed landlords to send renters notice of eviction though they could not enforce it until next year. Some states and municipalities announced their own rules barring eviction, as well.

Advocates for low-income renters protested that the CDC moratorium was insufficient: Some renters did not know about it, and others assumed it would apply automatically and failed to submit a declaration. Reports sprang up of landlords taking advantage of legal loopholes to evict tenants anyway. USA Today reviewed hundreds of tenant complaints filed during the pandemic and found some landlords had increased rent, refused to renew leases, and neglected maintenance to encourage tenants to leave.

But the Census Bureau Household Pulse Survey for October found that only 17 percent of renters reported being behind on rent—hardly any change from the 16 percent who reported failure to pay or deferral in March. Joel Griffith of the Heritage Foundation said in jurisdictions without eviction bans, the number of evictions have gone down relative to a year ago. The numbers suggest that people’s ability to pay rent has stayed largely the same during the pandemic, so the financial suffering of landlords like Arceneaux has served no real purpose.

“Forcing property owners to provide free housing is a subtle form of expropriation of private property without just compensation,” Griffith said. He predicted that as time passes, landlords will delay property maintenance and upgrades to save money. Some will likely delay their own mortgage payments, hurting banks and credit unions. Fewer property tax payments from landlords will mean smaller budgets for local schools and law enforcement. Landlords might also increase rent and enact stricter credit checks and security deposits in the future to recoup losses, thus hurting prospective low-income tenants. “Ultimately, fewer affordable housing units may be constructed,” Griffith said.

The evictions moratorium allowed some families to remain housed during the pandemic. But when it expires, the rent and late fees will still be due, and many who could not pay before will not be able to pay then.

Shamus Roller, executive director of the National Housing Law Project, expects a wave of immediate evictions to start the new year. The CDC moratorium expires Dec. 31, and though Joe Biden may issue a new order blocking evictions when he takes office, that would leave “a three week gap time in which huge numbers of evictions will be processed,” Roller said.