Federal and State Eviction Bans Are Forcing Some Landlords Into Poverty

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Whether those who have imposed COVID lockdowns planned to give big, Federal Reserve-connected banks titanic gifts in the form of foreclosed properties, or the effect is a poisonous byproduct of the unconstitutional policies, Donald Trump’s CDC policy (which now-President Biden is continuing) to prohibit landlords from evicting tenants is having precisely that disastrous effect.

And that’s something about which free-market economists warned almost a year ago.

This portion of the federal terror campaign began on September 4, 2020, when the CDC issued a “temporary moratorium” on landlords evicting tenants who had broken their contracts and not paid. Shortly thereafter, numerous groups and individuals brought suit against the CDC and Department of Health and Human Services (HHS) in numerous federal district courts.

In two of those suits, the government-paid judges found in favor of...the government.

But four individuals and the National Apartment Association (NAA) got legal help from the New Civil Liberties Alliance (NCLA) to file suit against HHS Secretary Alex Azar, CDC Acting Chief of Staff Nina Witkofsky, and their respective agencies, and the result was different.

On February 26, Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas explicitly ruled against the CDC and its authoritarian prohibition of landlords evicting deadbeat tenants. The judge was adamant, writing: "Although the COVID-19 pandemic persists, so does the Constitution."

And while his point about the spread of the COVID-19 pathogen being a pandemic in the original meaning of the wordis questionable, given that the World Health Organization in 2009 lowered the definitional threshold of the word “pandemic”, his point about the Constitution is correct.

At least in theory. Many politicians and bureaucrats completely disregard the so-called rules they swear to uphold.

And the CDC and HHS -- be they under the “control” of Trump or Joe Biden – seem so eager to break the Constitution, they immediately got the Justice Department, to appeal Judge Barker’s decision.

Meanwhile, in another region of the U.S., another set of landlords brought suit in a case called “Skyworks, Ltd. Et al. v. Centers for Disease Control and Prevention et al.”. Heard and decided by Judge Phillip Calabrese and Magistrate Judge Carmen E. Henderson in the U.S. District Court for the Northern District of Ohio, these plaintiffs emerged victorious on March 10.

But, under Biden, the bureaucrats will continue to burn our tax cash with appeals. And while they do, evidence of the ill effects of the CDC moratorium (which is supposed to end on March 31, but never should have begun) appear, along with a new wrinkle in the ugly face of government thuggery.

For the past few months, many state governments have imposed their own moratoriums.

And, be they the result of the federal moratorium or those imposed by the states, the angering, troubling tales abound.

On February 23, Reason published a powerfully worthwhile piece and video highlighting some of them. And there are key lessons all can learn from what these moratoriums are doing to destroy landlords’ lives and ruin housing markets.

Take,Chao Huai Gao, for example. As Jim Epstein writes for Reason, Gao is: 

…an immigrant from Zhengzhou, China. He owns a modest two-story house in Queens and isn't rich enough to forgo rental income.

And Gao’s life has been hobbled, thanks to the CDC.

Gao came to the U.S. in 1999, working in New York restaurants and nail salons and doing interior renovation. ‘I haven't taken a day off since I came to America,’ he says. In 2017, he and his wife, who is a caretaker, made a down payment on a house as an investment property, supplementing their savings with a loan from their family in China. To cover their mortgage, they rented out both floors and moved into a cheap studio apartment nearby with their two young daughters.

The tale unfolds like something from a tragic film.

In March 2020, the college students sharing the second-floor apartment gave notice that they were moving out. After the apartment was vacated, a neighbor alerted Gao that he noticed that the lights were on at night. Soon after, Gao discovered that one of his former tenants had given her keys to a friend who had moved in without permission.

NY Governor Andrew Cuomo’s gang of bureaucrats will not “permit” Gao to evict the squatters.

Gao tells Reason that he's in a state of personal crisis, hemorrhaging money, and consumed with worry about losing his home.

Adds Epstein:

One Chinese immigrant landlord, who asked to remain anonymous, reports that she worked as a housekeeper at a hotel that recently closed down. She says her tenant stopped paying rent over the summer and was demanding a $12,000 cash payment to move out.

And as Kathianne Boniello and Georget Roberts report for the New York Post, Cuomo’s prohibition has left one property owner in such dire straits, she’s been forced to live in her car these winter months.

Shawna Eccles, 30, says in court papers she sleeps on the couches of friends and relatives whenever she can, and in her four-door Toyota when she can’t, after fighting and failing for months to evict Sharita Patterson, 33, from the two-family home in Carnarsie.

In court papers, Eccles alleges facts that could make one grind one’s teeth. The authors note that Patterson: 

…checked a box on a ‘hardship declaration’ form, claiming she’s been financially impacted by COVID-19 and is unable to move. Under the new rules, New Yorkers had until Feb. 26 to fill out the form, which automatically pauses their evictions. Patterson, who allegedly owes $14,700 in back rent on the two-bedroom pad, bought a new car during the pandemic, according to court papers.

Incredible.

On the state level, the claim by the government that its agents can prohibit landlords from evicting deadbeat tenants is exposed as fraudulent by the Contract Clause of the US Constitution, which strictly prohibits state governments from infringing on the fulfillment of a private contract. It’s a shame more people are not aware of this, and don’t take appropriate action to oppose this kind of tyranny by Cuomo and other state politicians.

On the federal level, the DC gang’s claim that they can interfere with the private contracts of landlords and renters hinges on not only a misreading of the Interstate Commerce Clause (Article One, Section Eight) of the US Constitution, but also on an unconstitutional statute rolled out by friends of FDR in 1944. 

Thus far, the feds have argued that Section 361 of the “Public Health Service Act” (ahh, yes, “service” and “public health” – two amorphous terms politicians use to attack and threaten people and their property) simply gives them the power to intercede in and interfere with private contracts over the rental of private property.

But their “rationale” is faulty. In fact, on a federal level, the idea that the feds can block or “regulate” any act of peaceful commerce going over state borders is patently, obviously unconstitutional, and state attempts to interfere run afoul of the aforementioned Contract Clause.

And the effects of such immoral political pandering to “the poor” renters and threats against the supposedly “evil” landlords are manifest for anyone to see.

It doesn’t take an economist to see predict the market consequences of politicians making it nearly impossible for landlords to evict bad tenants.

Fewer people will enter the rental market. Fewer spaces will be open for rent. Once the COVID-19 recession someday ends, fewer landowners will be willing to risk their properties and capital to offer rooms. Prices will rise. The pop media will excoriate the evil property owners for asking so much. Politicians will offer subsidies, government housing, and more threats against landlords to lower their prices or keep them at a certain low level through insane “rent control” edicts.

The ill effects of the CDC and state policies are clear. We either can learn from them and teach the lessons to others, or be victims of people at the CDC and thugs like Andrew Cuomo.

It’s up to us to do what’s right.

Related: LA Political Elite Tries To Seize Apartments Where Owner Might Raise Rent

Rep. Omar’s Bill Would See Feds Seize Rentals If Landlords Try to Collect Rent During Virus 'Emergency'

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