The Biden administration’s new moratorium on evictions postpones yet again the crisis of debt that looms over millions of American households where the rent or mortgages are months overdue. But instead of solving the main problem of mounting indebtedness to landlords and banks, the new moratorium seems likely to make it worse. And the threat of a federal court order reversing President Joe Biden’s two-month moratorium could force the administration and Congress to fix the same basic problem they should have been working to fix all along.
Congress imposed the original moratorium in early 2020 as the coronavirus pandemic began spreading rapidly and much of the nation went into shutdown mode. Tens of millions of workers were displaced from their jobs, and even with two big federal stimulus payouts to individuals, many used all available cash to buy food and other essentials rather than pay rent. Landlords effectively got stuck with those bills — even though they remained on the hook for their own business loans and other operating expenses.
One estimate suggests the outstanding bills owed by more than 6 million renters could be around $27.5 billion. A federal aid package to landlords was supposed to disburse around $46 billion, but only a tiny fraction has reached them so far. Which means landlords are still absorbing the costs unfairly.
