On Saturday, the federal government’s Center for Disease Control will issue a new regulation barring eviction of millions of residential tenants around the country. If it survives likely legal challenges, the new policy would set a dangerous precedent undermining federalism, the separation of powers, and property rights. Conservatives, in particular, will have reason to regret it when a Democratic president inherits the same sweeping powers.
The CDC policy bars eviction, until the end of the year, of any residential tenant who makes a sworn declaration to the effect that they 1) have “used best efforts to obtain all available government assistance for rent or housing,” 2) they expect to earn less than $99,000 ($198,000 for joint tax filers) in 2020 or did not have to report any income to the IRS in 2019, or received a stimulus check under CARES Act, 3) “the individual is unable to pay the full rent… due to substantial loss of household income… , a lay-off, or extraordinary out-of-pocket medical expenses” 4) “the individual is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit” and 5) “eviction would likely render the individual homeless—or force the individual to move into and live in close quarters in a new congregate or shared living setting.”
So writes Ilya Somin at The Volokh Conspiracy.
This is an amazing power grab by the Trump administration. It violates property rights and federalism. And its based on what looks like a narrow regulatory power that was not intended for its current use.
Somin goes on to point out the legal basis for the measure:
Such sweeping action by the executive normally at least requires authorization by Congress. As co-blogger Josh Blackman explains, the claimed authorization here is 42 CFR Section 70.2 a regulation that gives the Director of the CDC the power to “take such measures to prevent such spread of the [communicable] 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.” The CDC can take such measures anywhere it deems local and state regulations to be “insufficient” to limit the spread of disease across state borders.
The measure in itself is scary. The precedent is even scarier. Somin writes:
This broad interpretation of the regulation would give the executive the power to restrict almost any type of activity. Pretty much any economic transaction or movement of people and goods could potentially spread disease in some way. Nor is that authority limited to particularly deadly diseases such as Covid-19. It could just as readily apply to virtually any other communicable disease, such as the flu or even the common cold.
Moreover, governors in most states have taken a meat ax to property rights of business owners in the last few months. So the answer to my question “Will property rights be permanently diminished?” is, I think, yes.
READER COMMENTS
Jon Murphy
Sep 2 2020 at 5:50pm
This will surely have the negative effect of reducing the supply of rental units available, especially to marginally risky renters. In turn, higher rents will become the norm.
Poor and marginal people are going to get royally screwed by this, not to mention landlords who still have mortgages to pay.
We could have another financial crisis and it will be entirely man-made.
David Seltzer
Sep 4 2020 at 5:11pm
Jon, The model for this property grab is rental control and vigorous anti-eviction decisions from activist tenancy courts. Evictions in NYC can take as long as 6 months. Loss of revenue to the property owner can result in not paying utility bills and deferring maintenance. Not only is the landlord harmed but the rent paying tenant as well. In the end, who is willing to risk building new rental units in that milieu?
Thomas Hutcheson
Sep 3 2020 at 10:06am
A totally misguided policy, but what else can we expect from a wall-building, DACA-depeoriting, asylum-denying, full employment deficit-increasing, H1b visa rejecting, trade-warring administration? Of course low income people will be those most harmed. Who else? Elections have consequences
But it is also another perfect example of how the lack of a good policy leads to bad policy. Since at least 2009 we have seen that recessions mean that people lose jobs and incomes, leading to evictions and foreclosures. Unemployment insurance (that would apply to self employment, too) that replaces a hefty portion of lost income plus the cost of health insurance/automatic enrollment in ACA would have avoided this problem.
[And I suspect that if the Fed were maintaining NGDP growth of 4-5%, banks would be pushing bridge loans to mortgage holders so they would be much more reluctant to undertake costly evictions and foreclosures.]
I can already hear the anguished and totally correct analyses of all inefficient and even counterproductive “Green New Deal” responses to a future climate crisis from people who never moved an electron to support a tax on net CO2/methane emissions.
robc
Sep 4 2020 at 11:03am
Why support a 3rd best solution instead of a 9th* best solution.
