Biden’s Recovery Plan Would Extend the Federal Government’s Extraordinary Eviction Ban Through September 2021

The conversion of eviction bans from an emergency public health measure to a semi-permanent economic relief program continues apace with President-elect Joe Biden’s new $1.9 trillion recovery proposal. His plan calls on Congress to extend federal moratoriums on evictions and foreclosures through the end of September 2021.

“Failing to take additional action will lead to a wave of evictions and foreclosures in the coming months, overwhelming emergency shelter capacity and increasing the likelihood of COVID-19 infection,” warns a fact sheet Biden released on his recovery plan.

That the president-elect is assigning Congress the burden of extending the federal eviction ban—rather than claiming the authority to issue one by himself—is a silver lining. The Trump administration relied on an expansive, legally tenuous view of its own executive authority when it issued a sweeping eviction moratorium in September.

Biden is instead encouragingly adopting a more limited vision of his presidential powers, even as he doubles down on a heavy-handed housing policy that is an unnecessary, and potentially counterproductive, means of preventing a true “wave” of evictions.

“While a lot of people are warning of an eviction tsunami, that’s not something we have seen anywhere yet,” Emily Hamilton, a researcher at George Mason University’s Mercatus Center, told Reason in December.

Some of this can be attributed to the moratoriums that have been put in place at the local, state, and federal levels, Hamilton says, but “even if we look at the Great Recession, evictions didn’t increase over their typical rates because landlords know if they eviction someone for rent non-payment now, they don’t have options for replacing them with someone else who will be able to pay the rent.”

Eviction moratoriums have nevertheless become a ubiquitous feature of the government response to COVID-19. Provided Congress heeds Biden’s call, this will mean the federal government will have had some form of eviction ban on the books for 18 months.

These policies got started at the federal level back in March when Housing and Urban Development (HUD) Secretary Ben Carson authorized the Federal Housing Administration (FHA) to suspend foreclosures and evictions at single-family properties that had an FHA-insured mortgage for 60 days.

The CARES Act, passed by Congress later that month, extended that moratorium for 120 days and expanded it to cover tenants receiving federal housing aid, or living at properties that had a federally-backed mortgage. About 28 percent of multifamily properties were covered by this eviction ban according to the Congressional Research Service. That bill also banned foreclosures of residential properties with federally-backed mortgages for 120 days.

Those protections expired at the end of July. They were revived and expanded once again in September when the Centers for Disease Control and Prevention (CDC) issued a nationwide eviction moratorium that covered all rental properties.

Renters who filed a declaration of hardship with their landlord couldn’t be evicted, although they were still technically responsible for paying rent. Landlords who tried to evict tenants in violation of this order could be subject to hundreds of thousands of dollars in fines and even jail time.

That moratorium, which didn’t cover foreclosures, sparked numerous lawsuits challenging the CDC’s controversial assertion that it could issue an eviction moratorium unilaterally.

The CDC’s moratorium was originally set to expire at the end of 2020. Congress extended it through January as part of the $900 billion COVID-19 relief bill it passed in late December. This short-term extension through the end of the Trump administration was supposed to bide time until Biden could be sworn in and issue his own extension of the CDC moratorium.

In order to justify its eviction moratorium, the CDC pointed to a provision in the Public Health Service Act that gives health officials the authority to make regulations “reasonably necessary” to prevent the interstate spread of communicable disease, including “inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of animals or articles believed to be sources of infection.”

Because evicted tenants might move into crowded living situations, spreading COVID-19 in those environments, the CDC reasoned that a total ban on evictions was, therefore, a “reasonably necessary” means of combating the pandemic.

Critics of the CDC’s moratorium argue that the “reasonably necessary” provision was limited to actions related to those listed powers of disinfection, sanitation, etc. If it weren’t, the CDC would have near-boundless powers to do whatever it wanted in the name of public health.

“I’m not being hyperbolic when I say that if [the CDC’s] interpretation is accepted, it means the CDC can issue any of the same orders at all that any of the governors across the country have done,” says Luke Wake, an attorney with the Pacific Legal Foundation (PLF), told Reason in October. “Business closures, micromanaging the economy, what we can do in our private circles. That would all be under their purview.” The PLF is currently suing the CDC over its eviction moratorium.

Biden, as mentioned, is apparently not willing to lay claim to such sweeping powers, preferring to rely on Congress to act. That mitigates some of the legal concerns about eviction moratoriums. It still doesn’t make them sound policy.

As Hamilton notes, there’s both good reason and historical evidence to support the notion that landlords not more willing to evict non-paying tenants in bad economic times.

Some cities did see spikes in evictions in the late summer and early fall when moratoriums at all levels of government were allowed to lapse. But those bumps can plausibly be explained by the moratoriums themselves: Evictions that would have happened over the course of a few months were allowed to build up so that they happened all at once.

Suspending evictions until well into this year—as some states have already done and Biden is urging Congress to do for the entire country—could well produce the oft-predicted eviction “tsunami” these policies are supposed to prevent.

In addition to a renewed eviction ban, Biden is also calling on Congress to pass $30 billion in emergency assistance that tenants could use to pay their rent and utilities. This would come in addition to the $25 billion in rent and utility assistance that Congress passed last month.

That’s an expensive proposition given the unprecedented deficits produced by the trillions in coronavirus relief appropriated thus far. Fiscal considerations notwithstanding, rental assistance is a far superior alternative to eviction moratoriums if the goal is to keep people housed during the pandemic.

Rental assistance programs, unlike moratoriums, don’t negate the property rights of landlords. Nor do they force rental property owners to provide their product for free, potentially leaving them with little money to cover their own operating expenses. The more Congress spends helping renters cover their bills, the harder it is to justify extraordinary measures like bans on evictions.

Biden’s call for both suggests that his recovery plan is less about dealing with the pandemic itself, and more about using the current crisis to push through long-sought liberal housing policy priorities.