The Eviction Ban Screwed Low Income Renters. Here’s Why.

A federal judge has struck down the CDC’s eviction ban order… but it’s too late. The damage is already done. No matter what happens now, low income renters are going to suffer.

At first, the eviction ban seemed like a great idea. I mean, what could be better than helping low income families stay in their homes?

Unfortunately, it’s not that simple.

The Eviction Ban never worked as intended.

Although the eviction ban did help many low income individuals and families stay in their homes despite lost income and even lost jobs, it had many major flaws. At Low Income Relief, we heard from countless low income individuals and families who were wrongfully evicted despite the federal ban. Unscrupulous landlords still found ways to press forward with evictions.

Sure, the ban had great intentions. It was supposed to protect low income families who had lost income or jobs due to the coronavirus pandemic. According to CNBC, nearly 1 in 5 renters — that’s 20% — are behind on their payments. It was hoped that if these people could stay in their homes, it would help slow the spread of the coronavirus.

The Eviction Ban doesn’t hold up in court.

However, the way the legal system evaluates things did not allow the court to consider whether or not the ban was useful or even good. The court’s only responsibility was to determine whether or not the CDC had the authority to create the eviction ban in the first place and, ultimately, it decided that the CDC did not have that authority.

I read the entire 20 page decision by U.S. District Court Judge Dabney Friedrich this morning and there were many interesting tidbits in there. Here are some things you may find interesting:

• The CDC order carried criminal penalties for individual landlords who illegally evict tenants.
• Penalties included fines of up to $250,000, up to a year in jail or both. Organizations were subject to fines of up to $500,000.
• In the last several months, at least six courts have considered various statutory and constitutional challenges to the CDC order.

The Judge wrote, “Because Congress withdrew its support for the CDC Order on January 31, 2021, the order now stands — and falls — on the text of the Public Health Service Act alone.”

Because of that, the Judge elaborated, ““The question for the Court is a narrow one: Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not. Because the plain language of the Public Health Services Act unambiguously forecloses the nationwide eviction moratorium, the Court must set aside the CDC order.”

So what does this mean for low income families who are relying on the eviction ban to stay in their homes?

Unfortunately, the impact is not yet clear.

Diane Yentel, the president and CEO of the National Low Income Housing Coalition, was quoted by CNBC as saying, “Several court rulings have attempted to strike down the moratorium, but all had limited application., While this ruling is written more starkly than previous ones, it likely has equally limited application, impacting only the plaintiffs who brought the case.”

The Justice Department has appealed the ruling and a temporary administrative stay was put in place until May 12th. During this time, the eviction ban stays in effect.

The Ban itself hurt low income renters.

However, the damage has already been done. No matter what happens now, low income renters will face huge challenges moving forward. Here’s why.

OPTION 1: The Eviction Ban is overturned and people are evicted.

If this Judge’s ruling is upheld and the CDC order is vacated, then millions of renters will be at risk of eviction around the country. That’s a lot of people entering a very difficult housing market, with damaged credit and a damaged rental history and a lot of challenges. That’s a big problem.

OPTION 2: The Eviction Ban is upheld and more landlords sell their rental properties.

On the other hand, if the Judge’s ruling is overturned and the CDC order stands, this will most likely exacerbate the problems that the eviction ban created in the first place.

I was doing some research earlier this week and I discovered that many, many landlords nationwide have decided to sell their homes to escape the liability of renting.

Since these small landlords have to pay multiple mortgages, which they usually can’t afford without rental income, they are especially at risk when renters do not pay their rent.

The result?

More homes for sale, less homes for rent.

And less rentals means less supply.

And when there is less supply and more demand, prices increase.

And that’s bad, bad news for renters.

It’s the small landlords with affordable properties that are most likely to STOP renting as a result of the ban.

The Eviction Ban has radically changed the rental market. I’ve learned this firsthand, because I’m currently trying to find a rental home and the process has radically changed!

In my search, I’m finding:

• Some landlords want an application before they’ll show the property or even provide the address!
• Some landlords have stricter credit requirements than some mortgage companies!
• Rental homes are increasingly scarce and hard to find.
• Rental prices are skyrocketing.

I’ve never struggled to find a rental before so I decided to do some research… and I found that the rental shortage and changing landlord requirements seem to be a reaction to the eviction ban itself.

Consider this information that I gleaned from CNBC:

• More than 1/2 of the rental stock in the United States is owned by smaller landlords. Of those, more than 50% have missed payments due to the pandemic and more than 1/3 have said they needed to dip into savings or take out loans for maintenance or mortgage payments.
• Only 60% of single-family rental homeowners received the necessary paperwork to apply for COVID relief.
• 1/3 of landlords have stated that they will be tightening rental standards when evaluating future rental applications.
• 11% — that’s more than 1 in 10 — have had to sell at least one of their rental properties.
• There are 250,000+ fewer rental units than there were last year.

According to the New York Times, it is the small “mom and pop” landlords who own just a few homes that will be the hardest hit. Unfortunately, according to their article, “Those small-scale rental properties, often older and with higher maintenance costs, are more likely to be lower-income housing than newer corporate-run apartments. If the owners can’t keep paying their bills, she said these properties could be put up for sale or enter foreclosure.”

Ultimately, that means fewer low income housing units for low income renters… and that’s very bad because there weren’t enough low income housing units to begin with.

Honestly, it’s starting to feel like a lose-lose situation, doesn’t it?

If today’s ruling is upheld, millions of Americans may be forced to move out of their rentals. That’s a big problem.

If today’s ruling is overturned, landlords (especially small mom and pop landlords who predominantly offer older, more affordable homes) may choose to sell their homes instead of renting them out, or may be more strict about who they rent to. That’s also a big problem.

It appears that no matter what happens with the eviction ban, low income renters are going to be hard-hit… and that’s heartbreaking.

If you are behind on your rent, it is important that you watch our video on the Emergency Rental Assistance program right now. It’s on YouTube, and it should help you figure out how to get help catching up on your rent.

And with that in mind, don’t forget to follow Low Income Relief on YouTube and social media!