CDC extends their eviction moratorium AGAIN through 31 July, claims this will be the last extension.

[army judge]

Jurisdiction

US Federal Law

One more time, once!

Will it be the last?

Are landlords feeling the pain?


https://www.kxxv.com/news/national-...ion-extends-eviction-moratorium-until-july-31

 

[PayrollHRGuy]

I have two words for that. Unlawful Taking.

 

[Tax Counsel]

I have two words for that. Unlawful Taking.

It's not an unlawful taking. The government is not taking the landlord's property for government use. However, I have always thought that the CDC's eviction moratorium exceeded the authority Congress granted it and in May a federal district court in DC held exactly that: the CDC lacks the authority to impose such a moratorium.

 

[PayrollHRGuy]

BS. If they can't use the THEIR property they are being taken from.

 

[Tax Counsel]

BS. If they can't use the THEIR property they are being taken from.

First, let's recall what the Constitution says about takings. It does not say that it is illegal for the government to take property for its use. It simply says that the government must compensate the property owner for the taking. There are two kinds of takings recognized in the case law. The first, and easiest to spot, is an actual taking of the property by the government, e.g. the government takes the land from the owner and the government takes title to it instead.

Clearly the CDC moratorium does not result in the physical taking of the property from the landlord. All it does is prevent the landlord from evicting a tenant for a temporary period of time. It does not relieve the tenant of any of his/her responsibilities under the lease, including the responsibility to pay rent. The government does not physically take the property for its use. The landlord is not losing the real estate with the government instead taking ownership of it. So there is no physical taking of property here.

There is another category of takings that are recognized in the case law, known as regulatory takings. Many regulations, including zoning regulations, land use regulations, building code requirements, etc., may adversely affect the value of property. But the mere fact that value is affected does not result in a taking that the government must compensate. The impact has to be pretty severe.

The rules the courts must follow are explained by the Supreme Court in a case from 2017:

The Court has, however, stated two guidelines relevant here for determining when government regulation is so onerous that it constitutes a taking. First, "with certain qualifications ... a regulation which 'denies all economically beneficial or productive use of land' will require compensation under the Takings Clause." Palazzolo v. *1943 Rhode Island, 533 U.S. 606, 617, 121 S.Ct. 2448, 150 L.Ed.2d 592 (2001) (quoting Lucas, supra, at 1015, 112 S.Ct. 2886). Second, when a regulation impedes the use of property without depriving the owner of all economically beneficial use, a taking still may be found based on "a complex of factors," including (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action. Palazzolo, supra, at 617, 121 S.Ct. 2448 (citing Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978)).​

Murr v. Wisconsin, 137 S. Ct. 1933, 1942–43, 198 L. Ed. 2d 497 (2017). As the Fourth Circuit noted in a 2018 case:

The Supreme Court has stated that "mere diminution in the value of property, however serious, is insufficient to demonstrate a taking." Concrete Pipe, 508 U.S. at 645, 113 S.Ct. 2264; see also MHC Fin. Ltd. P'ship v. City of San Rafael, 714 F.3d 1118, 1127 (9th Cir. 2013) (holding that an eighty-one percent diminution in value was not sufficient to constitute a regulatory taking). We have said that "[a] regulation is not a taking merely because it prohibits the most beneficial use of the property." Quinn, 862 F.3d at 442 (internal quotation marks and citation omitted). ​

Pulte Home Corp. v. Montgomery Cty., Maryland, 909 F.3d 685, 696 (4th Cir. 2018). You'll note that the Court references a case in which even an 81% decline in value was not enough to trigger the requirement to compensate the owner. In another case 81% might be good enough, as each set of facts is unique. But the point is, the impact has to be pretty significant.

Sure, in the CDC moratorium situation it may mean that as a practical matter the landlord is going to lose some rent because the tenant isn't going to ever pay the rent that is owed and won't have the assets for the landlord to collect it if the landlord gets a judgment against the tenant. But the temporary eviction moratorium is not hurting the actual value of the land at all and doesn't impose any permanent or long term deprivation of use of the land to the landlord either. The only loss suffered here is that of rent for perhaps a period of a few months. IMO after having read a lot of takings cases over the years that's simply going to fall far short of what is needed to trigger a requirement for compensation under the takings clause. And compensation is what the takings clause is all about. The takings clause does not make any regulation invalid.

It my not amount to compensable taking, but the order does appear to exceed the CDC's authority. While the decisions are mixed, the majority of district courts to review that issue have held that the CDC exceeded its authority. And now we have a federal appellate decision also holding the CDC exceeded its authority. The Seventh Circuit recently held:

Furthermore, even if we were inclined to construe the phrase "other measures" as expansively as the government suggests, we cannot read the Public Health Service Act to grant the CDC the power to insert itself into the landlord-tenant relationship without some clear, unequivocal textual evidence of Congress's intent to do so. Regulation of the landlord-tenant relationship is historically the province of the states. Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 440, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982) ("This Court has consistently affirmed that States have broad power to regulate housing conditions in general and the landlord-tenant relationship in particular."). It is an "ordinary rule of statutory construction that if Congress intends to alter the usual constitutional balance between the States and the Federal Government, it must make its intention to do so unmistakably clear in the language of the statute." Will v. Mich. Dep't of State Police, 491 U.S. 58, 65, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989) (quotation marks and citation omitted); Solid Waste Agency v. U.S. Army Corps of Eng'rs, 531 U.S. 159, 172–73, 121 S.Ct. 675, 148 L.Ed.2d 576 (2001) (declining to defer to agency interpretation of a statute where the interpretation pushed the limits of Congress's Commerce Clause authority "by permitting federal encroachment upon a traditional state power"). There is no "unmistakably clear" language in the Public Health Service Act indicating Congress's intent to invade the traditionally State-operated arena of landlord-tenant relations.

As the district court noted, the broad construction of § 264 the government proposes raises not only concerns about federalism, but also concerns about the delegation of legislative power to the executive branch. The government would have us construe the phrase "and other measures, as in his judgment may be necessary," 42 U.S.C. § 264, as a "broad grant of authority" to impose any number of regulatory actions, provided the Secretary believes those actions will help prevent the spread of disease, regardless of whether they are in any way tethered to the "specific intrusions on private property described in the second sentence" of § 264. "In the absence of a clear mandate in the Act, it is unreasonable to assume that Congress intended to give the Secretary the unprecedented power" of that kind. Indus. Union Dep't, AFL-CIO v. API, 448 U.S. 607, 645, 100 S.Ct. 2844, 65 L.Ed.2d 1010 (1980) (plurality opinion). We will not make such an unreasonable assumption.​

Tiger Lily, LLC v. United States Dep't of Hous. & Urb. Dev., 992 F.3d 518, 523 (6th Cir. 2021).

I had always thought the CDC lacked the authority based on my read of the statute and that any such moratorium either needed to be enacted expressly by Congress or left to the states. And the above opinion tracks that.

 

[Michael Wechsler]

@Tax Counsel - I agree with your legal argument that it is not a taking per se. But on some level I can appreciate the argument that the other side is trying to make in that some members of government may have sought to ostensibly redistribute wealth through some legalized vehicle. What percentage of tenants will have the lump sum of cash to pay on August 1?

The moratorium on evictions and foreclosures in New York granted by the governor was extended to August 31, and may very well lead to troubling consequences. Small landlords here are furious, especially about landlord relief bill that contained conditions they believe are onerous while tenants were granted a rent free existence without essentially having to prove need. September is going to a be a busy, interesting time in the court system.