Eviction Moratoriums: No Reason to Continue

Sign from August, 2020 (KQED)

The eviction moratoriums that began in March, 2020, were supposed to last three months. At the time we knew that this extraordinary benefit--worth many millions of dollars to many thousands of people at the expense of landlords--would be very difficult to discontinue. The press ran story after story about families who were directly affected by the coronavirus through illness and indirectly affected through layoffs and business shutdowns. The moratoriums were extended another three months, then into the spring of 2021.

Congress extended the national moratorium to July 31st, and the Biden Administration and the CDC unilaterally kept it going until the Supreme Court ruled that it had to stop on August 31st. (In California, by the way, the moratorium continues until September 30 and an eviction may be forestalled until 2022 if the tenant pays 25% of the back rent.)

Now that 18 months have elapsed since the start of the lockdowns, the data has come in on how renters as a group fared economically: [bold added]

The CFPB [Consumer Financial Protection Bureau] issued a report on Friday examining the financial conditions of renters before and during the pandemic. It shows that renters’ credit scores increased by 16 points during the pandemic compared to 10 points for homeowners with mortgages. Credit scores increased even more for renters with children (25 points) and those earning less than $40,000 (18 points).

Survey measures of renters’ “Financial Well-Being” also improved between June 2019 and June 2020 even as unemployment spiked. Meantime, fewer renters fell behind on non-rent payments and bills. The share of renters with a credit delinquency fell to 28% in April 2021 from 33.3% in December 2019. “As of spring 2021, renters’ finances appear to have been in a stronger position than they were before the pandemic,” the CFPB writes.

Thank the trillions of dollars in pandemic transfer payments from Congress, which helped lower-income Americans, who are more likely to rent. As the CFPB explains, “Before the pandemic, renters were more likely to be financially vulnerable, partly because they were younger on average and had lower incomes. These factors made them both more likely to receive a larger stimulus payment and more likely to receive student loan forbearance” as well as enhanced and extended unemployment benefits. Parents also received $3,000 to $3,600 tax credits per child.

The Census Bureau reported last week that the poverty rate fell in 2020 to 9.1% from 11.7% in 2019 thanks to stimulus checks and enhanced unemployment benefits. Many used the transfer payments, eviction moratorium and student loan forbearance to pay off higher-interest debt, which improved credit scores.

The claim that the eviction moratorium was necessary to prevent hard-up renters from being thrown onto the streets was always dubious, and now it appears even more so. It was another income transfer, and thank the High Court for finally striking it down.

The public may well be treated to more stories of good people who have fallen on hard times and don't deserve to be kicked out of their apartments. However, such individuals existed long before the pandemic and are no longer representative of renters as a group.

It's debatable whether the eviction moratoriums were worth the overriding of contracts and the unprecedented burden that a particular group (landlords) was forced to bear for the sake of mitigating harm to another group (tenants). Now that the CFPB has shown that tenants on average improved their economic position, what's important now is that the moratoriums end so that the damage caused by this policy stops getting worse.