Supreme Court blocks Biden administration’s latest ban on evictions
BY MELISSA QUINN
8/27/2021
Washington — The Supreme Court on Thursday lifted the Biden administration’s newest federal ban on evictions, granting a bid from a group of landlords to block the pandemic-related protections for renters facing eviction in most of the country.
In an unsigned opinion with the three liberal justices in dissent, the divided court said that “careful review” of the case “makes 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. But that has not happened,” the court said. “Instead, 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. It strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts.”
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The court said that “if a federally imposed eviction moratorium is to continue, Congress must specifically authorize it.”
The White House issued a statement late Thursday, saying the Biden administration is “disappointed” the Supreme Court blocked the moratorium amid another surge in COVID-19 cases.
“In light of the Supreme Court ruling and the continued risk of COVID-19 transmission, President Biden is once again calling on all entities that can prevent evictions – from cities and states to local courts, landlords, Cabinet Agencies – to urgently act to prevent evictions,” White House spokesperson Jen Psaki said.
In a dissenting opinion, Justice Stephen Breyer noted the recent spike in COVID-19 transmission rates and warned that allowing evictions to resume could have dangerous public health consequences.
“The CDC targets only those people who have nowhere else to live, in areas with dangerous levels of community transmission,” wrote Breyer, joined by Justices Sonia Sotomayor and Elena Kagan. “These people may end up with relatives, in shelters, or seeking beds in other congregant facilities where the doubly contagious Delta variant threatens to spread quickly.”
The questions raised by the case, Breyer continued, “call for considered decisionmaking, informed by full briefing and argument,” and “their answers impact the health of millions.”
The landlords and real estate agents from Alabama and Georgia asked the high court last week to halt the latest iteration of the Centers for Disease Control and Prevention’s (CDC) moratorium on certain residential evictions, returning a battle over the ban to the Supreme Court for the second time.
The landlords argued the CDC’s ban, issued following a public protest from some congressional Democrats, was “intended to buy time to distribute rental assistance and mollify certain” lawmakers and warned the ban was harming landlords, who are losing up to $19 billion each month.
“Unless this court vacates the stay — and does so promptly — Congress will know that it can legislate through pressure campaigns and sit-ins rather than bicameralism and presentment, the Executive Branch will know that it can disregard the views of a majority of justices with impunity, and this court will know that its carefully considered rulings will be roundly ignored,” they told the court.
But the Biden administration had urged the justices to leave the ban untouched, telling the Supreme Court that since the CDC last indicated it would end the eviction moratorium July 31, “the trajectory of the pandemic has since changed — unexpectedly, dramatically, and for the worse” because of the highly contagious Delta variant.
Initially issued by the Trump administration in September 2020 to prevent the spread of COVID-19 and extended several times, the Supreme Court kept the CDC’s earlier eviction ban in place with a 5-4 decision in late June. Justice Brett Kavanaugh, who provided the crucial fifth vote, said he believed the health agency likely exceeded its statutory authority by issuing the nationwide moratorium, yet left the order untouched because it was set to expire July 31.
Days before the moratorium was set to end, the White House said the CDC would not issue another extension and urged Congress to take action. But lawmakers failed to do so, and the eviction ban lapsed. In protest of the expiration, Democratic Congresswoman Cori Bush of Missouri slept outside the U.S. Capitol to pressure the Biden administration to grant renters a reprieve.
Mr. Biden initially rebuffed the calls for him to act, saying his administration would be unable to extend the protections for renters in light of the Supreme Court’s decision. But congressional Democrats continued their pressure campaign, and the CDC ultimately issued a new ban in areas of “substantial and high” levels of COVID-19 transmission until October 3, which covered more than 90% of the country.
Mr. Biden acknowledged the new moratorium may not pass constitutional muster, but told reporters that “by the time it gets litigated, it will probably give some additional time while we’re getting that $45 billion out to people who are, in fact, behind in the rent and don’t have the money.”
Congress provided $46 billion for rental assistance in two COVID-19 relief packages, but the aid has been slow to reach renters struggling to pay rent during the pandemic. The Treasury Department said Wednesday that just $5.1 billion has been disbursed so far, with 89% of the money approved by Congress for the federal rental aid program not yet distributed.
The most recent order from the CDC prompted another round of legal challenges, with the landlords from Alabama and Georgia again asking a federal court in the District of Columbia to halt the moratorium.
