In 2012, then President Barack Obama infuriated many Americans when he told business owners “you didn’t build that” and suggested that the government has a claim on their stuff. Yet this comment looks like only a mild affront to property rights next to what the Centers for Disease Control and Prevention (CDC) just did.
Under the direction of the Trump administration, the CDC instituted a unilateral order halting many evictions. It essentially nationalizes millions of private rental properties and strips landowners of their basic rights.
Here’s how Reason’s Christian Britschgi summed up the details:
Tenants earning up to $99,000 ($198,000 for joint filers) cannot be evicted for not paying their rent provided they tell their landlord in writing that they've made all efforts to obtain government assistance, have lost income or received extraordinary out-of-pocket medical bills, and that their eviction would force them into homelessness or into a crowded living situation. Landlords could still be able to evict tenants who engage in criminal activity on the property, or who pose a risk to public health or safety.
Landlords who violate the order face penalties up to $100,000 and up to a year in jail.
For legal justification, the Trump administration cites one vague law that says during a pandemic the CDC director “may take such measures to prevent such spread of the diseases as he/she deems reasonably necessary, including inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of animals or articles believed to be sources of infection.”
Lawyers immediately blasted using this statute as justification for halting evictions nationwide as a massive stretch.
“All of these measures are localized, and limited to prevent the spread of an infection in a single building or location,” wrote constitutional law professor and Cato Institute scholar Josh Blackman. “None of these examples are even remotely close to a nationwide moratorium on evictions. This action is far beyond the scope of delegated authority.”
Other critics have also made their feelings well known.
In typical #SassyWithMassie fashion, Rep. Thomas Massie, a libertarian-leaning Kentucky Republican, unloaded on the CDC’s power grab in a series of tweets:
CDC inserting itself into private rental contracts, effectively transferring control of private property from the lawful owner to the renter, is possibly the most socialist action our government has taken in decades... and without an act of Congress!https://t.co/phLwFIYWlO— Thomas Massie (@RepThomasMassie) September 2, 2020
If society concedes that the CDC can unilaterally seize property (with their ridiculous rent moratorium) our devolution into a “bureautocracy” is complete, and private property no longer exists.— Thomas Massie (@RepThomasMassie) September 2, 2020
Rental contracts are governed by state law. There is no federal authority to overturn them.— Thomas Massie (@RepThomasMassie) September 3, 2020
The CDC order is an affront to the rule of law, and an emasculation of every legislator in this country - state and federal.
Barely a whimper from most of them, Democrat or Republican.
Other prominent Republican legislators who remain committed to limited government principles panned the move as well.
"I think the legal authority is a real stretch,” Sen. Pat Toomey said. “If the CDC has the authority to force landlords to effectively give away their product for free, I don't know where that ends. Can General Motors be forced to give people cars unless they otherwise crowd into subways?”
“CDC does not have the authority to do this,” Sen. Rand Paul wrote. “It's dangerous precedent and bad policy.”
It’s worth considering the reality of what this policy will entail.
Across the country, millions of landlords will have tenants occupying their property and have no way to force them to pay rent or remove them if they won’t. Pretty much anyone can write a letter making the necessary claims in order to fall under this eviction moratorium. Moreover, the parameters for qualification are rather high income brackets—even a family earning $197,000 annually would fall under this rule. So, it’s clear this moratorium can and will be abused by just about anyone who doesn’t feel like paying their rent.
Technically, back payments for missed months will be due whenever the moratorium is eventually lifted. But it’s almost certain that Congress and the president will pass some measure making taxpayers pick up the tab; nobody in Washington is going to want to face the political fallout from handing people a bill for months of back-owed rent.
More importantly, the federal government is trampling over private contracts and essentially seizing all affected rental properties as the domain of the state. It’s a gross overreach, and it’s not even justified by the underlying crisis.
That’s right: Evictions are not actually out of control.
“According to data from Princeton University's Eviction Lab—which tracks eviction filings in select cities—evictions are currently below historic averages in almost every city, including in places where local and state eviction moratoriums have expired,” Reason reports. “Thus far, rent payment rates have remained pretty steady during the coronavirus pandemic and are only slightly below where they were last year.”
Yet the CDC’s overreach will undoubtedly have severe economic consequences.
This move will worsen the housing crisis in the long-run and make housing more expensive for everyone by decreasing supply. Many landlords will be unable to make their mortgage and property tax payments without rental income or any remedy for nonpayment. This will result in them losing their property and its eventual removal from the market.
So, too, this unprecedented invasion of contract rights and private property is sure to discourage future would-be landlords from renting out their property or entering the market. The long-term impact will be less housing overall, which means higher prices.
Thankfully, the COVID-19 pandemic will eventually recede and social life will eventually return to normal. But the CDC’s eviction overreach is just another example of how economically disastrous infringements on our freedom may be here to stay.
Yes, when the crisis ends, the CDC may scale back some of its emergency measures. But they likely won’t completely retreat from their newly expanded power over American housing. And even more crucially, as Sen. Paul noted, now a dangerous precedent has been set that federal agencies can unilaterally seize entire sectors of the economy in the name of crisis response. Who’s to say that a future President Kamala Harris won’t have the CDC declare climate change or student loan debt a “public health crisis” and order via fiat a ban on fossil fuels or cancellation of students loans?
CDC does not have the authority to do this. It’s dangerous precedent and bad policy. https://t.co/Gcz0ZmUtZh— Senator Rand Paul (@RandPaul) September 3, 2020
This is what economist Robert Higgs called “the Ratchet Effect” in his classic book Crisis and Leviathan. Higgs showed how throughout history, crises have been used to excuse government power grabs. After each crisis, the government lets go of some of the power, but never all of it. As a result, the federal government’s power (the Leviathan) has “ratcheted up,” crisis after crisis, throughout the last hundred years.
For instance, the New Deal was forced through in response to the unique crisis of the Great Depression. But many of its core elements became permanent encroachments on our freedom and permanent burdens on the taxpayer. Similarly, after the 9/11 terrorist attacks, the federal government vastly expanded its surveillance powers and its ability to circumvent the civil liberties of everyday Americans. There hasn’t been anything close to another 9/11 terrorist attack on the U.S. in 20 years, but the government still retains much of this power it seized amid the crisis.
Now, we are witnessing in real-time this phenomenon play out in our government’s handling of the COVID-19 crisis. From draconian lockdown powers to taking over the rental housing market, it’s extremely unlikely our elected officials will cede all the authority they’ve seized during the pandemic.
If Americans keep letting this happen every time we face a crisis, we will eventually ratchet up an omnipotent government—and surrender all our freedoms in the name of health and safety.