Teasing the order before the House coronavirus subcommittee Tuesday, Treasury Secretary Steven Mnuchin said the administration exercised executive authority to create a temporary eviction moratorium. The move is a response to an Aug. 8 executive order from President Donald Trump urging the CDC to consider the issue, he said.
"I think everyone will be very pleased, but that's not a reason we shouldn't have legislation [that offers] rental assistance," Mnuchin testified, adding that the measure could impact "close to" 40 million renters.
The lack of rent relief is a major deficiency of the rule, advocates for renters and property owners agreed. Housing attorneys also noted that the CDC's plan raises logistical questions when it comes to application and enforcement state by state.
The CDC order is a health precaution "to prevent the further spread of COVID-19," according to a draft published to the Federal Register. It takes effect Sept. 4.
The eviction ban only applies to cases brought for the nonpayment of rent, according to the CDC. It does not apply to cases brought over an alleged lease violation or expiration, and tenants are still responsible for paying rent to the best of their ability and can face late fees — red flags for tenant groups.
But the measure is substantially broader than an earlier ban under the Coronavirus Aid, Relief and Economic Security Act that applied to tenants in multifamily units with federal assistance. Roughly 12.3 million rental units have federal financing, the CDC said.
In order to qualify for the new eviction ban, tenants must submit a declaration to their landlord saying that they received a CARES Act stimulus check or that they make less than $99,000 or $198,000 jointly.
Tenants must also declare that they are unable to pay their full rent due to a "substantial" loss of income; would likely face homelessness or displacement to a congregate living situation if evicted; and will continue to pay as much rent as they can, among other measures.
The CDC rule will not supersede stronger eviction moratoria at the state level. Violators can face penalties ranging from $100,000 to one year in jail, the agency said.
According to the Aspen Institute, between 30 million and 40 million Americans could be at risk of eviction in the coming months. Dozens of states have no pandemic-related eviction restrictions.
In New York, where an eviction ban is poised to lift Oct. 1, tenant attorneys took a dig at Democratic Gov. Andrew Cuomo, a vocal Trump critic. Legal Aid Society attorney Ellen Davidson called it "disappointing to see that the federal government is willing to do more for tenants than Andrew Cuomo."
But tenant groups emphasized that rent relief is paramount.
"While the eviction moratorium could provide important protections to tenants, it is only a stopgap measure," Deborah Thrope, deputy director of the National Housing Law Project, told Law360. "Tenants will still owe the rent they don't pay at the expiration of the moratorium, even if they continue to experience a reduction in hours or job loss."
A major landlord trade group rejected the measure, also stressing the need for rent relief.
"Not only does an eviction moratorium not address renters' real financial needs, a protracted eviction moratorium does nothing to address the financial pressures and obligations of rental property owners," said Doug Bibby, president of the National Multifamily Housing Council.
"We will continue to aggressively advocate for the federal government to provide state and local aid," added James Whelan, president of the Real Estate Board of New York.
Mnuchin alluded to a "couple billion" in available rent relief funds in his Tuesday testimony, though he provided no further details. Congressional legislation to provide $100 billion in emergency rental assistance passed the House in June but negotiations for a compromise bill have since stalled.
White House spokesperson Brian Morgenstern took a dig at House Democrats in a statement Tuesday. "While Speaker Pelosi and the Democrats play political games and refuse to negotiate in good faith on another round of needed relief, President Trump is helping families overcome unprecedented challenges," he said.
How the moratorium plays out at the jurisdictional level remains to be seen. In New York, tenants have been grappling with rapidly shifting guidance for eviction cases.
A spokesperson for the state's Office of Court Administration said early Wednesday that the rule could serve as an additional defense in court.
"Assuming the CDC eviction rules go into effect as scheduled ... the New York courts will be able to apply these requirements to both pending and newly filed eviction cases using existing procedures for evaluating whether to grant an eviction," spokesperson Lucian Chalfen said.
Marika Dias, attorney and director of the Safety Net Project at the Urban Justice Center in New York City, noted that evictions in the state typically take longer than four months to resolve, likely pushing pandemic-related disputes past the Dec. 31 threshold.
"These declarations and tenants' eligibility for this moratorium will become another protection that tenants will have to fight for and landlords will contest," Dias said. "This will lead to even more complex disputes in court and also more intrusive inquiries into tenants' personal and financial information."
--Additional reporting by Stephen Cooper, Andrew Kragie and Dave Simpson. Editing by Daniel King.
Correction: This story has been updated to accurately reflect the effective date of the rule.
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