Eviction moratorium extended through June, but is that a positive?

Two days before it was set to expire, the Centers for Disease Control (CDC) announced that it was extending its nationwide eviction moratorium through the end of June.

This puts an additional 90 days onto the moratorium, which was supposed to expire at the end of March.

This moratorium, which was put in place in September 2020 as a way to try and assist renters who may have been financially impacted by the COVID-19 pandemic, has been challenged in courts throughout various states in the country.

This moratorium, while helpful in theory, has created unintended consequences in the months since it came into existence.

It has created a backlog of pending evictions because some renters aren’t paying their rent, and as soon as it is lifted, the courts will be deluged with eviction hearings. And secondly, it has thrust mom-and-pop landlords into a financial bind of their own, suddenly forced to make mortgage payments on properties in which they have not been receiving rent from their tenants. These properties also tend to have slim profit margins to begin with, meaning that after a couple months, the property owner is in danger of getting behind or even defaulting on the mortgage.

The National Association of REALTORS® (NAR), has been at the forefront of the challenges to the moratorium and has successfully lobbied for federal rental assistance in an effort to prevent the problems created by the moratorium becoming a crisis that hurts both the landlords and the tenants.

“NAR helped secure $25 billion in 2020 and another $21.55 billion (in March) in federal rental assistance funding, which can be paid directly to property owners,” said NAR chief advocacy officer Shannon McGahn in a press release. “This was critical to averting a multifamily real estate crisis, as many of our nation’s housing providers are mom-and-pop operations.

“Our focus now turns to ensuring there is not just enough funding but also a smooth implementation of rental assistance while the various challenges to eviction bans work their way through the courts.”

The CDC order has allowed for an eviction to be stayed if a renter declares that they have tried to make timely payments of their rent, meet certain employment and income requirements, and have pursued all appropriate government assistance.

With the announcement of the extension in March, the CDC expanded the order to include renters “who are confirmed to have, who have been exposed to, or who might have been exposed to COVID-19 and take reasonable precautions to spread the disease.”

And while this is a hit to the property owners, the housing providers can still evict tenants for non-financial reasons that would violate the landlord-tenant contract, including property damage and criminal activity.

“Rental assistance averted two crises—one for mom-and-pop property owners who did not have a reprieve from their bills and relied on their rental income and one for tenants who would have been responsible for months of back rent when the eviction moratoriums expired,” McGahn said. “We must continue to look for ways to protect tenants and property owners from further financial turmoil while ensuring housing in America remains safe and stable for decades to come.”