Civil SocietyFederalTexas Landlords Gain Overdue Reprieve After Supreme Court Ends CDC Eviction Moratorium

Since March 2020, Congress and then the Centers for Disease Control (CDC) have prohibited evictions, the only tool a landlord has to rid themselves of unruly or insolent tenants that do not pay for the service which they enjoy. But after a decision by the nation’s highest court to side with a district court’s previous ruling, the policy has now expired.

The district court concluded “that the statute on which the CDC relies does not grant it the authority it claims.” 

And the Supreme Court echoed that conclusion, stating, “[and it’s] clear that the applicants are virtually certain to succeed on the merits of their argument that the CDC has exceeded its authority.”

“It would be one thing if Congress had specifically authorized the action that the CDC has taken…[i]nstead, the CDC has imposed a nationwide moratorium on evictions in reliance on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination.”

The nationwide orders were originally meant as a stop-gap measure to compensate for economic damage caused by the government-mandated shutdowns. The state’s unemployment rate jumped to double digits as 1.7 million Texans’ jobs disappeared in a moment — initiated by the natural slow of commerce at the pandemic’s beginning stages and then exacerbated by lockdown measures.

Officials judged that preventing the eviction of those who, through no fault of their own, were stripped of their livelihoods was a worthwhile measure. But in recent months, the CDC’s and its supporters’ justification turned to keeping people where they are to “prevent the spread of coronavirus.”

Specifically, the eviction prohibition was aimed at nonpayment of rent, not the whole host of other transgressions that are cause for eviction.

According to Eviction Lab’s limited data, 18 percent of the nearly 490,000 evictions executed nationwide since the moratorium’s beginning have occurred in Texas.

Restrictive eviction policies predate the pandemic as cities, especially progressive population centers, have passed local laws to curb the practice.

Often the subject of scorn from public officials looking to appeal to the masses, landlords are often portrayed as cheap, vindictive, and callous. There are some instances in which the characterization is accurate. But those who rent out their property are not all the same, and the eviction moratorium has been troubling at the least and devastating at the most.

“Ultimately, the landlord is screwed,” Sam Upchurch said of the now 16-month-long eviction moratorium that has turned his industry upside down in an interview with The Texan.

Upchurch, who runs TexasRenters.com that manages rental properties, said he’s lost hundreds of dollars throughout the pandemic. Upchurch’s company manages over 700 properties in the Houston area and directly owns roughly 90 properties himself. Many of those he owns are student housing in Nacogdoches and Waco.

According to Upchurch, less than 5 percent of the tenants at the properties he oversees have withheld their rent — many of them college students who left town when classes were canceled and never returned.

But for individual owners like the ones Upchurch’s company manages one bad tenant with few or no others to offset the hit to the bottom line, it can be back-breaking.

“Most of these owners are middle-class people that moved out of their home and decided to rent it out to make it their income or their retirement income,” Upchurch said.

“[J]ust because you own a three bedroom, two bath rental home doesn’t mean you’re a multimillionaire with tons of cash on the side.”

Landlords are also on the hook for paying the property’s bills in addition to losing out on the rental income, which presents a compounding effect.

But the eviction moratorium applied to all landlords regardless of the situation. First issued as part of Congress’s CARES Act, the Congressional moratorium expired on July 24, 2020. The CDC then grabbed the mantle and issued its own moratorium beginning September 4, 2020, and has been extended four times since — twice by the CDC itself, once by congress, and once by direction from the White House.

The president’s extension was challenged in court and made it up to the Supreme Court, which punted on the question of its constitutionality.

Writing the court’s decision, Justice Brett Kavanaugh said in June, “I agree with the District Court and the applicants that the Centers for Disease Control and Prevention exceeded its existing statutory authority by issuing a nationwide eviction moratorium.”

However, Kavanaugh then said, “Because the CDC plans to end the moratorium in only a few weeks, on July 31, and because those few weeks will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds, I vote at this time” to allow the moratorium to expire without interceding.

“In my view, clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31,” he concluded.

Well, days after suggesting that any further action must be taken by Congress, President Joe Biden about-faced and directed the CDC to extend the moratorium until the beginning of October after pressure from his progressive left flank.

According to the Biden administration, support for another Congress-approved moratorium is not there.

CDC Rochelle Wolensky justified the order by pointing to the summer’s rise in coronavirus cases. “This moratorium is the right thing to do to keep people in their homes and out of congregate settings where COVID-19 spreads,” she said just days after Biden suggested it couldn’t take such action.

Upchurch took more umbrage with Kavanaugh’s decision than Biden’s, which by punting on the issue gave the White House enough legal wiggle room to issue the extension.

“I think [Kavanaugh’s statement] is 10 times worse than Biden’s because, ultimately, we rely on the Supreme Court to do what’s right and doing what’s right and may not be doing what’s nice,” Upchurch said.

“It’s outright a violation of the Fifth Amendment right to private property,” he added.

“The government’s basically taken over your home with no compensation to the landlords and, and landlords can’t go get the money that’s out there directly, either.”

A group of real estate agents and rental property owners is challenging the order again and have filed with the Supreme Court, but no decision has yet been made.

Throughout the pandemic, tenants have had access to government rental assistance, but it must have the renters’ participation. Landlords have no ability to access that money without the cooperation of their tenants, and unruly tenants can be unwilling to jump through those hoops.

According to the U.S. Treasury, however, only 11 percent of the $47 billion allocated by Congress for the rental assistance program has been doled out.

Emily Blair — executive vice president of the Austin Apartment Association which represents over 1,100 rental properties across 11 counties, most of which are in Hayes, Travis, and Williamson counties — told The Texan, “It’s been challenging throughout the pandemic for rental housing providers to effectively manage their property when presented with those challenges.”

Much of the aid though is meant for future rent, not backpay. Upchurch said, “We’ve got leases, say $2,600 a month, that people have gone to get checks well into next year to finance. And then they break the lease and say, hey, I want that money.”

That money can be clawed back but the potential for fraud is there, and fraud has been a significant theme during this chapter of federal aid being tossed around.

“What they should have done [instead of providing rental assistance to tenants] is given landlords tax credits,” Upchurch stated, adding, “if whatever your income was reduced for the previous year’s income, then you’ll get a tax credit for it.”

That rental assistance program is extended well into 2022 and landlords cannot access the business grants that many other sectors have been able to use.

Blair, however, sees the rental assistance as “the best solution” over the eviction moratorium which, she said, has created many unintended consequences.

“There has been a really great availability of rental assistance and our focus has been on getting that assistance money out and into the hands of those who need it,” Blair stated. Across the area the APA oversees, Blair said that $64 million has been distributed in rental assistance throughout Hayes, Travis, and Williamson counties.

Where that and other aid programs can be accessed, Upchurch said it has helped — but navigating their processes is not easy to do.

In all, Upchurch still says the rental business is worthwhile. But he stressed the importance of screening tenants which can avoid many problems both during pandemic and normal times.

“The most important thing is to really do a good job of setting your criteria for your rental applicants,” he said.

Vetted renters with good credit scores, Upchurch added, “are the ones that are going to continue to meet their obligations.”

“It really hasn’t affected most of our landlords,” Upchurch concluded, “but if you don’t know what to do and if you’re that one person or two people that have the deadbeat tenants, it’s extremely painful.”