A U.S. district judge declined to put the eviction ban on hold but questioned its legal footing. A three-judge panel on the federal appeals court in D.C. also allowed the moratorium to remain in place.
Renters receive whopping $475,000 tenant buyout – the largest recorded in San Francisco
7/31/2021
Landlords in San Francisco looking to kick out tenants in a bid to increase rents are shelling out more money ever recorded to those who want to voluntarily leave, the reports issued with the city’s rent board showed.
In May, a tenant buyout reached an all-time high of $475, 000 to a couple who rented a luxury 7-bedroom Presidio Heights apartment for a long time.
“Some people’s reaction is that this is crazy,” San Francisco real estate owner Steven MacDonald said. “It isn’t.”
MacDonald has talked terms on the amount settlement for the renters in their 60s who occupied the apartment for three decades.
The city’s rent control system naturally results in tenant buyouts that even come near half a million dollars. These buyouts allow renters to stay in San Francisco amid market forces.
Huge buyouts are usually provided to longtime renters who occupied upmarket units that stayed at low market value.
“Any tenancy in San Francisco that is 30 years old is, by definition, half the market rate,” he said.
The San Francisco Rent Board reported that buyout negotiations last year have exceeded 330, having $50, 000 as the average payout.
Tenants rights advocate Shanti Singh of the Tenants Together renters’ coalition said that buyouts reaching six figures are “clearly an outlier,” as reported by San Francisco Chronicle.
“The majority of buyouts are orders of magnitude less than that,” Shanti said. “They’re paltry. They’re $10,000 to $20,000. They’re barely enough to keep you afloat with a few months’ reprieve, given how crazy the real estate market is. They’re not setting you up for life.”
The renters who were paid $475, 000 asked for anonymity. They resided in a six-story brick apartment building at Laurel and Washington streets and were among other tenants who raised their complaints regarding the disturbing building renovation by the landlord.
Evictions During COVID-19: Landlords’ Rights and Options When Tenants Can’t Pay Rent
Tips, resources, and advice for landlords whose tenants aren’t able to pay the rent due to the coronavirus outbreak.
By Ann O’Connell, Attorney
11/01/2020
Many renters are facing financial challenges resulting from coronavirus-related business shut-downs, furloughs, layoffs, and stay-at-home orders. The longer this crisis goes on, the more likely it is that many will not be able to pay their rent. When renters default on rent, landlords suffer, and might not be able to meet their own financial obligations, such as making the mortgage payments on the rental property.
Here are some suggestions about how landlords can mitigate the financial impact of tenant defaults during the COVID-19 outbreak.
Terminations and Evictions
Under normal circumstances, when tenants don’t pay rent, landlords have the option of terminating the tenancy (by serving the tenant with either a pay rent or quit notice or an unconditional quit notice, depending on the applicable laws). When tenants don’t pay the rent or move out by the deadline given in the notice, landlords can then file an eviction lawsuit to have the tenants physically removed from the rental.
However, health and safety concerns due to COVID-19 have led many states, cities, counties, and courts to place moratoriums on evictions. The scope of these temporary bans on evictions varies greatly: some have banned any and all action relating to evictions, while others simply postpone hearings on evictions until the court can arrange a hearing via telephone or video.
If you are a landlord in an area with an eviction moratorium, you might still be able to file eviction papers with the court, but your case might not be heard for a while. However, even if there are no bans in place, evicting tenants who can’t pay the rent due to the coronavirus crisis probably shouldn’t be your first recourse. Aside from optics (you don’t want to get a reputation as the ruthless landlord who booted tenants out of their home in the middle of a stay-at-home order), if you remove tenants right now, you’re going to be faced with having to disinfect the rental, advertise the rental, screen new prospective tenants (of which there might be very few), sign a new lease or rental agreement, and get the new tenants moved in—all while taking measures to abide by emergency guidelines and health and safety measures.
Consider the following options instead.
Evaluate Your Personal Financial Situation
Take a moment to evaluate your own finances. As dire as it sounds, it might be time to take stock of what could happen in a worst-case scenario. Most landlords have likely considered the situation where tenants don’t pay rent, as this can happen at any time. But there’s no denying that this is a different situation—what will happen if your tenants can’t pay for a long time, and your options for finding new (paying) tenants are slim?
