News
Alert: Supreme Court Ends National Eviction Moratorium
August 26, 2021
On August 26, 2021, the U.S. Supreme Court issued an opinion that effectively ends the CDC’s nationwide eviction moratorium. The ruling comes not quite a month after the CDC reissued its nationwide eviction moratorium on August 3 following the expiration of the previous moratorium on July 31.
Previously, the Supreme Court narrowly allowed the ban to stand through the July 31 expiration date, but Justice Brett Kavanaugh warned that Congressional authorization would be required to extend the moratorium further. The Court made good on its warning with a 6-3 opinion that kicks the issue back to Congress. Note that the CDC ruling does not impact state and local eviction moratoriums.
The Court’s order has already drawn calls from Members of Congress to extend a national moratorium via legislation. However, the legislative path is unlikely to advance in a 50-50 Senate where the measure would require 60 votes to overcome a filibuster. Republicans and Democrats continue to call for expediting emergency rental assistance, and bipartisan legislation could move to streamline the process. A recent Treasury report indicates distribution continues to lag, with only $5.2 billion of the $46.5 billion in rental assistance distributed to landlords and tenants.
After the August 3 extension, CREFC joined 10 real estate trade organizations in opposing the moratorium and instead urged more focus on distributing rental assistance.
The best way to help struggling renters is for the Administration to work with Congress, states and localities to help disburse rental assistance funds to residents and housing providers in need. Our organizations are committed to working with the Administration and Congress to ensure that the emergency rental assistance program is a success, to help our residents regain housing stability and to preserve the viability of the rental housing sector.
Click here for the joint statement.
Additional analysis of the Court’s opinion and the rental assistance distribution is below. Contact
David McCarthy with questions.
Procedural Background: There and Back Again
The case of
Alabama Association of Realtors v. Dept. of Health and Human Services highlights the unusual nature of the Court’s action. As we covered previously, a federal District Court ruled early this year that the CDC eviction moratorium exceeded the department’s statutory authority. But the District Court issued a “stay” or a pause on its opinion pending appeals. The stay essentially allowed the moratorium to remain in place during the appeal process. The plaintiffs originally appealed the stay to the DC Circuit Court of Appeals, which upheld the stay, and then the case went to the Supreme Court, which originally upheld it in late July.
However, Justice Kavanaugh, who joined the July 5-4 majority, filed a concurring opinion upholding the moratorium but agreeing the CDC exceeded its authority and that “clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31.” Since four other justices voted to vacate the stay (end the moratorium) in July it was widely expected the moratorium would not survive another trip to the Supreme Court. That bet was accurate.
After the CDC reissued the moratorium, the plaintiffs revived their motions to remove the stay. While the District Court agreed with the plaintiffs, it was bound by the original Court of Appeals ruling keeping the stay in place. The case found its way again to SCOTUS where Justice Kavanaugh and Chief Justice Roberts joined the other Republican-appointed justices in vacating the stay and allowing the moratorium to expire.
The case is unusual largely because of the several page opinion that accompanied the order. While emergency appeals with respect to stays are a normal part of Supreme Court practice, the justices often rule on these motions without much explanation. By issuing an opinion, the Court sets a strong precedent for lower courts that might have considered the issue, or if the federal government were to try to revive a moratorium without Congressional authorization.
In this case, the majority justified the extra attention due to the thorough nature of consideration the case has received and the fact that the plaintiffs are very likely to succeed in overturning the moratorium:
And careful review of that record makes clear the [Realtors] are virtually certain to succeed on the merits of their argument that the CDC has exceeded its authority. […] The [Realtors] not only have a substantial likelihood of success on the merits—it is difficult to imagine them losing.
Supreme Court: CDC’s Unprecedented Claim of Authority
The majority did not mince words in ruling the CDC’s actions overstepped its statutory authority:This claim of expansive authority under §361(a) is unprecedented. Since that provision’s enactment in 1944, no regulation premised on it has even begun to approach the size or scope of the eviction moratorium.
The Court also recognized that the moratorium continues to put landlords at risk of irreparable harm by depriving them of rent payments with no guarantee of recovery. Furthermore, the Court said the CDC determined that landlords should bear the financial costs of the pandemic, which also deprives them of their fundamental property rights. To drive home the nature of the CDC’s action, the Court observed the government had not identified a limiting principle to the claimed authority other than it is “necessary”.
Could the CDC, for example, mandate free grocery delivery to the homes of the sick or vulnerable? Require manufacturers to provide free computers to enable people to work from home? Order telecommunications companies to provide free high-speed Internet service to facilitate remote work?
In the end, the Court said that specific Congressional authorization would be needed to implement another eviction moratorium. This language could serve to prevent the Biden Administration from identifying another broad law or regulation through which to enact an eviction ban. The nature of the order as an opinion will also give teeth to the Court’s position as precedence for lower courts to follow.
On the other side of the bench, the Court’s three Justices appointed by Democrats issued a dissenting opinion written by Justice Stephen Breyer that said the case should have a full hearing before the Court and allow the moratorium to remain in effect. The dissent noted the resurgent Delta variant cases and how the CDC had sought to tailor the moratorium to areas with surging COVID transmission rates as arguments for maintaining the stay.
Rental Assistance: Some Areas Still Lag
On August 25, the Treasury Department released its
monthly update on emergency rental assistance distribution. While July saw an additional $1.7 billion distributed to 340,000 households (15% increase compared to June) the reported noted that many states and localities continue to lag behind:
However, too many grantees have yet to demonstrate sufficient progress in getting assistance to struggling tenants and landlords. After September, programs that are unwilling or unable to deliver assistance quickly will be at risk of having their rental assistance funding reallocated to effective programs in other high-need areas.
The September deadline only applies to the first bucket of rental assistance passed in December, which totals around $25 billion. The American Rescue Plan authorized an additional $21 billion with a longer time horizon. Concurrent with the report, Treasury issued yet another set of guidelines hoping to speed the distribution. Next week, CREFC will provide further analysis on the guidelines and the rental assistance distribution to-date.
Contact
DAVID MCCARTHY
Senior Director, Government Relations
dmccarthy@crefc.orgThe information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2021 CRE Finance Council. All rights reserved.