Now the Supreme court just ruled indicated this spring that the CDC does not have the constitutional authority to put a moratorium on evictions. And both President Biden and his spokesperson ("we are all aware of the Supreme Court decision at the end of June."—Jen Psaki) acknowledged as much yesterday.
So where is this going? The President said he hoped he could keep the moratorium going for at least a month via lawfare and appeals before ending up at the Supreme Court once again.
This time around the landlords are arguing this is an unconstitutional taking for which they deserve compensation but that runs into the political reality of the rage that would be ignited if the 5 -10% of renters who aren't paying get bailed out by having Uncle Sam settle their accounts. The furor from the 90 -95% who have been paying their rent would be political disaster. Which is why Speaker Pelosi skipped town without doing anything saying something to the effect: "Joe, we'll be back in five weeks, do something about this."
And as that is going on the landlords are raising rents on those who are paying, to compensate for the revenue loss from the non-payers:
....According to the July Apartment List National Rent Report, the national rent index increased by 2.3% from May to June, matching the largest single month increase ever recorded in AL estimates, which begin in January 2017. It was also the fourth straight month in which that record has been broken, following a 2.3% increase in May, a 2.0% increase in April and a 1.4% increase in March. These are all sequential - not annual - increases!
According to the report, so far in 2021, rental prices have grown a staggering 9.2%. To put that in context, in previous years growth from January to June is usually just 2 to 3 percent. After this month’s spike, rents have been pushed well above the report authors' expectations of where they would have been had the pandemic not disrupted the market.....
If the landlords can both raise rents and get recompensed by the government it will be equivalent to the coup pulled off by Goldman Sachs when it collected both from the U.S. Government on AIG's bad debt and collected on the credit default swaps they had prudently purchased.
And if the landlords don't collect their money from Uncle Sugar? Will we see money going to back rent in an attempt to stave off eviction or will we see millions of people have any last vestiges of a credit rating destroyed?
The former creates a creates a demand shock just before the holidays while the latter permanently constricts buying power.
May you live in interesting times.
