Update on Aug 5: The moratorium was extended by the CDC, against a ruling by the U.S. Supreme Court.
The eviction moratorium expired on Saturday, July 31. There has been plenty of speculation about what will happen now, but I don't think anyone is absolutely sure. It could spark an economic nightmare, but is getting little to no coverage in the mainstream media.In March of 2020, Congress passed the Coronavirus Aid, Relief and Economic Security Act (the so-called “CARES” Act) which included an eviction moratorium preventing landlords from evicting tenants who were delinquent in paying their rent.
The national moratorium has been challenged in several courts and its expiration date has been extended four times. It currently expired last Saturday, July 31, and federal officials (including President Biden) have indicated there are no plans to extend it again, though there are those in Congress who wished to have it extended (AOC, for example).
Throughout the moratorium, there has been confusion among renters and landlords regarding federal rent assistance. Landlords complain that some tenants have abused the moratorium by not paying rent, even if they have the money to do so. Tenants complain about the complicated paperwork and the long wait to receive rent assistance funds.
More than 11 million Americans — 16% of renters — are still behind on their rent payments, according to analysis by the Center on Budget Policy and Priorities. Some believe the numbers are far higher. And the moratorium has ended.
Congress approved more than $46 billion in rental assistance between last December and March for both tenants and landlords, but getting the money into their hands has proved hard for both the federal government and state and local agencies.
Exact amounts of assistance renters and landlords can receive depend on their income and where they live, but renters could get enough to cover rent from as far back as March 13, 2020, unpaid utilities and even, in some cases, future rent. The problem is, the assistance is just not getting to where it needs to go.
The Treasury Department claims that more than $1.5 billion in assistance was delivered to eligible households in the month of June alone — nearly triple the amount distributed since April. Administration officials point to this as a pivotal sign of progress in the program and an indication that once local communities establish a system for handling the money, they will be able to distribute it quickly. That’s good news but, again, the eviction moratorium has already ended.
Bottom line: There is a definite risk that millions of renters could be evicted and put on the street just ahead. Now I understand the eviction process is a complicated one, including in most cases going through courts. So, it’s not going to happen immediately after the deadline last Saturday. Yet this could be an economic nightmare over the next several months.
Finally, given the economic magnitude of the start of mass evictions for millions of delinquent renters, and the psychological impacts it would have on the country at large, I could see this throwing stocks into a correction just ahead.
Hopefully, federal and state agencies can get up to speed quickly (which I doubt) and assure landlords that the money is coming and convince most not to initiate the eviction process a few weeks longer.