Last week, the Supreme Court threw the economy a lifeline by blocking the Centers for Disease Control and Prevention’s eviction moratorium.
Left-wing activists immediately pushed back against this ruling, with Democratic Rep. Cori Bush saying, “If they think this partisan ruling is going to stop us from fighting to keep people housed, they’re wrong. Congress needs to act immediately. For every unhoused or soon to be unhoused person in our districts.”
Hopefully, activists like Bush don’t get their way.
The extensions of the CDC’s moratorium exacerbated America’s housing crisis. Many rental properties were either taken off the market or sold, and rent is rising rapidly. The moratorium acted as a temporary Band-Aid on a bullet wound. Now that the Supreme Court has acted, many evicted tenants will struggle to find affordable housing because the supply has been reduced. Instead of reimposing another version of the moratorium, Congress and the Biden administration should allow the economy to correct for their micromanagement.
Congress passed a limited version of the eviction moratorium as part of the CARES Act in March of 2020 because of uncertainty about the pandemic but prudently allowed the moratorium to expire a few months later. Officials at the CDC decided to reimpose the moratorium in March and expanded it to all housing, private or public. At the time, the merits of this decision were debatable. But as the vaccine became widely available, extending the moratorium through the fall made no sense.
The CDC essentially chained the housing market even as much of the economy was rebounding from the pandemic. Big rental companies were thriving because their business model focuses on white-collar workers, and a few units that weren’t paying rent didn’t drive them to bankruptcy. The renters facing the most pressure were small landlords, who rent out 22.7 million units.
Often an average person rents out an extra apartment or a couple of condos and relies on timely payments and fine margins to get by. Without months of rent money, landlords are struggling to meet their tax bills and mortgage payments as their tenants are cumulatively $23 billion behind on rent. Reporting has uncovered the stories of landlords like Julianna Hernandez in Chicago. Hernandez owns eight units, and half of her tenants are no longer paying rent, including one who has made violent threats against her.
Landlords like Hernandez are often forced to take their properties off the market or to sell. That’s when big institutional investors swoop in. They’ve already bought $77 billion in residential properties this year.
The result is that fewer properties are on the market, and this situation is unlikely to change even after the Supreme Court’s ruling. Many landlords are worried Congress will reimpose a new moratorium, and preparing a property to be put on the market is no small task. The country needs between 5.5 and 6.8 million new housing units in the coming years, and the moratorium made this goal more difficult to obtain by pushing landlords off the market.
Even before the pandemic, the country was experiencing a housing crisis in big cities as there were many more buyers than sellers, and prices were through the roof. A recent report by the National Low Income Housing Coalition found that minimum wage workers can’t afford fair-market rent on a two-bedroom home in any metropolitan area.
Another eviction moratorium will only make this situation worse by decreasing the housing supply while increasing uncertainty. A limited housing supply will lead to an increase in price for the available units. This situation hurts low-income people the most because they’re already at the bottom of the pyramid and often rely on affordable housing to have somewhere to live. When these options either get taken off the market or spike up dramatically in price, many people are left homeless or deeply in debt.
Left-leaning officials and Democrats such as Bush can push for a new moratorium, but they can’t change the basic laws of economics. Reducing housing supply through heavy-handed government is a surefire way to leave many low-income people out in the cold.
Caleb Ashley is a content specialist working in Alexandria, Virginia and a contributor for Young Voices.
