Note on constitutionality of CDC eviction moratorium
Regulatory Note: CDC Eviction Moratorium Declared Unconstitutional
On February 25, 2021, in Terkel v. Centers for Disease Control and Prevention, the U.S. District Court for the Eastern District of Texas held that the moratorium imposed by the Centers for Disease Control and Prevention (“CDC”) on evictions of certain tenants was unconstitutional because the CDC order exceeded the federal government’s Article I powers under the commerce clause (1) and the necessary and proper clause. The Justice Department filed a notice of appeal on February 27.
The impact of the ruling is not yet clear. The court did not enter an injunction but invited the plaintiffs to seek one if the government “threaten[s] to depart from the declaratory judgment.” The Justice Department said on February 27 that the decision did not extend beyond the particular plaintiffs and did not prohibit the application of the moratorium to other parties. The Terkel plaintiffs do not appear to have reacted yet to that statement.
Several aspects of the CDC order are worth keeping in mind. To begin with, the moratorium is set to expire on March 31, which now reflects just a one-month grace period for evictions. Further extensions are possible, of course. It may be noteworthy that two statutes recently enacted in California and New York impose eviction moratoriums through June 30 and May 1, respectively.
Further, while the CDC order, if it is not enjoined, broadly suspends actions by a landlord to effect an eviction, the moratorium is available only to “covered persons.” In order to qualify as a covered person, a tenant must provide to the landlord (or other person with a right to pursue an eviction) a declaration under penalty of perjury that makes several representations. The tenant’s income must fall below certain thresholds, and the tenant must be unable pay full rent due to a substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses. A tenant also must represent that he or she has used best efforts to find government assistance and to make timely partial payments. Finally, a tenant must declare that there is no available space for occupancy at the same or less housing cost and that the tenant would, if evicted, become homeless or move into a congregate or shared-living setting.
Finally, the CDC order is not the only or the final word on eviction moratoriums. Several (although not all) states have, during the COVID-19 pandemic, either enacted moratoriums or declared them through executive action. The terms of the moratoriums vary significantly, and some are no longer in effect. Separately, Fannie Mae and Freddie Mac (the “Enterprises”) have imposed their own moratoriums on evictions. These moratoriums apply only with respect to multifamily loans that are in one of the Enterprise’s forbearance programs. As a condition to forbearance, a multifamily borrower may not evict a tenant throughout the period of the forbearance on the borrower’s loan. This condition now applies to any borrower that enters forbearance through March 31, 2021.
As a technical point, the Terkel plaintiffs originally challenged the moratorium imposed by the CDC in September 2020. This moratorium, initially set to expire on December 31, 2020, was extended to January 31, 2021, by the Consolidated Appropriations Act, 2021. The moratorium is now embodied in another CDC order issued on January 29, 2021, that amends and modifies the September 4 order. The current order is substantially identical to the September 4 order.
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