A college professor is concerned that if a temporary eviction ban issued by the U.S. Centers for Disease Control (CDC) is extended beyond Dec. 31 without a Congressional stimulus package, landlords could lose their properties to banks and other financial institutions.
“Then we would have 2008 all over again where the banks end up owning a lot of properties,” said Monica Eppinger, a professor of property law and national security law for St. Louis University School of Law. “One thing we learned from 2008 is that banks don't want to own properties. As soon as they get them, they try to get rid of them.”
According to Pew Research, the 2,330,483 foreclosure filings in 2008, which represented 1.8% of all housing units, lead to intervention by the U.S. Treasury Department with the Troubled Asset Relief Program (TARP).
The state of Missouri is finally receiving some relief from COVID-19 job loss. The unemployment rate was down in September to 4.90% from 7.00% in August and 10.10% in May, according to media reports.
However, many workers in Missouri are not monetarily situated to begin paying their rent as indicated by members of the advocacy group, KC Tenants, who together chained themselves to the doors of the Jackson County Courthouse last week to stop more than 600 landlords from completing evictions, according to media reports.
Eppinger told the St. Louis Record that how property owners fare financially under the CDC’s extended eviction ban depends on their business model with smaller property owners potentially defaulting on their mortgage.
“It would put the property in the hands of somebody who might manage it more efficiently but that's if there are buyers, if most of the market is functioning, and that's if not everything goes on sale at the same time,” she said.
The ACLU states on its website that it filed a lawsuit in federal court earlier in October against Jackson County Presiding Judge David Byrn for violating the CDC’s eviction moratorium.
“If landlords evict people on a mass basis while expecting to fill those empty apartments with new tenants, those new tenants may not have the money either and the rental market of landlords seeking tenants could contract, which would result in more displaced people, more people couch surfing, looking for temporary shelter and people living in cars,” Eppinger said. “That's what we could be seeing in the worst case scenario.”