Covid-19 and the Housing Crisis: Federal Judge Overturns Eviction Moratorium
As the coronavirus pandemic set in and an economic downturn ensued, many Americans in precarious financial situations were struggling to make rent. In an effort to both curb the spread of the disease from unnecessary movement and to protect vulnerable people, the Center for Disease Control (CDC) issued an eviction moratorium on September 4, 2020 valid through the end of the year. The moratorium detailed a set of eligibility requirements, including proof of substantial loss of household income or extraordinary medical expenses, that would allow renters to submit a declaration of eligibility to their landlord and be legally protected from eviction. The law was broad in nature, suggesting that tenants reach an amicable settlement with landlords that allow them to create a reasonable payment schedule or find private legal assistance given the temporary nature of their situation. In an FAQ released by the government, the CDC’s authority in issuing the moratorium is detailed as “Under long-standing legal authority found at 42 C.F.R. § 70.2, the CDC Director can take public health measures to prevent the interstate spread of communicable diseases in the event of inadequate local control.”
The Trump Administration strongly opposed the policy at the time of its passing, arguing that it left the property owners in a vulnerable position that would then have a domino effect. In an effort to undermine the CDC, they issued a set of guidelines under the aforementioned FAQ permitting landlords to initiate eviction proceedings prior to the policy’s expiration date. Following his inauguration in January 2021, one of President Joe Biden’s first acts in office was to extend the conditional ban on evictions through March 2021 through an executive order. He later modified the extension with a more structured forbearance and foreclosure protection guide to extend the moratorium and the mortgage payment forbearance enrollment window through June 30, 2021. This was coupled with actions across bureaucratic agencies like Housing and Urban Development (HUD) and the Federal Housing Finance Agency to cover 70 percent of existing single-family home mortgages.
The moratorium and its various addendums and extensions have been met with extreme backlash among individual landlords as well as associations and unions, and there have been a barrage of lawsuits filed against the US government as a response. Lauren Terkel was among these plaintiffs, filing her case against the CDC with lawyers from the Texas Public Policy Foundation (TPFF) when a tenant in her four-plex rental house in Tyler, Texas qualified under the CDC moratorium to avoid eviction without paying rent. Lauren Terkel et al. v. Centers for Disease Control and Prevention et al. turned out to be a landmark case, despite dozens of identical cases crowding the courts system, when US District Judge J. Campbell Barker ruled on February 25, 2021 that the CDC had exceeded its authority under the Commerce Clause in establishing the moratorium.
The Commerce Clause is a provision under Article 1, Section 8 of the Constitution that explicitly grants Congress the powers to “regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes.” The CDC order would have to pass what is known as the “substantial effects test,” meaning that the activities addressed in the policy would have to substantially affect interstate commerce in order for the order to be considered valid. The court evaluating the order is expected to conduct an independent study to estimate the impact of the order on business. In recent years, the test has been applied primarily in cases regarding interstate business, and has become particularly relevant in the pandemic as travel restrictions have been put in place for public safety.
The declaratory judgement cited US v. Morrison as a precedent and argued that the case established four “significant considerations” when determining whether a given policy qualifies under the Commerce Clause: economic character, jurisdictional concern, effects of commerce on involved states, and implications of the regulations on business.
Barker, a Trump-appointed judge, addressed each of these points in their relation to Terkel in his decision, first claiming that evictions cannot be established as an economic activity based on precedent. He then argued that there is no explicit link between individual evictions and interstate business, evidence presented did not find that the policy would affect commerce regulations, and that there were limited effects of individual tenants being removed on overall commerce. Baker had chosen not to issue an injunction out of the expectation that his ruling would be subsequently followed by the CDC. His controversial declaratory judgement has reverberated through the courts system as it sets a completely new precedent in cases that have thus far been considered textbook as the CDC moratorium persists.
In response to the judgement, on February 27, the Department of Justice released a statement disagreeing with the district court decision “that the CDC’s eviction moratorium exceeds Congress’ powers under the Commerce Clause and the Necessary and Proper Clause, and the Department has appealed that decision.” If Baker’s decision is allowed to stand when revised by a higher court, the moratorium will be lifted completely, leaving lessees vulnerable unless there is further protective action by a branch of the government. In such a scenario, renters across the nation will have to search for alternative residential options, likely leading to an overcrowding of halfway houses and an increase in the homeless population.
While this drastic downward social mobility would be harmful to society at any point, it would be particularly devastating in the pandemic, potentially causing a resurgence of cases. From a legal standpoint, the declaratory judgement would also have massive implications on the limitations of federal powers in times of emergency and the extent to which the Commerce Clause can be used as justification. Many have agreed with Baker that the principle of the CDC moratorium greatly expands government power to a scope that can be considered dangerous when applied in other scenarios. Nevertheless, it remains to be seen whether this landmark decision will be upheld.
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