The Danger of Ending the US Eviction Moratorium

Over the last year and a half, renters have been safeguarded from the threat of eviction due to late payments as a result of critical legislation passed during the outset of the COVID-19 pandemic. This was enacted to shield individuals and families from some of the effects that the virus had on the US economy. During a time of great uncertainty with the lack of jobs to the risk of health problems, the eviction moratorium relieved some of the burden on citizens. Now, this rule failed to pass Congress and was recently struck down by the Supreme Court following an attempt by the CDC to maintain this safety net. While significant time has passed, renters are still struggling to keep up with their payments as it is “estimated that roughly 2.5 to 3.5 million American households are behind on rent, with landlords owed as much as $17 billion.” Additionally, there will be about “750,000 US households” that will face evictions by the end of this year. As evictions rise sharply over the next few months, the scale at which this will occur will negatively impact the US economy as people will return to worrying about their rent that they may owe from the time they didn’t pay over the course of the pandemic. This can lead to lower job growth, decrease in household consumption, and higher rates of homelessness. Not to mention the risk of spreading the unrelenting variant of COVID-19 that is now resurging in case numbers nationally. On the other hand, there is a need for landlords to be fairly compensated for what they provide as they also have bills to pay in addition to the costs to maintain their properties. Some landlords might be in a similar situation to their renters as they need to catch up on payments from a year ago. Ultimately, both sides of this housing crisis have or will suffer in the coming months. Without immediate action from Congress on meaningful legislation to relieve this tension, the economy will pay dearly for the explosion of this powder keg of debt.

Credit: https://finance.yahoo.com/news/goldman-sharp-rapid-increase-in-evictions-as-moratorium-ends-landlords-owed-billions-133404937.html

An interesting EconTalk episode on property rights

EconTalk on Mine!!

Last week's EconTalk guests spoke about one of the main institutions of economic systems: property rights. Post your comments below.