Landlords, home builders and other housing industry groups are weighing how to respond to the Trump administration’s new policy protecting renters from eviction, with some considering lawsuits and other legal actions challenging the moratorium as soon as it takes effect.
The mounting opposition stems from the fact that the federal government has not put aside new aid to reimburse landlords at a time when their tenants are at risk of falling behind on their rents. Such money must come from Capitol Hill, where lawmakers for months have been at odds over another round of coronavirus aid, leaving housing industry advocates fearful about their future finances under the moratorium.
The National Association of Home Builders, which represents developers, contractors and others in the industry, became one of the first to tease potential legal action: It said on Wednesday that its members had asked the trade group’s leadership to consider filing a lawsuit, prompting the organization to study whether and how its lawyers could bring such a case.
“We understand what the president is trying to accomplish. I don’t think there’s anybody in America that doesn’t sympathize with an effort to keep Americans in their apartments,” said Jerry Howard, the chief executive of the NAHB.
But Howard stressed that landlords—without financial help from Congress—”can’t afford” to enact the president’s moratorium. They said they are now “looking at our legal options” that could involve them trying to seek compensation for carrying out the directive.
It is unclear how a legal challenge could play out, or whether one would be filed. But it could affect about 40 million people who are struggling to pay their rents as a result of the pandemic. These renters faced potential eviction in most states after earlier federal protections expired at the end of July.
When it issued the policy Tuesday, the Trump administration invoked federal public-health laws in what it described as an attempt to help families in need while slowing the spread of a pandemic that has killed more than 180,000 Americans. White House officials say a housing crisis could worsen the country’s outbreak if people are forced out of their homes and into cramped or otherwise unsafe conditions
The White House declined to comment Wednesday.
The early political and legal wrangling could add more urgency to the congressional war over another round of coronavirus relief funds. Democrats and Republicans did not reach any agreement this summer, and assistance programs for the unemployed and renters expired at the end of July. The negotiations are expected to resume this month.
Democrats had hoped to halt evictions during the coronavirus pandemic while setting aside about $100 billion in rental assistance for families. The proposal, included as part of the stimulus bill House lawmakers approved in May, sought to address the fact that pausing evictions alone would not do enough to help families once rents became due, leaving many with a massive bill they would have no way to afford. Senate Republicans did not include significant new rental assistance as part of the bill that Majority Leader Mitch McConnell, R-Ky., put forward in July. A modified version of the proposal could come before the full chamber next week.
President Donald Trump’s order puts in place an eviction moratorium for individuals who make less than $99,000 a year, couples who make under $198,000 a year, or others who received stimulus payments under the Cares Act adopted earlier in the pandemic. Renters must swear under criminal penalty they have done everything in their power to pay rent and obtain other assistance before taking advantage of the new eviction protections.
Otherwise, the policy makes clear that the federal government is not setting aside money to cover balances that could come due in 2021. Instead, senior administration officials pointed to existing resources doled out by the federal government to cities and states as a way to help renters and landlords.
Advocates for low-income families and other Americans struggling to afford their housing costs praised the Trump administration for its approach, which is broader than what Congress enacted earlier in the pandemic. But they still found common cause with groups representing landlords and property managers on the need for additional money from Washington. The absence of new federal support, they said, creates headaches for renters and landlords particularly because they face their own costs and mortgages they must pay.
The National Multifamily Housing Coalition, which represents owners of apartment buildings, acknowledged Wednesday that it is “beginning to look into the legality of this.” Jim Lapides, a spokesman for the group, said the “real solution is rental assistance” to help renters and landlords.
“It is far better to focus on ensuring renters can pay the rent than to try and come up with policies like eviction moratoriums that do not address the root cause and put housing providers at financial risk,” he said in a statement.