The Council of State voted along party lines Tuesday to reject a one-month extension of the governor’s residential eviction moratorium, leaving tenants in limbo as a federal ban continues through July 31.
Gov. Roy Cooper’s Executive Order 171, enacted in October, clarified and strengthened a federal eviction moratorium issued by the national Centers for Disease Control and Prevention after studies showed eviction cases caused a further spread of COVID-19 from evictees moving into other people’s residences or into homeless shelters.
“It’s disappointing to see Council of State members revoke eviction protections for people still struggling to stay in their homes,” Cooper said after the vote.
Six Republicans on the nine-member Council of State voted to let the moratorium expire, removing one of the state’s key tools in preventing evictions since September: making landlords provide tenants a copy of a declaration form to receive protections under the CDC order.
Now, many residents may be “unaware of the protections available to them under the federal evictions moratorium and evicted unnecessarily,” Cooper said.
Who the ban helped
Although the share of North Carolina renters in debt is decreasing as the economy recovers from the pandemic, more than 180,000 North Carolina households are still behind on rent, according to a Census Household Pulse Survey conducted May 12-24.
The survey estimated almost $500 million total rent debt across the state, and the issue disproportionally affects marginalized communities. Tenants behind on rent are 91% low-income and 57% people of color, according to the survey.
The study said those behind on rent are “overwhelmingly” poor households whose members lost jobs and income during the pandemic.
Cooper promised to work toward ensuring that landlords abide by the national moratorium, which the Biden administration extended last week. The U.S. Department of Justice urged state courts to adopt strategies to help prevent evictions due to the pandemic.
Following the federal extension on June 24, Treasurer Dale Folwell called for the governor to allow the state’s moratorium to expire on June 30 instead of aligning with the CDC’s July 31 date.
Folwell, who supported the original order but opposed the three extensions enacted since September, said it reduces “opportunities for citizens to rent because landlords don’t want to take the risk that they won’t get paid.”
“What was originally an act of COVID now exists solely as an act of the state and no longer advances any public purpose,” Folwell said last week. “It is potentially lowering rental housing inventory.”
Folwell, a member of the council, voted against the extension. He later said the order’s expiration “pushes the power back to the people” to find solutions to late rent payments without government intervention.
Lt. Gov. Mark Robinson said he voted against the extension because landlords have been forced to shoulder the burden from loss of rental income, and property owners are now hesitant to rent out their properties to tenants who might not pay.
“While this policy made sense during the intense parts of the pandemic, it is no longer necessary, and the state needs to remove itself from making one-size-fits-all mandates,” Robinson said.
The immediate effect
“The governor doesn’t have to do anything for the CDC order to continue applying to North Carolina,” and no mass evictions will take place until August because the CDC order will still be in place, said Sean Driscoll, a spokesperson for Legal Aid of North Carolina, a nonprofit law firm that represents tenants in eviction cases.
However, Duke University professor and civil rights attorney Jesse McCoy, a former Legal Aid attorney, argued that the governor’s executive order was essential to streamlining and clarifying the CDC’s moratorium.
The federal government plays a limited role in landlord-tenant law unless it involves public housing or federally backed mortgages, he said. As such, it is up to states to ensure the CDC’s order is being carried out effectively and accurately.
Although the CDC moratorium still applies to North Carolina tenants and landlords, he said, “it’s likely that less people will, de facto, be protected by it.”
Driscoll also identified the need for tenants to know their rights. “If they don’t know about the moratorium, if they don’t know that they have to provide a declaration to their landlords, then they can still be evicted, or they can’t fight an eviction effectively,” Driscoll said.
Although mass evictions will be prevented until the CDC order’s July 31 expiration, according to Driscoll, state courts will still likely see an increase in eviction hearings because “we’ve lost those additional protections of the governor’s order.”
Under the CDC order, landlords cannot legally move forward with any attempt to evict once a tenant asserts the protections. However, Legal Aid NC’s Isaac Sturgill said in November that many landlords were “moving forward with the eviction process anyway and (were) disregarding it.”
When Cooper announced the executive order last fall, he pointed to reports showing enforcement of the CDC moratorium was inaccurate and inconsistent in some parts of the state. Citing mounting confusion among landlords, tenants and the courts, the governor required landlords to notify tenants of their rights.
An inevitable wave?
Evictions in North Carolina last summer resulted in 15,690 coronavirus cases and 304 deaths, according to a study conducted by researchers at four U.S. universities, including Wake Forest and Johns Hopkins, and a published preprint in the Social Science Research Network.
The increased cases and deaths were caused by the expiration of North Carolina’s previous evictions ban on June 20, 2020, the researchers argued.
