Justice for local housing providers? U.S. must face claims for COVID-era eviction losses

Photo by Infrogmation of New Orleans, CC BY-SA 2.5, via Wikimedia Commons

A recent federal appeals court ruling has revived the possibility that landlords may receive compensation for financial losses suffered during the COVID-19 eviction moratoriums. The ruling allows landlords to sue the U.S. government under the Fifth Amendment’s “takings” clause. AAGLA reports.

During the COVID-19 pandemic, California implemented some of the most extensive eviction moratoriums in the country. While intended to protect tenants facing legitimate financial hardship, these policies placed a significant financial burden on rental housing providers, many of whom were forced to cover mortgage payments, property taxes, and operating costs without rental income. Although the state eventually implemented the COVID-19 Rent Relief Program, many housing providers received only partial aid or none at all, leaving them to shoulder substantial losses.

Recognizing these harms, the California Rental Housing Association (CalRHA) filed a lawsuit against the State of California under the Fifth Amendment's “takings” clause, arguing that the moratorium constituted an unlawful seizure of private property without compensation. Unfortunately, the federal court dismissed the case as moot after the state’s moratorium was lifted—without addressing the core constitutional claim.

Recently, a new development at the federal level could reopen the conversation on eviction moratoriums:

Go Deeper:

• LA's eviction moratorium analysis: “Equitable” city meddling harms landlords/tenants
• Data says: Public housing authorities comprise “disproportionately large share of eviction cases”
• Eviction moratorium's gone, but most CA landlords can't afford to evict

A federal appeals court recently ruled (7-3) that the U.S. government must face legal claims from landlords seeking compensation for losses related to the COVID-19 eviction moratorium enacted by the CDC in 2020–2021.

The court found that rental housing providers may sue under the Fifth Amendment's “takings” clause, arguing the moratorium effectively seized private property without compensation.

The decision may be appealed to the Supreme Court, but if upheld this could result in billions in compensation to impacted rental property owners.

While this case pertains to the federal eviction ban, it could be a powerful precedent for claims related to pandemic-era restrictions imposed by California and many local jurisdictions, which went far further.

This could set a powerful precedent and reopen legal discussions around more extensive local and state moratoriums, including those in California.

Read the whole thing here.

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