In 2020, the Centers for Disease Control and Prevention (CDC) issued an order that bars landlords from evicting tenants who do not pay rent due to the COVID pandemic. Under the CDC order, landlords cannot evict tenants making less than $100,000 per year who had been adversely affected by the pandemic’s economic shutdown, had lost income or work, or had high medical bills, and would face homelessness if they were evicted. Instead, landlords can try to recoup the missed rent payments in the future. Some states and localities issued their own similar orders. Although aimed at helping renters through the crisis, these government directives harm communities by reducing housing stock and endangering the solvency of smaller landlords who might rent out a room or a second house. 

The federal government also began a massive spending spree designed to replace lost wages and assist with housing costs during the pandemic. The new government “stimulus” spending lowered eviction rates and helped households reduce debt even as the unemployment rate exceeded ten percent. And before leaving office, President Trump signed yet another stimulus bill for $25 billion in housing assistance.  

Recent studies on pandemic-related evictions and housing assistance paint different pictures of the problem and the solution. Research by Dr. Salim Furth, for example, found that even when the labor market was at its worst in mid-2020, evictions showed little sign of spiking. The Federal Reserve Bank of Philadelphia found that renters are $8.4 billion behind on their rent, but other research estimates rent arrears between $13 and $25 billion in January 2021. And none of these studies measure the effects of President Trump’s $25 billion in emergency assistance that will help renters catch up on past-due rent.  

But as renters receive government assistance, landlords do not get paid. The low bar to claim financial distress encourages renters to skip rent payments, which has put individual landlords especially at financial risk. Landlords rely on rent payments to pay their mortgages and property taxes. Experts warn that smaller landlords may have to sell their rental units, which will reduce available rental stock and ultimately raise rent prices. Even if they can afford to keep their properties, landlords may have to reduce investment in their rental units and delay or forgo repairs.

The government’s eviction moratoriums take money from landlords with no promise to pay it back. Landlords must still meet mortgage and tax obligations, which simply shifts the financial pressure and hardship from renters to landlords. The Brookings Institute warns that “smaller landlords of low-to moderate-incomes may not be able to maintain their supply of rental housing and will experience a significant income shock due to the loss of rental payments under the moratorium.” 

The good news is that the eviction crisis has not fully materialized. Many landlords have been willing to work with tenants to reduce or restructure their rent payments. Some income is better than no income. And a better policy would encourage voluntary forbearance and reductions rather than impose them by government fiat. Federal, state, and local governments should lift the eviction moratoriums and give emergency federal assistance a chance to help. If smaller landlords lose their rental properties, the long-term side-effects of well-intended fiat policies may prove worse than the disease. 

Rea S. Hederman Jr. is executive director of the Economic Research Center and vice president of policy at The Buckeye Institute.