On Monday, March 29, two days before its expiry, the Centers for Disease Control (CDC) released an order extending the national eviction moratorium through June 30, 2021, as a response to the continuing coronavirus pandemic and economic crisis. The moratorium by the CDC has been in effect since September 4, 2020, and has been extended three times including the most recent one. Before that, the CARES Act included a moratorium that began March 27, 2020, and effectively ended August 23, 2020. Except for the 12 days between the CARES Act moratorium ending and the CDC’s moratorium beginning, the nationwide eviction moratorium has been in place for a whole year. On the face of it, this legislation will protect more than eight million American households that are currently behind on rent payments. However, the moratorium is a superficial solution to an issue that has existed long before the coronavirus pandemic, and at its worst, it could exacerbate existing wealth disparity in the country.

Despite the ongoing halt on evictions, the CDC’s order includes many caveats and loopholes for landlords to exploit. For example, a landlord may claim that they are evicting a tenant because they do not wish to renew a lease and not because of nonpayment. The order includes other elements that may exclude some renters from receiving eviction protection. Renters who seek protection under the moratorium must first know that it exists, and then determine if they are eligible. To be eligible for the protection a tenant must:

  • Have exhausted all government rental assistance resources;
  • Not expect to earn more than $99,000 in 2021, or not needed to report income to the federal government in 2020, or received a stimulus payment this year;
  • Have experienced a substantial loss of household income due to the COVID-19 pandemic;
  • Have been making an effort to pay partial rent payments as fully and timely as possible; and
  • Be in a situation where eviction will cause them to become homeless or cause them to move into a home that is already fully occupied.

If the renter meets all of the qualifications above, they must sign a declaration, under penalty of perjury, that they are eligible for the protection (a pre-written declaration is available here) and send it to their landlord. Even if a tenant qualifies for protection and has taken all of the necessary steps to obtain it, a landlord may begin the eviction process at any time. In some areas, tenants that are protected under the moratorium can still be evicted if the landlord files suit. 

There are federal resources available to impacted tenants to pay their rent. The Emergency Rental Assistance Program has made $25 billion available to those struggling to pay rent or utilities due to the COVID-19 pandemic. In some states, landlords may apply for rental assistance on behalf of their tenants or assist in the application. However, in other states, landlords are not permitted to be involved in the process and only tenants may pursue the assistance. Small landlords that can’t access rental assistance are starting to sell their properties to new owners, taking them out of the rental supply. As the rental stock decreases, demand rises, and the remaining rental properties increase in cost. According to the National Rental Home Council (NRHC), 11.0 percent of single-family rental home property owners said they had to sell at least one of their properties, and 12.0 percent said they had to sell all of their properties. Those that can currently afford to buy property are among the most financially stable.

According to the Federal Reserve Bank of New York’s quarterly report on national household debt and credit, in the fourth quarter of 2020, mortgage originations reached just below $1.2 trillion in nominal terms (the highest this series has seen since its start in 2000). Of those originations, 71.0 percent went to borrowers with credit scores over 760. Home equity is a pillar of financial stability and a vehicle for generational wealth. If only the wealthy can afford to own homes and lower-income households can’t even afford to pay their rent, the wealth gap in the U.S. will continue to widen. Unfortunately, the wealth gap and housing inequalities in the U.S. are tied to race and ethnicity.

The Census’ most recent household pulse survey shows that race and ethnicity factors are correlated with renters’ payment status’. Of all Black households that rent, 21.8 percent are behind on payments. This same figure is 19.7 percent for Asian households, 19.1 percent for both Hispanic or Latino households and households of two or more races (and any other race not otherwise mentioned), and lastly, 10.9 percent for White households. While all of these figures are higher than ideal, the disparity between them is significant. One characteristic is fairly uniform among all households current behind on rent, their annual income.

The unfortunate truth is that around 70 percent of the over 8 million households not currently caught up on rent payments in the U.S. have an annual household income of less than $50,000 (around $18,000 less than the 2019 national median household income). When the moratorium expires, these households may not be able to pay their accumulated rent debt. If those currently protected are unable to pay their debt when it expires, they will not only face eviction but potentially homelessness. For some, serious legal consequences are also a possibility. In a single state, Arkansas, nonpayment of rent is a criminal act and failure to vacate after an eviction is a felony.

Legislation aiding renters in debt to make their past-due payments will be crucial in lessening the impact that the end of the moratorium will have. A more complete and widespread rental assistance program would help keep small struggling landlords from selling their properties and help keep renters from losing their homes. While this assistance would provide help in the short-term, additional planning efforts are needed to address a long-running housing affordability problem that the pandemic has only brought into clearer focus.