What Does the Supreme Court's Eviction Moratorium Ruling Mean?

Last week, the U.S. Supreme Court denied a request to block the CDC from imposing their eviction moratorium—giving the federal moratorium another month of life.

The ruling came from a court split 5-4, with Justice Kavanaugh and Chief Justice John Roberts joining Justices Sotomayor, Kagan, and Breyer to block the request made by real estate trade associations and landlords.

The moratorium was set to expire on June 30, but CDC director Dr. Rochelle Walensky imposed a “final” extension until July 31. Moratoriums across states have been interpreted and carried out differently. Some states have kept evictions alive as long as certain parameters are met.

Federal stimulus provided relief funds to renters and landlords across the country. Earlier in the year, Congress appropriated nearly $50 billion in rental relief. But it was reported in February that back rent could fall anywhere between $8 billion to a whopping $52 billion—and that number is probably higher now. Plus, rental assistance has had a slow start featuring plenty of glitches.

How the Supreme Court reached its decision

Unlike with traditional cases, the Supreme Court typically doesn’t give reasons for rulings in emergency cases. However, Justice Kavanaugh offered us a concurring opinion, expressing his hesitancy to vote in favor of the moratorium while understanding the logic behind it.

“The Centers for Disease Control and Prevention exceeded its existing statutory authority by issuing a nationwide eviction moratorium,” wrote Justice Kavanaugh. “Because the CDC plans to end the moratorium in only a few weeks, on July 31, and because those few weeks will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds, I vote at this time to deny the application.”

In essence, his vote was cast on the basis of time. Because the moratorium has been in place since the early days of the pandemic, an extra month won’t make much difference in his eyes. Furthermore, some reports indicate that as much as 15% of renters are behind in rent—amounting to roughly 11 million Americans who are in desperate need of rental assistance.

Adding fuel to the fire, reports indicate a massive backlog in rental assistance, with many applications taking months to evaluate and approve. The most recent evidence comes from Oregon, where the past six weeks have seen $90 million in requested assistance but only $700,000 being distributed.

Justice Kavanaugh did state that, in order for the CDC to extend the moratorium past July 31, there would need to be “clear and specific Congressional authorization.” Otherwise, the CDC does not have the authority to keep the moratorium in place.

The opposition

Four justices voted in favor of striking down the moratorium. The moratorium’s initial challengers explained that the CDC “shifted the pandemic’s financial burdens from the nation’s 30 to 40 million renters to its 10 to 11 million landlords—most of whom, like applicants, are individuals and small businesses—resulting in over $13 billion in unpaid rent per month.”

Because the moratorium does not cancel rent, but simply defers it, the challengers said that the CDC created an environment where the backlog of rent will never fully be repaid. “In reality,” they wrote, “the eviction moratorium has become an instrument of economic policy rather than of disease control.”

Strangely enough, the CDC’s supposed ability to impose a nationwide moratorium stems back to a law passed in 1944 called the Public Health Service Act. The law grants powers to the CDC that allow them to create measures to stop the spread of disease.

In the CDC’s view, they had the power to impose moratoriums because evictions would enable the further spread of COVID-19. Despite Federal District Courts contesting the CDCs actions, the Supreme Court found that given Congress’ decision to briefly extend the moratorium themselves in December, that there was validity to the moratorium.

In closing

Despite the complications and seemingly contradictory statements, the eviction moratorium has been extended until the end of July on the federal level.

What happens after the moratorium ends is yet to be known. It’s highly unlikely that rental assistance will be fully distributed by the end of the month, let alone at a faster pace than now.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.