Judge Dabney Friedrich, from the U.S. District Court for the District of Columbia, struck down the current eviction moratorium that CDC had been debating extending until 2022. (WSJ)
- Friedrich said that while it was the role of the political branches of government to address the pandemic, current federal law on public health didn’t give the CDC broad authority to impose the moratorium.
- “Because the plain language of the Public Health Service Act unambiguously forecloses the nationwide eviction moratorium, the court must set aside the CDC order,” Judge Friedrich wrote.
WHO WILL BE IMPACTED? The estimates on those in arrears and by how much swings wildly. the Urban Institute looked at all possibilities recently… (UI)
- The Federal Reserve Bank of Philadelphia says as few as 1.4 million could be behind in housing payments owing about $8.4 billion in total.
- Jim Parrot & Mark Zandi believe the number could be as high as 9.4 million households owing a whopping $52 billion.
WHY THIS IS GOOD FOR REAL ESTATE
- Data from Q1 shows that foreclosures are at an almost 5 year low. Considering we are in the middle of an economic downturn this makes no sense. One of the reasons inventory is at all-time lows is because so few foreclosures are happening. Nobody wants a foreclosure wave, but the foreclosure rate should be much higher than it currently is.
- The moratorium isn’t just keeping foreclosed properties off the market, some landlords are refusing to rent out of fear of not being able to remove a bad tenant. The Washington Post last week reported that “[landlords] had stopped renting out vacant properties during the moratorium, believing it was better to lose income than to risk taking on a tenant who couldn’t be forced to pay.”
The administration is probably going to appeal the ruling so an actual actionable decision could be far off. However, I think everyone is hoping the economy takes off and an eviction moratorium can be taken off the books and this whole debate becomes moot.