When the CDC responded to various studies that found high eviction numbers causing increased COVID cases, McCoy said the ensuing moratorium was interpreted inconsistently by the states and by different localities within the states.
“If the major metropolitan areas say, ‘We’re following the CDC order,’ but the rural areas say, ‘Well, have fun with that, we’re gonna do what we want to do,’ then you don’t have uniformity in the process,” McCoy said.
“And so, what happened was, every state has these localities — some that follow the order and others that don’t — and it wasn’t the universal effect that the CDC intended.”
Gov. Cooper’s decision helped standardize how different counties and cities carried out the moratorium, according to McCoy. Violation of an executive order may result in criminal charges.
Although a nationwide eviction crisis existed long before the pandemic, massive unemployment numbers in 2020 “thrust more people into the crisis, particularly those who are more middle class,” McCoy said.
Unemployment numbers in the state are steadily decreasing — from 6.1% in December to 4.8% in May — but renters are still faced with arrears.
“The moratorium did nothing to offset late fees or rent,” said McCoy, who also serves as a supervising attorney for the Duke Law Civil Justice Clinic.
“A lot of my clients are working now, and they’re able to take care of rent moving forward. But these deficits that have accumulated are just unbearable, and there’s no way they’re going to be able to cover them.”
Housing advocates are working to secure additional federal and local funding to cover all or a portion of tenants’ deficits. Cooper established the HOPE program last fall to provide rent and utility assistance to landlords on behalf of 37,000 applicants who applied, but only half of the appropriated $132 million had been awarded by June 28, according to Cooper’s office.
North Carolina renters who can’t cover their entire deficit will likely lose their cases in court, McCoy said.
Evictions not only create housing instability, but they significantly disrupt the way of life for low-income evictees: Their records will show an eviction, making it hard to find a new residence or obtain a mortgage; kids may be forced to leave desired school districts; and those who use public transportation may have to relocate farther from bus and rail lines.
“We don’t want the eviction in and of itself to create an enormity of additional problems that just putting in some money and covering the deficit would solve,” McCoy said.
Liz Carbone, community coordinator at the Good Shepherd Center in Wilmington, which administers the city’s eviction prevention program, predicted a sharp rise in the eviction rate in the coastal city.
The center received $920,000 in CARES Act Community Development Block Grant-Covid funds. Among the 1,250 applicants who applied for the program, 60% were African American, and 70% were women, according to Carbone.
“Whether there is a pandemic in our community or not, those are people who will constantly teeter on the edge of being one financial emergency, one medical emergency, one sick-child-taking-you-away-from-work from not being able to pay their rent,” Carbone said.
“So, the pandemic just exacerbated the issue.”
The landlords’ burdens
Critics of the moratorium point to a rental industry held back by federal overreach and the shrinking of an already undersupplied market of affordable rental options.
Kathy Robertson chairs the N.C. Realtors Association’s property management division and is vice president of T.E. Jonson and Sons, a Winston-Salem firm that manages 850 condominiums, single-family homes and multifamily units throughout the Triad region. Many of the managed properties provide affordable monthly rates between $700 and $900, Robertson said, but those numbers may soon rise.
The company initially supported an eviction ban during the beginning of the pandemic. But as it dragged on, causing many of the firm’s landlord clients to sell their properties due to a lack of rental income — with a few facing possible foreclosures — the company began to oppose the CDC moratorium, according to Robertson.
“We have contracts with our property owners and with our tenants, and the government basically threw those out and said we can’t force our tenants to pay,” Robertson said.
“If they don’t pay, there’s nothing we can do about it, which is contrary to what our contract says.”
Many of the homes the firm manages are now being purchased by out-of-state investors, according to Robertson. She thinks they will return to the market as owner-occupied homes or as less affordable rental options.
“We haven’t seen a greater number of tenants not pay rent. What we have seen is the tenants who have not paid owing a higher amount of rent,” she said. “They’ve gone longer without us being able to do anything about it.”
“It is not what it is portrayed to be, that hundreds of thousands of people are going to be on the streets,” Robertson said. “I just don’t see that, at least not for our portfolio.”
Commissioner of Labor Josh Dobson, who voted against Cooper’s proposed extension, said landlords have been responsible for paying all costs related to residential units, including mortgage payments, throughout the pandemic.
“During the height of the pandemic, it made sense to ease the burden on residential tenants in an effort to slow the spread,” Dobson said.
“However, with the complete availability of vaccines, the significant decrease in positive COVID cases and the easing of nearly all restrictions at the federal and state level, now is the time to reduce the burden on landlords.”