Your assessment of how this worst-case scenario will affect your ability to pay your mortgage (if any) and your personal bills will inform how you respond when your tenants can’t pay their rent.
- If your financial situation looks grim: If your ability to pay the mortgage on your rental property hinges on month-to-month rental income, you should take actions to prevent your own default This includes options discussed below, such as contacting your lender and proactively seeking arrangements with tenants that allow them to make at least partial payments.
- If you have a few months’ reserves: If your personal reserves or financial position won’t feel too much of a pinch if tenants aren’t able to pay rent for a while, you still might have to make some compromises to retain good tenants. If you have tenants who have previously been reliable and are simply finding it hard to make ends meet currently, do what you can to take some pressure off them—see the discussion below about working out a temporary solution with tenants.
Try to Work Out a Temporary Solution With Tenants
Depending on how desperately you need to receive income from your rental, you have a few options for working with tenants who aren’t able to pay rent because of COVID-19. Consider the following possible arrangements.
- Forgive rent. If your situation allows for it, you could waive rent for a month, with an agreement to revisit the payment arrangement on a certain date. A landlord in Bakersfield recently did this for his tenants.
- Postpone rent. You could offer to postpone rent payments for a month, with an agreement that it will be repaid. Your repayment arrangement could state that the rent owed could be spread out over time, paid all at once, or paid when (if) a stimulus check
- Reduce rent. If you can, consider dropping the rent temporarily to a level that enables you to meet your obligations but forgoes profit for the time being. For example, if you normally collect $1200 a month, but your mortgage is $900 a month, you could temporarily drop rent to $900 to make sure you at least don’t get in trouble with your lender.
Before deciding to make any of these adjustments, try talking to your tenants. Ask them straight out what they think they can make work. If you’re able to accommodate their suggestions, chances are higher that they will do everything they can to hold up their end of the bargain. Be sure to put any agreements in writing, preferably as an addendum to your current lease or rental agreement that includes all details of the arrangement.
Look for Outside Assistance
Even if you think you can float a month or two without rental income, you still might want to consider taking some measures now to protect your position in the event that the coronavirus crisis lasts longer than your cushion can handle. If you’re already feeling the pinch, take these actions immediately.
Attend to Your Mortgage
At this point in the COVID-19 crisis, most private lenders are willing to work with borrowers to ensure that they don’t lose their homes. Call your lender directly and ask what steps it is taking to assist borrowers who can’t meet their mortgage obligations due to the coronavirus pandemic.
- If your loan is owned by Fannie Mae or Freddie Mac, you might be able to delay making payments for a certain period of time without incurring late fees or getting hit with a credit score penalty.
- Look into your options under the Coronavirus Aid, Relief, and Economic Security Act.
- The Federal Housing Administration (FHA) has put in place a foreclosure moratorium for single family homeowners with FHA-insured mortgages.
- Visit your state’s website to find out if the state is offering assistance to homeowners. For example, New York has announced a delay of mortgage payments for 90 days. Many other states are postponing any foreclosure actions indefinitely. Find your state’s website at State and Government on the Net.
Look Into Property Tax Breaks
Some states and counties are extending the deadline for paying property taxes, or cancelling late fees and interest. Check your county’s tax assessor’s website to see if this is an option where your property is located.
Seek a Loan
Consider seeking a loan from family, friends, or private lenders. The U.S. Small Business Administration might be another source of assistance—its disaster loan assistance web page has a wealth of information. You can also contact your regular bank or credit union and inquire about what assistance it can offer.
Research Options for Your Renters
Some areas are beginning to offer rent vouchers or emergency funds to renters in need. For example, the Pennsylvania Apartment Association is collecting donations for funds to give to renters who can’t pay rent. Currently, renters’ needs are getting a lot more attention in the press than landlords’ needs, and there are already a lot more resources being made available for renters. It’s in your best interest to research these options and bring them to your renters’ attention—do what you can to help your tenants pay you.
Landlords are getting squeezed between tenants and lenders
By ANNE D’INNOCENZIO
NEW YORK (AP) — When it comes to sympathetic figures, landlords aren’t exactly at the top of the list. But they, too, have fallen on hard times, demonstrating how the coronavirus outbreak spares almost no one.
Take Shad Elia, who owns 24 single-family apartment units in the Boston area. He says government stimulus benefits allowed his hard-hit tenants to continue to pay the rent. But now that the aid has expired, with Congress unlikely to pass a new package before Election Day, they are falling behind.
