The CDC Eviction Moratorium: An Epic Case Study in Very Bad Policy

Good intentions will create very few winners and many, many losers.

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Dear Capitolists (Capitolisters? Capitolistes?),

I had originally planned to ease you into the whole “policy analysis” thing here at Capitolism by starting with a little “how to think” primer, but then, as the saying sorta goes, we got punched in the mouth by the Mike Tyson of Bad Policy Ideas—the recent order from the Centers for Disease Control and Prevention (CDC) “temporarily halt[ing] residential evictions to prevent the further spread of COVID-19” until December 31, 2020. The CDC eviction moratorium has it all: Good intentions, urgency, poor design, a small group of (potential) winners and a much, much larger group of direct (intended) and indirect (unintended) losers—including some (many) of the aforementioned winners.

It’s seriously just too good (bad) to pass up. So we won’t.

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  1. Avatar photo
    WilliamJ

    "Capitolistas"

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  2. Anthony Pasquini

    I think you gloss over one of the greater harm to renters: that they are still on the hook for "missed" rent when the order is over. If the logic is they need relief because they can't afford to pay due to Covid job loss then it must also be logical that they won't be able to put money into savings (well perhaps their rent money could go into a meager 1% checking acct) so they can pay the larger bill that will be due when this is over. If they go back to their previous job, hopefully (no guarantee) at the same pay, and they are like most Americans, living paycheck to paycheck and unable to save, how will they ever pay that larger bill to their landlords? And if my larger familial experience is any indication the fines that are allowed to accumulate can be upwards of $50/day when rent is "late."

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    Jonathan Nebel

    Three cheers for this article! And, for the Arnold Kling article that is linked!

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    Victor Clairmont

    Great breakdown Scott!

    So, even well meaningful policy can backfire spectacularly. The Great Recession/subprime mortgage bust was started during the Clinton Administration and got bipartisan support with bills to help low income families get homes. They figured once they lower the credit and other things, families, once they got a house would start keeping up with them and paying. Real estate agents and banks were happy to play along. Problem is, if people have problems paying bills on time and making money, getting a home doesn’t magically rectify someone’s lack of discipline with finances. Defaults began accruing. 1.5 trillion in housing loans built up and went bust in the Bush administration. Sure, the government meant well, but the policy was a disaster that my generation is still paying for.

    It seems as Scott points out this policy was a knee jerk reaction. Of course, no one wants to see anyone thrown out on the street during a pandemic, but what government officials and citizens don’t realize is policies have consequences. Now, I don’t know what the solution to this particular problem is now that we are here besides opening up the economy and letting people get back to work or search for work, while having to trust that they will socially distance etc.

    But yeah, a government shutdown even to save lives, has a massive effect on the economy and in turn people’s livelihood and health.

    Great article again.

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    David Ridenhour

    Scott, in addition to reading a fantastic and on point article, I couldn’t help but also read the passage on the moratorium having it all in an SNL-Bill Hader-Stefan voice and honestly that is how yesterday was survived. Cheers sir.

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    Anony Moose

    I like “Capitolistas”. Has a very insurgent feel to it.

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    John D. Wright

    What happens and I fear it may be happening to me is that poor people who are employed and could pay their rent just don't. They will sit free for six months or a year and when things finally return to normal they will just move to some other apartment. They will have lived rent free though for a long period of time and the landlord will eat all those losses. This is doubly bad because the landlord is also eating those loses for the legitimate people out of work.

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  8. Tim Johnson

    This could have been an OK short-term solution if coupled with a serious national strategy to contain Covid. But instead we have a national government who gives mixed messaging on simple things like wearing a mask and social distancing.

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    Man-Eating Cow

    One of the rhetorical advantages of liberalism over conservatism is that liberalism offers solutions (even if they're often bad ones), while conservatism recognize that there often is no solution: There are only tradeoffs, and often doing nothing at all is the best option. But that gets the rejoinder that conservatives have no solutions to offer. Put in hifalutin terms, conservatives constantly have to work against meliorism, the belief that there _must_ be a solution if we can but muster the intelligence to find it and the will to apply it.

    You can see that in play in some of the comments here.

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    1. Tim Johnson

      Good post but instead of branding it 'no solution,' why not just argue to let the market sort it out, or acknowledge that doing nothing is preferable to bad policy?

      I do think most would understand that (at least I hope so).

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  10. Jim Knight

    We (the government) has set up tent cities for refugees in Jordan and on our border with Mexico. Perhaps we should look at this option before having the CDC (of all entities) stripping landlords/U.S. citizens of the right to enforce their private contracts.

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