Rep. Ralph Norman (R-SC) wrote an editorial for Fox News on August 15 criticizing President Joe Biden’s recent extension of the eviction moratorium initially put in place last year by the Centers for Disease Control and Prevention (CDC). According to Norman, the extension will further cripple thousands of small landlords while exacerbating COVID and housing.
Norman relied on his decades of experience in the real estate industry to say that he knew of the hardships that unpaid rent and the threat of eviction caused. While the problem is legitimate and deserves attention, the federal government has only made the situation worse.
The original purpose of the CDC moratorium put in place under President Trump was to ease housing stress and displaced residents at the height of the lockdowns and economic downturn caused by the COVID pandemic.
State and local governments were allotted billions of dollars in COVID relief, including grants for rental assistance. Problems arose as most states could not start immediate administration and verification of claims for rental service. Only 6 percent of the more than $46 billion designated for rental assistance had been distributed at the end of June.
Norman pointed out the untold side of the equation regarding the financial disaster that has beset hundreds of thousands of “mom and pops” landlords. Small family-operated rental businesses are fundamentally different from large real estate firms, developers, and banks with deep reserves.
Most landlords need rental income to meet monthly bills and mortgages. Months and months of unpaid rent, while strictly prohibited from removing tenants unable to pay, create a real financial disaster risk.
The result of the moratorium is greater scrutiny being applied to prospective renters of vacant properties. Lease terms are also being significantly shortened, and renewals are often denied. The upshot is that less housing is available for most people on the margin and need help the most.
Although the conditions that existed when the moratorium was initiated are no longer in place, the damage that it is causing is continuing. Even giving the government the benefit of the doubt about the need for a moratorium last year, it is far from a given that there was legal authority for the federal government to interfere with private contracts.
The questionable legality of the moratorium aside, the extension is a terrible economic policy. It hurts landlords and harms renters by artificially restricting the supply of affordable housing that would otherwise be available.