Goldman Sachs predicts that, given the sudden end to the moratorium on evictions, landlords in the United States will evict 750,000 households before the end of the year. 

That startling number comes after the U.S. Supreme Court has decided that the Centers for Disease Control does not have the authority to prohibit private parties from evicting tenants on public health grounds. 

The Biden administration had argued that the CDC, a component of the Department of Health and Human Services, has that authority under Public Health Service Act of 1944, which in general terms authorizes regulations to “prevent the introduction, transmission, or spread of communicable diseases … from one State or possession into any other State or possession.”

But the Supreme Court, in an unsigned opinion said that if Congress means to authorize an infringement upon the property owners rights, such as an eviction moratorium, then Congress must say so itself. It “strains credulity” to suppose that the general language of the statute that the administration cited can support such an executive act.

The Court split on party lines. The three appointees of President Trump and the three appointed by one or another President Bush all voted to strike any extension of the moratorium. 

The two Justices appointed by President Obama (Sonia Sotomayor and Elena Kagan) and the one dating to President Clinton (Stephen Breyer) dissented. 

Breyer wrote the dissent. He stressed that the court was acting hastily, during its recess, through an emergency appeals process (also known as the “shadow docket.”) He believes that the case should have awaited full briefing and argument, out of the shadows.

Given that the “answers impact the health of millions” the court should not “set aside the CDC’s eviction moratorium in this summary proceeding.”

What The Future Could Hold

When people are evicted they can end up in shelters, or they often move in with friends or relatives. In either case, one consequence is that they are living in closer quarters to other people than they had been, and other people with them. This is conducive to the easier spread of a germ or virus. 

The Goldman Sachs paper attaches specific numbers to that prospect. There are 3.5 million households now struggling to catch up with rent, largely due to the economic dislocations created by the Covid-19 epidemic itself and rules — a patchwork of local and state rules — that disrupted “non-essential” businesses and the lives of their workers.

Goldman Sachs’ estimates include: households owe landlords an aggregate of $17 billion in unpaid rent. A sudden rush to recover that unpaid rent “or else” could result in that 750,000 evictions over the next four months. 

Long-Term Impact of Evictions

A wave of evictions can have a lot of negative impacts for the economy, Goldman said. It will hit household consumption, and it will limit job growth. But the public health threat is likely the greatest of its threats. 

Efforts in Congress to produce legislation specifically authorizing a moratorium have stalled. 

Goldman Sachs is a major Wall Street investment bank. It has been a fixture in the financial world in the United States (and increasingly, in the world) for about a century and a half. But it is not the only financial authority worried about the sudden cliff that so many tenants face.

Months ago Congress set aside money for emergency rental assistance. That money should have been available to help create a ramp rather than a cliff here, for the benefit of both renters and their landlords. But, as the Goldman report observes, that money has been held up in administrative red tape. In order to avoid calamitous consequences, economic and epidemiological it will have to be “distributed as a much faster pace” or Congress will have to address the issue, Goldman said.