Supreme Court: Government cannot make housing providers continue to bear financial burden of pandemic

Supreme Court: Government cannot make housing providers continue to bear financial burden of pandemic

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The U.S. Supreme Court effectively ended the CDC’s national eviction moratorium on Thursday night, agreeing with the Alabama and Georgia Associations of REALTORS® that the CDC exceeded its statutory authority in issuing its latest eviction moratorium. The Court’s decision affirmed that non-legislative moratoriums such as the CDC’s are unconstitutional and casts even more legal doubt on Gov. J.B. Pritzker’s eviction moratorium.

Throughout the strongly worded eight-page opinion, the Court rejected the government’s arguments that potential hardships tenants might experience without the moratorium, outweighed the infringement on property rights and financial hardships that housing providers are experiencing because of the moratorium.

In addressing the hardships to each side, the Court recognized the fact that tens of billions of dollars have been allocated for relief, and, while such funds are slow to be delivered, the Court reasoned:

“The moratorium has put millions of landlords across the country at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Despite the CDC’s determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership – the right to exclude.”

The Court went on to state, “It is indisputable that the public has a strong interest in combating the spread of COVID-19. But our system does not permit agencies to act unlawfully even in pursuit of desirable ends.”

Holding that the CDC did not have proper statutory authority to implement such a moratorium, the court noted the “unprecedented” and “breathtaking” power the CDC was attempting to assert with the eviction moratorium, and pointedly stated that, “It is hard to see what measures this interpretation would place outside of the CDC’s reach.” The Court even went so far as to suggest the government’s reasoning could justify mandates for free grocery delivery, requiring manufacturers to provide free computers to enable people to work from home, or ordering telecommunications companies to provide free high-speed Internet service to facilitate remote work.

The Court’s decision immediately stops the CDC from enforcing its moratorium nationwide. Because the decision was based strictly on the agency’s statutory authority, it does not directly affect any moratorium a state may separately have in place.

The National Association of REALTORS® (NAR) said in a statement that the Court’s decision was the “correct one.” The CDC’s moratorium was an “unlawful policy that places financial hardship solely on the shoulders of mom-and-pop housing providers,” NAR said.

What does this mean for Illinois?

Despite Gov. Pritzker’s public statements that he was ending his eviction moratorium, Pritzker recently, quietly extended it once again to end now on Sept. 18.

When asked to explain his reasoning for extending his moratorium until mid-September, and not ending it at the end of August as he had promised since May, Pritzker’s office stated that the intent of the extension was to bring the state’s moratorium in line with the federal moratorium. “We’ll match whatever the federal government does…Pending any changes, we’ll adjust as we need to.”

“The Supreme Court characterized the CDC’s moratorium as based upon the ‘determination that landlords should bear a significant financial cost of the pandemic,’” said Illinois REALTORS® CEO Jeff Baker. “Gov. Pritzker’s moratorium is no different. Housing providers in Illinois have been forced to continue operating at full cost for the duration of the pandemic while waiting over 18 months for any real financial relief.”

Congress has allocated almost $50 billion nationwide to rental assistance programs administered by cities and states. In total, over $1 billion of that aid has been sent to Illinois for distribution by the state, cities and counties. Evictions are costly, time-consuming and a last resort for housing providers. With the rental assistance finally provided by Congress, tenants and housing providers have the means to ensure there are as few evictions as necessary.

Baker said “The governor quietly extended his eviction moratorium to match that of the CDC, despite the president’s own acknowledgment that the federal action was unconstitutional. It’s time for the governor’s moratorium to end. The priority now should be on the efficient distribution of rental assistance to Illinois housing providers.”

For help finding a rental assistance program, visit the Illinois Housing Development Authority’s website.

 



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