* i am probably overstating the rank of the green new deal. It might not be in the top 1000. Then again, carbon tax probably isnt 3rd best either, but I am trying not to be too harsh.
Thomas Hutcheson
Sep 5 2020 at 7:45am
No sarcasm, promise. What IS your first best policy wrt CO2/methane emissions?
robc
Sep 6 2020 at 2:05am
My first best policy for every externality is Coasean Bargaining.
My second best, for those rare cases that #1 doesnt work ( of which, this is one) is to do nothing. In this case, I dont think we need to move onto 3.
Jon Murphy
Sep 6 2020 at 8:25am
May I ask you to expand on this? Who does nothing? The government or the people involved in the externality?
robc
Sep 6 2020 at 4:05pm
Government. People could do whatever they want, within reason. Which is part of why the do nothing policy works.
Jon Murphy
Sep 7 2020 at 8:56am
I understand. That’s what I thought you meant, but wanted to be sure
Nick
Sep 3 2020 at 10:30am
The CDC can set a moratorium on evictions???? I find so many headlines shocking that others take in stride, but this one has to be prima facie the most bizarre thing I have ever read. Sadly, I don’t think the abdication of legislative power to the administrative state, chevron deference, etc. are on any politician’s or many American’s fix it list.
robc
Sep 4 2020 at 11:04am
Overturning Chevron might get 2 votes from the Supremes.
Phil H
Sep 4 2020 at 12:34pm
This is a really interesting point. Because of course, there is a surface absurdity to the CDC making rules about evictions. But the point is that when you start digging into the causes of disease, or the causes of crime, you very quickly do run into apparently unconnected policy issues.
When libertarians complain about why the government has become so complex, this is the answer. Because the world is complex, and if you want to do public health *right*, you end up doing things with public housing. Why do police departments start hiring social workers? Because if you want to really cut crime, you need to cut the causes of crime, including social dysfunction.
I don’t want to defend this particular rule. But it is easy to see how it grows out of the mandate the CDC’s been given. And that’s not because the mandate’s wrong. It’s just that the world is that messy, and different policy areas will collide.
Gene
Sep 4 2020 at 1:53pm
Let’s not conflate a need for “society” to solve big problems with the duties that particular agencies are tasked with. The point is well made in this recent article about Public Health England, and its mission creep, whereby it tried to get its fingers into a lot of areas beyond its scope or ability.
Mark Z
Sep 4 2020 at 7:31pm
I think we’ve generally been aware for awhile (even when society and government were ostensibly much simpler; the Wickard v Filburn decision during the New Deal comes to mind) that if you try hard enough you can come up with a rationale for why pretty much any measure is within the scope of any agency. That’s precisely why clear limitations on what they can do are so important. Every department or agency has a sufficiently vaguely defined goal that could be used to justify its totalitarian rule over society. I think that’s more something to be guarded against, because I think freedom actually matters, than the logical conclusion of society’s complexity.
And of course each agency has no reason consider the costs of its overreach outside of its domain. As we’ve seen, public health agencies don’t much consider the economic costs of their decisions, agricultural agencies don’t much care about the environmental costs, etc. Another reason to keep them on clearly defined lanes.
Thomas Hutcheson
Sep 5 2020 at 8:10am
Isn’t the problem that agencies have insufficient reason to consider all costs and benefits of proposed rules? The domain is relevant because of their supposed greater expertise in estimating costs and benefits within their domain.
Of course in the case at hand the issue is having included political benefits to the President being seen as “doing something,” which is even farther from their “domain.”
Jon Murphy
Sep 5 2020 at 10:52am
Libertarians and classical liberals are very aware of the complexity of the world. This sort of mission creep is precisely why we oppose government intervention: the government agencies eventually stop being “efficient,” even if they initially were (and that’s a big “if”). Bureaucracies expend far outside their realm of competency, get overwhelmed, and political expediency replaces common sense and knowledge.
Schemes like “public health,” “carbon taxes,” “optimal tariffs,” “competitive market regulations” etc are all built on a simplistic view of the world.
