Landlords should not have to work for free
Eviction bans have become one of the staple responses to the pandemic by governments across the country. Almost every state and many local governments have passed at least some sort of moratorium on evictions since the pandemic began. In early September, the Centers for Disease Control and Prevention (CDC) adopted a nationwide eviction ban for certain qualifying tenants, and Congress just extended that ban in its recently-passed stimulus bill.
One can see the superficial appeal of an eviction moratorium. It’s hard to socially distance when you have nowhere to live. And with so many workers unemployed because of the pandemic, it is becoming harder for many people to make their rent payments. Tenants without jobs always seem more sympathetic than their landlords.
But scratch below the surface and, like so many arguments for economic controls, the logic of eviction bans dissolves quickly.
For one thing, eviction bans threaten to harm the very people they are intended to help. Landlords have to recoup the costs of non-paying tenants somehow. Some will cut back on amenities or services such as cleaning or garbage collection, or will impose additional fees on existing renters. If the law permits them to raise rents, they will do that. Depending on how long moratoria last, some will take rental properties off the market or convert them to other uses, such as condos. And many will impose stricter credit or income requirements for prospective renters out of fear that they will be stuck with non-paying tenants they can’t evict. All of this harms current and future tenants who are paying or can pay their rent.
Another predictable consequence is that many landlords will have to lay off employees to cut costs. Those employees will then have difficulty paying their rent, which will increase the pressure on landlords to have to cut costs further.
And eviction bans can have a cascading effect on other industries, as landlords default on their mortgages, leading inevitably to calls to limit foreclosures, which then puts financial pressure on banks and can cause a host of other problems that reverberate through the economy.
Bottom line: the laws of economics cannot be swept away by the stroke of a pen. The government can only shift the burdens of the pandemic from one group to another, but it cannot make those burdens vanish.
But there’s another argument against eviction moratoria that is seldom acknowledged: Eviction moratoria are unjust.
Housing is not a limitless resource, like apples falling in the garden of Eden. Like any product or service we enjoy today, housing must be produced. Someone has to raise the capital to finance the construction of rental housing. Someone has to navigate the thicket of land-use regulations and build the property. Someone has to manage and maintain it. And someone has to take the often enormous risk that rental prices could fall and the property would not be able to turn a profit.
Landlords do all of that. And yet the prevailing view is that they are, at best, a necessary evil; at worst, parasites. In all events, they are viewed as a resource to be used as society sees fit.
Governments control the amount of rent landlords can charge and restrict their ability to evict tenants. In some cases, the restrictions are draconian. Seattle now not only prevents landlords from evicting tenants; it prevents them from collecting back rent for at least a year. How is this just?
Typically the response is that people need housing. This is true. People do need housing, especially during a pandemic. But how does that justify punishing those who provide it? If it’s foolish to kill the goose that lays the golden eggs, then it’s positively insane to kill him because he lays the golden eggs.
Being a successful landlord takes thrift, long-term planning, management acumen and organizational skill, like many other businesses. Unlike many other businesses, it often takes a Job-like level of patience. Most of us don’t want to deal with that leaking pipe, broken air conditioner, or clogged toilet in our own homes. Imagine what it would be like to have to deal with those things in other people’s homes.
Expecting landlords to work for free is not only economically ignorant, it is morally obtuse. If we truly believe a looming eviction crisis will make the pandemic unmanageable, the only just thing to do is to pay landlords to keep tenants housed. If it isn’t justified to force others to work for free, it can’t be justified to force landlords to work for free.
Eviction moratoria won’t make the consequences of the pandemic go away. But they may make landlords go away. If we care about keeping people housed during the pandemic, we need to stop thinking that beating up on landlords will help.
Steve Simpson is a senior attorney at Pacific Legal Foundation (PLF), which litigates nationwide to achieve court victories enforcing the Constitution’s guarantee of individual liberty. PLF has challenged eviction bans enacted by California, Washington State, and the CDC.
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