Eviction Moratorium Ends July 31, 2021: Could Millions Become Homeless?

Eviction Moratorium

by Gary D. Halbert, of the Forecasts & Trends E-Letter

In March of 2020, Congress passed the Coronavirus Aid, Relief and Economic Security Act (the so-called “CARES” Act) which included an eviction moratorium preventing landlords from evicting tenants who were delinquent in paying their rent. The moratorium was originally set to expire at the end of July 2020 but was extended four times to July 31, 2021. That’s this Saturday, and the Biden administration says it will not be extended further.

It remains to be seen how this all plays out. Some forecasters predict we’ll see millions of new homeless people wandering the streets over the next several months. Others think landlords will be reluctant to oust their tenants, especially if they believe those renters will soon get federal or state assistance with paying their unpaid rent. We’ll see.

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In March of 2020, Congress passed the Coronavirus Aid, Relief and Economic Security Act (the so-called “CARES” Act) which included an eviction moratorium preventing landlords from evicting tenants who were delinquent in paying their rent.

The national moratorium has been challenged in several courts and its expiration date has been extended four times. It is currently set to expire this Saturday, July 31, and federal officials (including President Biden) have indicated there are no plans to extend it again.

Throughout the moratorium, there has been confusion among renters and landlords regarding federal rent assistance. Landlords complain that some tenants have abused the moratorium by not paying rent, even if they have the money to do so. Tenants complain about the complicated paperwork and the long wait to receive rent assistance funds.

More than 11 million Americans -- 16% of renters -- are still behind on their rent payments, according to analysis by the Center on Budget Policy and Priorities. Some believe the numbers are far higher. And the moratorium ends this Saturday!

Congress approved more than $46 billion in rental assistance between last December and March for both tenants and landlords, but getting the money into their hands has proved hard for both the federal government and state and local agencies.

Exact amounts of assistance renters and landlords can receive depend on their income and where they live, but renters could get enough to cover rent from as far back as March 13, 2020, unpaid utilities and even, in some cases, future rent. The problem is, the assistance is just not getting to where it needs to go.

The Treasury Department claims that more than $1.5 billion in assistance was delivered to eligible households in the month of June alone — nearly triple the amount distributed since April. Administration officials point to this as a pivotal sign of progress in the program and an indication that once local communities establish a system for handling the money, they will be able to distribute it quickly. That’s good news but, again, the eviction moratorium ends in four days!

The White House announced last week it will convene a meeting of over 2,000 local officials, landlord and tenant advocates, legal experts and other participants from 46 cities to answer questions and raise awareness about emergency rental assistance and eviction prevention strategies tomorrow (Wednesday).

Yet how is that going to help with the deadline looming for landlords to commence eviction proceedings starting next week? I don’t know. With such a big pow-wow at the White House tomorrow, I would think there would be a lot of media coverage on this dire situation on the Wednesday evening news. But we’ll see.

Bottom line: There is a definite risk that millions of renters could be evicted and put on the street just ahead. Now I understand the eviction process is a complicated one, including in most cases going through courts. So, it’s not going to happen immediately after the deadline this Saturday. Yet this could be an economic nightmare over the next several months.

Finally, given the economic magnitude of the start of mass evictions for millions of delinquent renters, and the psychological impacts it would have on the country at large, I could see this throwing stocks into a major correction just ahead.

Hopefully, federal and state agencies can get up to speed muy pronto and assure landlords that the money is coming and convince most not to initiate the eviction process a few weeks longer.

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by Gary D. Halbert, of the Forecasts & Trends E-Letter

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Money In Motion

The other night, I was both bored and restless, and feeling a bit burned out. So I decided to take a long walk with my camera and see if I could find interesting things and/or people to photograph.

I was one block away from the Federal Reserve Bank of Philadelphia when I came across a group of homeless folks sitting on the sidewalk. One guy was very busy, working very hard scraping dirt from coins and other metallic objects. I stopped and asked him what he was doing. He introduced himself as Danny (pic to the left), and told me that he was recently homeless. He said that he made an arrangements with a friend of his who owns a local laundromat. Danny explained that his friend lets him stop by the laundromat every once in a while and collect whatever he can from the numerous washing machine drains, and Danny can keep whatever he finds. Danny told me that he finds tons of coins, from pennies to quarters, and often finds jewelry and other valuable items. He showed me a clutch of gold necklaces. He let me keep a very worn out penny.

At this point, a small crowd formed around Danny, attracted by the bright flashes from my camera. One passerby asked Danny why he didn't simply wash all the items at once with water. Danny explained that he liked scrapping the coins on the ground. Kept him busy.

After chatting with Danny for a few minutes, I thanked him for his time and for letting me take a few pictures. I then walked over to the Philly Federal Reserve Bank. The bank was advertising a "Money in Motion" exhibit from a large banner at the corner of Arch and 7^TH streets. Admission was free.

I was embarrassed for the Bank.

Here we have the most powerful central bank in the world, a bank that has been printing money out of thin air in an effort to "save the American economy," a bank that wants the world to believe that giving money away to people who have amassed much of their obscene wealth by figuring out ways to get very rich without providing useful goods or services, is the best way to extricate America from the Great Recession. I see "Money in Motion" and I think, "Hmmm, our central bank actually wants to show off how it helps the masters of greed who caused the financial crisis get even richer by sucking untold billions from taxpayers pockets. Hmmm...."

Many Americans know that the federal government spent hundreds of billions of dollars to bailout the insurance giant AIG. What many don't know -- because most mainstream media outlets don't want to go there -- is that the investment bank Goldman Sachs got about $12.9 billion from AIG's bailout bundle. Don't believe me? Read about it here. Just as sickening: foreign banks got billions of that bailout cash as well, including Barclays PLC, Societe Generale, and Deutsche Bank. Money in Motion, baby.

The AIG bailout was a crony capitalism, plain and simple. Goldman has never been a vital part of the American financial landscape. Without AIG's bailout money, Goldman would have taken a huge loss, but would have survived. Meanwhile, countless commercial banks, the ones that lend money to businesses and consumers and help keep Americans employed, are still failing at an alarming rate.

A laundromat owner -- someone who makes money by providing a useful service to her community -- lets a homeless guy clean out washing machine drains and keep whatever he finds: that's my idea of money in motion. It's honorable, civilized and far more American than any multi-billion dollar crony bailout.

Here's an idea: why doesn't the Philly Fed Bank open a small office that's open to the street where people like Danny can connect with business owners who are looking for simple services like cleaning laundromat drains or sweeping floors. They could call it the Informal Services Marketplace. Could help a lot of people who can't find work in the formal economy, or people with mental issues who aren't mentally fit enough to hold down a solid job. Criminal background checks would be mandatory, of course.


I'm glad I bumped into Danny that night. It's so easy to feel overwhelmed by an anemic and dwindling income, healthcare inflation and child support payments. It's good to get some real perspective every once in a while. Helps to rejuvenate the entrepreneurial spirit.

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