A nationwide eviction ban, put in place by the Trump administration and extended until June by the President Biden has been struck down by U.S. District Court Judge Dabney L. Friedrich of the District of Columbia, calling it unlawful.
The eviction ban was put in place by the Centers of Disease Control and Prevention (CDC) using authority granted to them during public health emergencies.
While landlords and investors are breathing a cautious sigh of relief, it may be short lived as the Department of Justice has appealed the decision. In addition, state and local eviction bans will likely stay in place.
“The eviction ban widely affected the mom-and-pop investors, or the one-off landlord, much more than the institutional investors,” says Steven Barks, CEO of Worth Clark Realty in St. Louis, and ranked No. 279 by closed transaction sides and No. 447 by closed sales volume on the 2021 RealTrends 500. “Sure, the big guys lost some rent, but when you own literally 10,000 SFHs, you can afford to have some vacancy. If a small-time investor owns two properties and one is vacant, that’s a 50% hit to cash flow. That’s a much bigger deal. I would venture to guess these types of small landlords aren’t always well funded either. So, the ban unfairly affected one group of people over another. The ban may have had good intentions, but the policy hurts the little guys. Relief should be provided to those that were truly affected,” he adds.
In the current ruling, Friedrich said, “It is the role of the political branches, and not the courts, to assess the merits of policy measures designed to combat the spread of disease, even during a global pandemic. 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.”
Two state Realtor® Associations, as well as two housing providers and their property management companies, filed the suit in defense of property owners around the country struggling to pay bills without rental income for more than a year.
The National Association of Realtors supported the lawsuit against the eviction ban. “NAR has always maintained that the best solution for all parties was rental assistance to cover the rent, taxes and utility bills for tenants struggling during the pandemic,” says NAR President Charlie Oppler. “This decision prevents two crises – one for tenants and one for mom-and-pop housing providers who do not have a reprieve from their bills. With rental assistance secured, the economy growing and unemployment rates falling, there is no need to continue a blanket, nationwide eviction ban. With this safety net firmly in place, the market needs a return to normalcy and stability.”
According to Housingwire.com, “A White House official said the Biden administration disagrees with the District Court’s decision. She added that the Biden administration is focusing on getting rental assistance to those who need it most.”