(This article originally appeared on The Washington Times)
“I went ahead and did it. I can’t guarantee you the Court won’t rule if we don’t have that authority, but at least we’ll have the ability if we have to appeal to keep this going for a month at least. I hope longer than that.”
That was President Biden on August 5th when he announced that he would support the Center for Disease Control and Prevention’s unlawful extension of its eviction ban through September.
The extended ban, which was first announced at the beginning of the pandemic, is, as the CDC says, a new order “temporarily halting evictions in counties with heightened levels of community transmission to respond to recent, unexpected developments in the trajectory of the COVID-19 pandemic, including the rise of the Delta variant. It is intended to target specific areas of the country where cases are rapidly increasing, which likely would be exacerbated by mass evictions.”
Why is this unlawful? It’s because, on June 29th, the U.S. Supreme Court ruled that the Biden Administration, which oversees the CDC, “exceeded its existing statutory authority by issuing a nationwide eviction moratorium” and that, according to the ruling, “clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31.”
But even though that “new legislation” never happened, the administration went ahead with the extension anyway. And although the action will certainly help some people who – even with added unemployment funds, childcare credits, food stamp increases, health care subsidies, stimulus payments, and federally subsidized paid time off – are still unable to pay their rent, the real impact of the decision is on the more than 8 million independent landlords in this country – small business owners. They’re suffering. Many have gone a year without revenues.
“Apartment owners and operators have continued good-faith operations throughout the COVID-19 pandemic and are now left to shoulder $26.6 billion in debt not covered by federal rental assistance,” The National Apartment Association, an advocacy group representing 93,000 members and more than 10.5 million apartment homes globally that recently filed a lawsuit contesting the administration’s recent decision said in a press release. “The NAA is standing up for an industry – and its residents – that are left holding the bag after operating under extreme conditions for 16 months. The government has intruded into private property and Constitutional freedoms, and we are proudly fighting to make owners whole and ensure residents’ debt is wiped from their record.”
“I have mortgages, and I have expenses for repairs. I’m losing one-third of the rent just because of this,” Howard Simon, a small property owner in Massachusetts, told CNBC. “I’m just a small landlord, and I’m not a big corporation like many of the other large rental organizations, so although the funding is very helpful if the tenant doesn’t cooperate, everything falls apart.”
Jennifer Collins of Lahaina, Hawaii, is suffering similar problems. Ms. Collins, according to this Washington Post report, was hoping to stay afloat on the rent from the three condos she owns after losing her job only to learn that one of her tenants refused to pay and she’s been unable to evict them.
Terri Lacey, who owns two small condo units in California and Nevada, is also struggling. Two of her tenants have stopped paying rent and left her with unpaid utility bills, maintenance expenses, and property taxes. “Here, I am expected to absorb everybody else’s heartaches,” she told Time, “and nobody’s there to resolve my heartache.”
Ebony Harris, a Philadelphia landlord who lost more than $22,000 because she says she hasn’t received a rental payment from either of her two tenants since last March. “There’s no way I can keep these apartments,” she said to a local news organization. “If I don’t sell it, I will go into debt personally.”
Small landlords across the country who, like any business owner, rely on rental income for their livelihoods are reporting similar challenges. Unfortunately, they haven’t received much help from the federal government.
Most of these business owners were left out of participating in stimulus funding like the Paycheck Protection Program and the Employee Retention Tax Credit benefit because both incentives use payroll to determine how much aid is available, and the business of being a landlord isn’t employee intensive.
Yes, there are federal and state loans available, but many of these landlords are already highly leveraged with property mortgages due to the industry they’re in. The government says that there is about $47 billion in federal aid available for these apartment owners. But that aid has been slow in coming and, according to the NAA, is more than $26 billion short of what’s needed by small landlords – and that number continues to climb as the eviction moratoriums continue to be extended.
The only silver lining is that property values in many parts of the country have increased thanks to housing shortages and lumber supply chain issues. But that’s of little consolation to these small landlords who, like any business owners, rely on their assets to generate their income stream. Selling their properties is like asking the owner of a manufacturing plant or retail store to sell theirs, an option that’s not a very good long-term option, particularly if that person is relying on their business for their livelihood.
Small landlords are small business owners. But they’ve been ignored by the Biden Administration in its illegal decision to extend the CDC’s eviction moratorium. Federal aid isn’t really what’s needed here. Abiding by the law – even by people at the very highest levels of our government – is what’s needed.