Heading into a New England winter, Elia is worried about such expenses as heat and snowplowing in addition to the regular year-round costs, like fixing appliances and leaky faucets.
Elia wonders how much longer his lenders will cut him slack.
“We still have a mortgage. We still have expenses on these properties,” he said. “But there comes a point where we will exhaust whatever reserves we have. At some point, we will fall behind on our payments. They can’t expect landlords to provide subsidized housing.”
The stakes are particularly high for small landlords, whether they own commercial properties, such as storefronts, or residential properties such as apartments. Many are borrowing money from relatives or dipping into their personal savings to meet their mortgage payments.
The big residential and commercial landlords have more options. For instance, the nation’s biggest mall owner, Simon Property Group, is in talks to buy J.C. Penney, a move that would prevent the department store chain from going under and causing Simon to lose one of its biggest tenants. At the same time, Simon is suing the Gap for $107 million in back rent.
Michael Hamilton, a Los Angeles-based real estate partner at the law firm O’Melveny & Myers, said he expects to see more retail and other commercial landlords going to court to collect back rent as they get squeezed between lenders and tenants.
Residential landlords are also fighting back against a Trump administration eviction moratorium that protects certain tenants through the end of 2020. At least 26 lawsuits have been filed by property owners around the country in places such as Tennessee, Georgia and Ohio, many of them claiming the moratorium unfairly strains landlords’ finances and violates their rights.
Apartment dwellers and other residential tenants in the U.S. owe roughly $25 billion in back rent, and that will reach nearly $70 billion by year’s end, according to an estimate in August by Moody’s Analytics.
An estimated 30 million to 40 million people in the U.S. could be at risk of eviction in the next several months, according to an August report by the Aspen Institute, a nonprofit organization.
Jessica Elizabeth Michelle, 37, a single mother with a 7-month-old baby, represents a growing number of renters who are afraid of being homeless once the moratorium on evictions ends.
The San Francisco resident saw her income of $6,000 a month as an event planner evaporate when COVID-19 hit. Supplemental aid from the federal government and the city helped her pay her monthly rent of $2,400 through September. But all that has dried up, except for the unemployment checks that total less than $2,000 a month.
For her October rent, she handed $1,000 to her landlord. She said her landlord has been supportive but has made it clear he has bills to pay, too.
“I never had an issue of paying rent up until now. I cry all night long. It’s terrifying,” Michelle said. “I don’t know what to do. My career was ripped out from under me. It’s gotten to the point of where it’s like, ‘Am I going to be homeless?’ I have no idea.’”
Some landlords are trying to work with their commercial or residential tenants, giving them a break on the rent or more flexible lease terms. But the crisis is costing them.
Analytics firm Trepp, which tracks a type of real estate loan taken out by owners of commercial properties such as offices, apartments, hotels and shopping centers, found that hotels have a nearly 23% rate of delinquency, or 30 days overdue, on their loans, while the retail industry has a 14.9% delinquency rate as of August.
The apartment rental market has so far navigated the crisis well, with a delinquency rate of 3%, according to Trepp. That’s in part because of the eviction moratorium, along with extra unemployment benefits from Washington that have since expired.
“There are bad actors, but the majority of landlords are struggling and are trying to work with a bad situation,” said Andreanecia M. Morris, executive director of HousingNOLA, a public-private partnership that pushes for more affordable housing in the New Orleans area.
Morris, who works with both landlords and tenants, said that government money wasn’t adequate to help tenants pay their rent, particularly in expensive cities. She is calling for comprehensive rental assistance.
She fears that residential landlords will see their properties foreclosed on next year, and the holdings will be bought by big corporations, which are not as invested in the neighborhoods.
Gary Zaremba, who owns and and manages 350 apartment units spread out over 100 buildings in Dayton, Ohio, said he has been working with struggling tenants — many of them hourly workers in restaurants and stores — and directs them to social service agencies for additional help.
But he is nervous about what’s next, especially with winter approaching and the prospect of restaurants shutting down and putting his tenants out of work. He has a small mortgage on the buildings he owns but still has to pay property taxes and fix things like broken windows or leaky plumbing.
“As a landlord, I have to navigate a global pandemic on my own,” Zaremba said, “and it’s confusing.”
