Federal Judge Overturns National Eviction Ban, but Decision Might Not Stick

Gary Denham / Flickr.com

Americans who are still struggling to pay their rent might have lost a key financial lifeline on Wednesday after a federal judge threw out a national moratorium on evictions, though the Justice Department said it will appeal the decision.

See: 10 Reasons to Think Twice Before Investing In Real Estate
Find: 40 Cities That Could Be Poised for a Housing Crisis

The moratorium began last year under former President Donald Trump, when Congress empowered the Centers for Disease Control and Prevention to ban evictions so Americans who were behind on their rent during the COVID-19 pandemic wouldn’t end up homeless. It has since been extended three times, most recently in March under President Joe Biden, Reuters reported.

U.S. District Judge Dabney Friedrich ruled that the CDC doesn’t have the power to impose a moratorium on residential evictions. Friedrich acknowledged that the COVID-19 pandemic is a serious public health issue but based her decision on the language in the Public Health Service Act, a law that governs federal responses to the spread of communicable diseases, Reuters reported. The ruling came in response to a suit filed by landlord groups arguing that the CDC had imposed the moratorium unlawfully, putting an unfair burden on mom-and-pop landlords.

Make Your Money Work for You

Friedrich serves in the U.S. District Court for the District of Columbia. She was appointed to the court four years ago by Trump. While her decision is considered a win for property owners who’ve challenged the moratorium, it might not take effect any time soon. The Justice Department said it is appealing the ruling, and Friedrich has agreed to put her ruling on hold until May 12.

See: How the Coronavirus Pandemic Is Affecting Renters vs. Homeowners
Find: Big Landlords Are Seeing Record Profits During the Pandemic

The eviction ban covered renters who expected to earn less than $99,000 a year (or $198,000 for joint filers), as well as those who reported no income or received stimulus checks, according to Reuters. Renters had to commit to doing their best to make partial rent payments. They also had to prove that evictions would likely either leave them homeless or force them into shared living quarters.

Around 20% of renters in the U.S. are struggling to keep up with their rent payments, CNBC reported. Meanwhile, states are working to disburse more than $45 billion in rental assistance allocated by Congress.

Moratorium advocates say the eviction ban is needed to prevent a large number of Americans from being displaced, which could worsen the pandemic during a period when vaccination rollouts are helping the country turn a corner.

More From GOBankingRates