On Monday, the Consumer Financial Protection Bureau (CFPB) released data suggesting that 2.1 million Americans are more than three months behind on paying rent.
For nearly the last year, there has been a moratorium on evictions to help families who are struggling during the coronavirus pandemic. But when the moratorium concludes, families will be expected to pay back any missed payments.
Whether the moratorium can continue is being decided in court. A federal judge ruled late last week that a federal moratorium on evictions is unconstitutional. The judge, however, stopped short of issuing an injunction, giving the opportunity for an appeal.
"The federal government cannot say that it has ever before invoked its power over interstate commerce to impose a residential eviction moratorium,” Judge John Barker wrote. “It did not do so during the deadly Spanish Flu pandemic. Nor did it invoke such a power during the exigencies of the Great Depression. The federal government has not claimed such a power at any point during our Nation's history until last year."
The Justice Department announced Sunday it is appealing the decision.
“The CDC’s eviction moratorium, which Congress extended last December, protects many renters who cannot make their monthly payments due to job loss or health care expenses,” the Justice Department said in a statement. “By preventing people from becoming homeless or having to move into more-crowded housing, the moratorium helps to slow the spread of COVID-19.
“The Department of Justice respectfully disagrees with the February 25 decision of the district court in Terkel v. CDC 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.”
The CDC is responsible for enforcing the eviction moratorium. The CDC has not responded to whether it plans on making any changes to the program following the judge’s order.
All told, 11 million Americans are currently behind on their rent payments, according to the CFPB. The agency added that there has not been this many Americans behind on rent since the Great Depression.
“We have very little time to prevent millions of families from losing their homes to eviction and foreclosure,” warns CFPB Acting Director Dave Uejio. “At the CFPB, we are working hard to help homeowners and renters as the U.S. begins to turn a painful crisis, caused by the pandemic, into a robust recovery. We know small landlords are struggling, too, with many dipping into savings or using credit cards to make it through the pandemic. We want everyone—homeowners and renters, landlords, and mortgage servicers—to have the tools they need now to avoid unnecessary evictions and foreclosures.”
The CFPB found that Black and Hispanic households as well as workers in the service industry were more likely to be behind with rent.
Federal figures also show it is not just renters who are behind. The CFPB data also found that first-time homebuyers were also struggling with making payments, with 10.8% of those receiving FHA loans falling into delinquency.
The National Apartment Association was among those who have challenged the eviction moratorium.
“Eviction moratoria saddle the apartment industry solely with the responsibility of offering a service without compensation, all while operating at a potential deficit,” said NAA President & CEO Bob Pinnegar in a statement last year. “Rental housing works on extremely narrow margins and, though last paid themselves, owners still need to pay extensive bills.”
If Barker’s ruling is upheld, the next question is what will happen to millions of renters who could suddenly be out of housing.