Unintended consequences: Eviction moratorium problematic

Angel Albring | BIZ. Magazine

Editor’s Note: The following is an updated version of a previously published story.

In September, a nationwide moratorium on residential evictions issued by the U.S. Centers for Disease Control and Prevention (CDC) took effect, pausing most evictions related to nonpayment or underpayment of rent. That moratorium will last until December 31, 2020, and it replaces a federal eviction freeze that was issued under the CARES Act.

While the new moratorium was expected to head off a wave of evictions, it may be causing more issues, elsewhere.

“It’s problematic, all the way around,” said Meg Goorley of Catholic Charities of North Louisiana (CCNLA). “It’s crucial, because it keeps people from being evicted, but it also stops many people from getting the help they need.”

CCNLA is one of a few local organizations that offer rent and utility assistance for people who are behind on payments.    

Currently, most utility companies have stopped disconnections due to non-payment.

According to Goorley, the federal funds that CCNLA received this year to help with rental assistance can only go to a “very narrow group of people.”

“They must have an eviction notice and be within 21 days of eviction for us to offer them some help,” she said.

The order issued by the CDC states that landlords “shall not evict any covered person from any residential property … during the effective period of the Order.” But renters have to take a proactive step to be protected- each individual on a lease must separately submit a sworn declaration directly to their landlord.

That declaration can be found on the CDC website at https://www.cdc.gov/coronavirus/2019-ncov/downloads/declaration-form.pdf

The declaration says that lying, or leaving out information can be punished as perjury. Joe Bulger, Operations Director of CCNLA, said that Shreveport judges are closely and deeply cross examining all claims in evictions court, including these declarations.

This form also does not protect people who are being evicted for lease violation. It only applies to those who may be evicted due to lack of payment.

The form outlines the steps a renter must take and guidelines they must meet in order to not be evicted for nonpayment.

Those steps include:

1.) attempting to obtain government assistance for rent or housing
2.) earn less than $99,000 in annual income
3.) be unable to pay rent due to a reduction in hours, or loss of a job, because of COVID-19
4.) make partial payments toward rent as they can

While these steps may seem reasonable, Goorley and Bulger both said that step one has become a problem.

“If we don’t have an eviction notice, we can’t offer assistance,” Goorley said. “We have to have that before we can start the process to help.”

Additionally, Bulger said CCNLA is no longer accepting applications for rental assistance because they don’t have any money left to give. Goorley said CCNLA’s fiscal year began July 1, 2020, and they ran out of rental assistance funds before their first quarter was up. 

“We’ve had to turn people away and send them elsewhere, but they’ve been sent back to us, because places that can normally help just don’t have it to give,” Bulger said.

He and Goorley said that other local agencies like, the United Way and Providence House, are also turning people away.

LaToria Thomas, Vice President of Community Investments and Operations of United Way of Northwest Louisiana, said that  over the summer, United Way raised $106,000 to provide COVID assistance relief. They have awarded $72,000 to date.

“Funds can be awarded up to $500 per person and can be used towards rent, utilities, food, medical costs, additional childcare and other unexpected costs due to COVID,” she said.

“It’s really not clear who, if anyone, has money for rental assistance,” Bulger said, adding that CCNLA has given more than $100,000 in its first quarter for rental help, which is five times more than the organization has given in previous years in the same time frame.

And with that money gone, Bulger said he doesn’t know when they will receive more to help with the avalanche of evictions that will be coming in January.

“The problem is that if people don’t have to pay their rent, they’re not going to,” Goorley said. “They’re going to fall deeper into a hole and it’s going to be very hard to get out of it.”

Bulger said that when people apply for rental assistance, CCNLA provides them with a letter stating that they attempted to get federal help for rent, but that they were unsuccessful. Whether or not that is enough to meet the requirement outlined in the declaration is unclear and could be up to interpretation from individual judges.

And Goorley worries that the declaration won’t be enough when people can still be evicted for lease violation.

“We are just telling people to keep their noses clean and follow their lease,” she said.

Leighton Allen, owner of property management company Port City Realty, said that his company manages around 800 properties, and that about 10 percent of those are unable to pay rent due to income loss from COVID-19.

“We have suspended their rent payments and are helping them get caught up,” he said. “We always work with our tenants if they show they have a loss of income. We created an application for (them) to fill out that has the proper documentation for them to submit.” 

And while a lot of focus has been placed on how renters will fare, there is concern for landlords, too.

“Landlords are businessmen, so they don’t have the same protections,” Goorley said. “The theory is that most mortgages have federal protections in place, and so the landlord, if they owe a mortgage, will get some relief through their mortgage company by having their mortgages placed in forbearance, and that money just gets tacked on to the end of their agreement. But, if the renter doesn’t pay, then the landlord just has to accept that loss.”

Allen said that most of Port City Realty’s property owners were able to get the banks to suspend their mortgage payments.

“I do not think the owners, nor the lenders, realized this would last so long,” he said.