Phil H
Sep 6 2020 at 9:34am
Thanks, all. I… agree with everything you all said.
Mark Z: “That’s precisely why clear limitations on what they can do are so important.”
Yep. And those limitations have to be put in place through the law. They are also renegotiated on an ongoing basis. I’m afraid the libertarian vision doesn’t offer any solutions to this problem, except insofar as it eliminates government functions. These are problems of law (and the incompetent wielding of law, in the case of the current administration), and they will always arise.
Jon M: “Schemes like “public health,” “carbon taxes,” “optimal tariffs,” “competitive market regulations” etc are all built on a simplistic view of the world.”
They are, and thank heaven for simplistic views of the world. You should see the view that the main engine of the economy is built on – it reduces citizens to consumers!!! These simplistic models are the way people make stuff work, but simplistic models will and do rub up against each other.
Jon Murphy
Sep 6 2020 at 10:06am
Interesting. In the 13 years I have been in economics, first as a student, then as a grad student, now as a professor and researcher, I have never came across that view. I’ve seen many non-economists try to characterize economics like that (especially free market economics), but I have never seen that view seriously espoused by any model, theory, or economist.
Beware of the distinction between simplistic and simplified. Many models are simplified, but they are hardly simplistic.
Rob Weir
Sep 3 2020 at 11:19am
There were alternatives. The government could reimburse landlords. The government could give housing subsidy checks to qualifying individuals. The government could have housed those unable to afford their rent in vacant hotel rooms paid for by the government. These all have the quality of sharing the burden broadly across the tax base, rather than forcing just one segment of the population (landlords) to bear the cost.
However, these remedies above all require the appropriation of federal funds, and that requires Congress to act. But with election year gridlock in Washington, that will never happen.
When the Executive needs to act alone, he’ll find two loaded guns already on the table, ready to use in situations like this: National Security and Public Health. The dangers of the first were trimmed somewhat by the War Powers Act. I wonder whether we now need a Public Health Powers Act?
Henry T Hill
Sep 4 2020 at 3:09pm
https://legal-planet.org/2017/10/23/everything-you-always-wanted-to-know-about-the-chevron-doctrine/
After Mead, the Chevron test had three steps:
Step Zero. Does the agency have authority to issue binding legal rules? If the answer is “no,” Chevron does not apply, but the agency may still receive some lesser degree of deference because of its expertise. If the answer is “yes,” the analysis moves to Step One.
Step One. Is the statute ambiguous? If not, the Court simply decides the interpretation of the statute by itself. Otherwise, the analysis moves to Step Two.
Step Two. Is the agency’s interpretation reasonable (even if the court itself would have chosen a different interpretation)?
Farber, Dan. “Everything You Always Wanted to Know About the Chevron Doctrine.” Legal Planet, 23 Oct. 2017, legal-planet.org/2017/10/23/everything-you-always-wanted-to-know-about-the-chevron-doctrine/.
Step Two: Does preventing evictions prevent the spread of COVID-19? The argument (interpretation) that this action will in any measurable way prevent the spread has not been proven. Many tenants have families and other alternatives if they were evicted. During the 1970’s my wife and I accumulated 17 properties with over 50 total tenants. We inherited two houses in New York State and found out how difficult it was to evict a non paying tenant. We sold both properties. Most of our properties were in Ohio where we could handle evictions, all were for non payment, ourselves without a lawyer. We have sold all our rentals and in this environment would not invest in rental property.
Property rights just stripped away. Where does it end?
How about cancelling all credit card payments with no interest penalties until the end of the year?
How about cancelling all commercial rent payments with no interest penalties until the end of the year?
How about cancelling all mortgage payments residential and commercial with no interest penalties until the end of the year?
How about cancelling all estimated income tax payments with no interest penalties until the end of the year?
How about cancelling all car payments with no interest penalties until the end of the year?
How about cancelling all bank loan payments both individual and corporate with no interest penalties until the end of the year?
Where are we headed?
robc
Sep 6 2020 at 8:03am
The income tax one is a good idea.
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