U.S. Eviction Moratorium Ends July 31. Payback Time Will Not Be Pleasant

Image of a dining/kitchen area of a small apartment.

July 2021 — Renters have a few weeks to regroup before monthly rent is due as usual after July 31. Congress has approved Covid-19 stimulus payments including $46 billion in rental support. But can the government distribute it fully before time runs out?

A Crisis for Owners and Renters Alike

Many renters are on the verge of losing their leases (and dealing with evictions on their credit records to boot). Anticipating droves of displaced renters after July, charities are fortifying their staffs where the need is highest. In North Carolina, for example, one in every seven renter households are behind in payments, and county courts are inundated with eviction case files with some cases involving $10,000 and more.

Even renters who have managed to benefit from the rent moratorium still have to pay off their accumulated debts. And their grace periods will be over in August. Many don’t think they can hold on much longer. As of early June, about 3.2 million U.S. residents said they would likely be evicted from their homes within two months, according to the U.S. Census Bureau’s Household Pulse Survey.

Landlords will need support, too. Not all of them are wealthy commercial property owners. More than 40% of rental properties are held by individual investor-owners, many with modest incomes. Because the U.S. moratorium didn’t allocate assistance for them from the start, some property owners have been going without rental income since March 2000.

The State of the Moratorium

Image of an open mail box with an eviction notice letter in it.

Congress placed a hold on evictions in March 2020, as many workers were asked to stay home during the Covid-19 pandemic. The hold helped renters who lost income and could no longer afford their rent.

When the rent suspension lapsed in September 2020, the Centers for Disease Control and Prevention (CDC) stepped up to order an eviction freeze of its own, in the name of public health. The CDC’s rationale? Evictions could lead to people living in shared spaces, where the risk of spread is greater. The CDC’s relief measure helped renters stay put, by targeting people coping with financial need or extraordinary medical costs during the pandemic.

Landlords, developers and listing agents promptly challenged the CDC’s authority to declare a moratorium. In May 2021, a federal judge in Washington, D.C., agreed with real estate industry groups that the CDC had overstepped its boundaries, yet left the moratorium in place until the CDC’s appeal could be considered. In June 2021, the U.S. Court of Appeals for the D.C. Circuit upheld the CDC’s action.

The industry groups quickly appealed to the U.S. Supreme Court. In June, the Supreme Court in left the CDC eviction moratorium in place — by that time knowing it would wind down on its own within two months.

The Financial Situation of U.S. Renters

According to census data, more than seven million U.S. households have overdue rent bills. Some of these renters are already in conflict with landlords as the moratorium has never applied to them. To benefit from the CDC order, renters had to know it existed. Then they had to give their landlords sworn statements on CDC forms declaring their pandemic-related hardships. They also needed to show good-faith attempts to get government rent aid, and to pay what rent they could.

Important note for landlords: Any building owner financed by a government-backed or conventional mortgage, or receiving any federal assistance, must supply a 30-day notice before evicting a renter from the property.

Using federal money from the 2020 CARES Act Coronavirus Relief Fund, states have supplied rent aid to renters. Some states banned evictions. (Most bans are now expired.)

Yet federal aid distributions have been erratic, and at times states delayed or even turned away numerous applications for help. Millions of people have lived with possible eviction hanging over their heads for months. As of the end of June 2021, more than 16% of promised funds still hadn’t been received by owners and renters, says the Center for Public Integrity. Some states used rental funds for other needs.

What Action Is the U.S. Government Taking Now?

The Biden-Harris administration has announced several actions to help prevent evictions at this critical turning point, declaring: “Money is available in every state to help renters who are behind on rent and at risk of eviction.”

In addition to urging landlords and courts to avoid eviction actions against renters, the administration is:

  • Directing courts to federal resources and dispute mediation tools “to keep families hard-pressed by the COVID crisis in their homes while helping make landlords whole.”
  • Liaising with attorneys’ associations to create support systems for vulnerable households — especially for people coping with homelessness, disability, and language barriers.
  • Recommending streamlined payment options for commercial landlords and utility companies.
  • Urging inter-agency collaborations and the use of automation in application processing.
  • Implementing a “whole-of-government” effort to raise awareness about emergency aid for renters and property owners, using the U.S. Treasury’s website and consumer finance resources.
  • Working with the Department of Housing and Urban Development (HUD) to spread information about rental assistance. Plus, the Department of Agriculture and the Social Security Administration have been asked to advise recipients of social security payments, SNAP, and other social services about rent aid and emergency housing vouchers.

To supplement this all-hands-on-deck approach, HUD is working with the Melville Charitable Trust to support community-based organizations and to ensure fair distribution of federal funds.

Foreclosure Prevention Update: Conventional and federally backed mortgage foreclosure freezes end at the same time as the eviction moratorium does: July 31, 2021. The Biden-Harris administration is urging the FHA, VA, and USDA, as well as conventional loan companies Fannie Mae and Freddie Mac, to seek “home retention solutions prior to any referral to foreclosure.” The FHA, VA, and USDA are formulating additional loan relief options.

Homeowners who have not requested COVID-related forbearance yet may still apply, up until September 30, 2021.

In the American Bar Association’s Practice Points, Attorney John Austin from Raleigh, North Carolina writes about “an avalanche of eviction cases that have been stayed for a year” and will take yet another year before they work their way to resolutions. Legal services are asking attorneys, nonprofits and churches to help them.

Ultimately, healing from the pandemic is more than a physical struggle, and more than a public health struggle. It is a test of our ability to come together as a community in a time of need.

Supporting References

Alabama Association of Realtors v. HHS, No. 20-cv-3377 (May 2021). Find the Supreme Court blog’s coverage here.

The White House Fact Sheet: Biden-Harris Administration Announces Initiatives to Promote Housing Stability by Supporting Vulnerable Tenants and Preventing Foreclosures (Jun. 24, 2021).

Melissa Quinn for CBS News: Supreme Court Keeps CDC’s Eviction Moratorium in Place (Jun. 30, 2021).

Nina Totenberg and Chris Arnold for National Public Radio: The Supreme Court Leaves the CDC’s Moratorium on Evictions in Place (Jun. 29, 2021).

Atty. John Austin for ABA Practice Points: Attorneys for Landlords and Residential Tenants Forecast a Tsunami of Eviction Litigation (Feb. 4, 2021).

Gwendolyn Glenn, David Boraks and the Charlotte Journalism Collaborative for WFAE/National Public Radio: (“All Things Considered”): The Numbers Are Going To Be Really Bad’: What An End To The Eviction Moratorium Means (Charlotte, NC; Jul. 1, 2021). 

Ben Sessoms for The News & Observer: Eviction Ban Ends in a Month and Many Are Still Behind on Rent. Here’s How We Got Here (Raleigh, North Carolina, Jul. 5, 2021).

Ayelet Sheffey for Business InsiderBiden’s Stimulus Set Aside $50 Billion to Help Renters Facing Eviction, But Just 4% of That Has Gone Out (Jul. 6, 2021).

Sarah Kleiner et al. for The Center for Public Integrity: More Than $425 Million Promised for Rental Assistance Didn’t Make It to Tenants or Their Landlords (published in partnership with The Associated Press, Jun. 29, 2021).

Photo credits: Keresi72 and Tumisu, via Pixabay.