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Biden's Treasury has $50 billion to give to renters, but court rulings put millions at risk of eviction before it gets to them

Business Insider logo Business Insider 6 days ago asheffey@businessinsider.com (Ayelet Sheffey)
a person holding a stop sign in front of a crowd: Housing activists gathering in Massachusetts in October. Michael Dwyer/AP Photo © Provided by Business Insider Housing activists gathering in Massachusetts in October. Michael Dwyer/AP Photo
  • Biden extended the CDC's eviction ban by three months, but some courts have ruled the ban illegal.
  • This puts renters at risk of eviction before they get any of the nearly $50 billion in emergency aid from Biden's stimulus.
  • Experts and lawmakers want to strengthen the ban so renters aren't evicted while it's in place.
  • See more stories on Insider's business page.

President Joe Biden has been trying to help renters at risk of eviction, including with elements of his $1.9 trillion stimulus, but the American legal system may get in the way of that.

A year-long federal moratorium on evictions began under President Donald Trump, when he directed the Centers for Disease Control and Prevention to oversee the ban during the pandemic. On his first day in office, Biden extended the ban by three months, and on March 29, two days before it was set to expire, he extended it by an additional three months, to June 30.

However, since the ban was implemented, multiple landlords have filed lawsuits questioning its legality, and of the six lawsuits to end up in federal court, the results have split 3-3. Three ruled in support but courts in Texas, Ohio, and Tennessee have ruled the eviction ban unconstitutional. This has put renters in those states at risk of eviction before they even have the chance to receive aid, and the rulings could jeopardize the 10 million Americans behind on rent payments.

It's basically a toss-up whether the eviction ban will be legal after all the lawsuits run their course, which is an issue for the Treasury Department, which has $50 billion in emergency aid to give to renters, since that aid needs to be distributed before courts start processing evictions again. It's important that the aid reaches renters first so they have the financial assistance to fight their evictions.

"We are running the Emergency Rental Assistance Program every day like we're going to lose the moratorium tomorrow," a Treasury Department official told The Washington Post, who spoke on the condition of anonymity to discuss the program.

Court rulings against the eviction ban

An order by the Texas Supreme Court to require judges to enforce the federal eviction moratorium has expired, and to the alarm of renters and housing advocates, the Texas Justice Court Training Center issued guidance on Wednesday telling judges it's no longer their job to enforce the eviction ban.

"Courts are no longer authorized by the Texas Supreme Court to abate (put on hold) cases based on the CDC eviction moratorium," the guidance said.

This followed a February 25 court decision in Texas that found the CDC's eviction ban unenforceable and unconstitutional.

"We've had a failure of leadership that's going to result in tens of thousands, if not hundreds of thousands, of Texans becoming homeless in relatively short order," Mark Melton, who leads a pro bono team of 175 volunteer lawyers in Dallas, told NPR.

Soon after the Texas ruling, Ohio followed suit on March 11, when a federal judge in Ohio ruled that the CDC overstepped its authority when it banned evictions nationwide.

And on March 16, a Tennessee judge ruled that the eviction ban was illegal, saying in an order that the moratorium was "unenforceable in the Western District of Tennessee." This does not bode well for the 19% of renters in Tennessee who are behind on rent, especially given that in Memphis, landlords have filed more than 1,300 eviction notices in the past year, according to Princeton University's Eviction Lab.

Landlords and housing associations have supported the rulings against the eviction ban. For example, Josh Kahane, the attorney for the group of landlords in Tennessee who sued the CDC, said in a statement that the ruling "puts an immediate end to the serious and unlawful infringement on constitutional standards and fundamentally protected rights."

And the National Association of Home Builders, which has over 1,700 members - some of which own thousands of housing units - said in a statement that the eviction ban should not apply to any of its members.

Protecting renters from eviction

Lawmakers and experts are working to protect renters from loopholes under the federal eviction ban. John Pollack, a staff attorney at the Public Justice Center - a civil legal aid office - told Insider that the most important thing a renter should do right now is seek legal counsel to understand the rights they have if they are facing eviction.

"If every tenant had a lawyer, the landlords would not be trying to do half of the things they're doing, and if they did, there would be a lawyer there to basically assert what the tenants' rights were," Pollack said. "But expecting that tenants are going to understand this extremely complicated legal situation we have now, without a lawyer, is impossible. It's just not possible."

To help protect renters, at the end of March, the Municipal Court of Philadelphia ordered that landlords are required to apply to the city's rental assistance program and enroll in the Eviction Diversion Program before they can file an eviction in court.

The Philadelphia Inquirer editorial board wrote that although the ruling only extends 45 days, it will significantly help renters struggling during the pandemic.

"Considering the detrimental harm of evictions, from the court filing to the lockout, for individuals and communities, an eviction filing has to be a tool of last resort - not the first step," the editorial board wrote.

And Rep. Maxine Waters of California told Treasury Secretary Janet Yellen at a hearing in March that she wants the Treasury Department to look into the role Congress can play to "straighten out this confusion and to help stabilize this rental assistance."

Pollack said: "We can have all the rental assistance in the world, but if all the tenants get evicted before the rental assistance gets to them, it's not going to matter."

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