Jimmy’s Colorado Politics Column | Eviction moratoriums illusory
Written by Jimmy at the Crossroads on May 25, 2021
While hosting KNUS radio Saturday morning, I received a stirring call from listener John in Denver. His voice shaking, John told me he owns six houses in the Denver-Metro area; he lives in one and rents out the other five. Several months back, John explained, his tenants learned that “they no longer had to pay me rent.”
He went to collect, and the response was deeply frustrating. “They said, ‘We don’t have to pay rent’ (and) gave me a CDC declaration page.” John eventually took them to court for eviction for nonpayment of rent, but due to the existing federal moratorium, “the judge/magistrate stayed the action til June 30. So, I have gone 6 months without rent, possibly 7. I can’t get the people out.”
Given the amount of time that’s passed and his tenants’ refusal to pay, John said, he filed for eviction with no option to cure. At this point, “I just want them out of there,” he explained. Now, he’s counting down the days to June 30.
John’s is but one of many stories of the harm that can result from well-intentioned government action — in this case, protecting struggling renters from being kicked out.
Gov. Jared Polis got this ball rolling when he issued Executive Order 20-51 on April 30, 2020. It forbade filings of residential and commercial evictions in all circumstances except “where a tenant poses immediate and serious threat to another individual or causes significant damage to the property.”
Polis kept renewing the order until he let it expire on Dec. 31, citing the federal moratorium originally put in place by the Trump administration and codified by Congress. The CDC’s federal order, still in effect though challenged in court, limits the circumstances where the moratorium applies.
As the Denver Gazette summarized in March, “While (the federal order) stops landlords from evicting tenants who’re behind on rent because of the pandemic, the order still allows landlords to proceed right up to the point where those tenants are physically removed. What’s more, it also allows landlords to seek evictions for tenants whose lease has expired, which advocates and lawyers say can be used as an end-around to get rid of people behind on their rent.”
Despite the exclusions, for many landlords like John, the federal moratorium still puts them in a serious bind. Because his tenants apparently think they don’t have to pay rent, he has had to pay his property bills without covering costs from rent paid. I didn’t ask him how much he was losing each month, but I get the palpable frustration in this man’s voice.
While these orders were intended to help struggling tenants during COVID-19 and thereby ensure fewer people living on the streets during a deadly pandemic, the government failed to account for two major consequences.
First, they disregarded the harm to smaller landlords. There seems to be this image of “big apartment complexes” that can take the hits. Even that premise is faulty, but what about the little guy who rents out homes? Or the little guy who invested his life savings to rent homes for his retirement plan?
Second, it can actually hurt renters themselves. Extended eviction moratoriums offer a false promise to tenants. In the short run, the burden is eased, and they are financially helped. But eventually, the bill comes due. Most landlords have been willing to work with cooperative tenants on a mutual solution, a point the Colorado Apartment Association has stressed for a year, and evictions this year remain far below pre-pandemic levels.
None of this absolves renters of their obligations, no matter how many people seem to have gotten the impression that it does.
As I noted in May of last year, economics is about incentives. “When government forbids most evictions outright, people are much more likely to take it as an invitation to stop making payments altogether.” John’s story is a literal case in point.
The effects of such government intervention were also foretold by French philosopher-economist Frédéric Bastiat some 270 years ago. Bastiat cautioned that economists must consider not only the anticipated positive effects that one may see from government action, but the unseen consequences once a series of events unfolds as well.
The bad economist “takes account of the visible effect,” he said, while the good economist “takes account both of the effects which are seen and also of those which it is necessary to foresee.”
“Now this difference is enormous,” Bastiat continued, “for it almost always happens that when the immediate consequence is favorable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come…”
Unfortunately, in their well-intentioned effort to help renters cope with the pandemic, Polis and the feds failed to consider the pain they’d eventually inflict on people like John and his misled tenants. It’s understandable, though: Government is filled with well-intentioned “bad economists” who end up doing more harm than good.