The Economic and Moral Case Against Eviction Moratoria
Back in September, Wall Street Journal economic reporter Jon Hilsenrath interviewed me for a long news story he was doing on the effects of President Trump’s economic policies. He asked largely tough questions that made me think his piece would be somewhat critical of Trump. It was, although it was largely fair. But one question he asked, which he probably thought was tough, was actually a softball. We had been discussing Trump’s moratorium on evictions of residential renters and I said that I opposed it. “You want landlords to evict millions of people?” he asked. “No,” I answered, “I don’t want that at all. I want them to be allowed to evict. Giving them back that freedom will probably cause most of them to work out rental payments with their overdue tenants.”
The same reasoning applies to President Biden’s latest moratorium on evictions. There are many good reasons to oppose it. One is constitutional, but I’ll leave that to my constitutional lawyer friends. The others are economic and moral.
These are the opening two paragraphs of David R. Henderson, “Eviction Freezes: Unfair and Unproductive,” Defining Ideas, August 12, 2021.
Note, by the way, the statement that a tenant must sign to take advantage of the moratorium.
The stereotype of the landlord/tenant situation is that the landlord is rich and the tenant is poor. That stereotype often doesn’t apply. I saw that dramatically in 1980. After the San Francisco Chronicle had published an op-ed I had written against rent control in San Francisco, a group of landlords in Berkeley invited me to give a talk on the issue on a Saturday morning. I showed up well dressed and found that I was the best dressed person in a group of about sixty people. Appearances, admittedly, are sometimes deceiving, but my take was that no one in the room was a fat cat. As the audience members stated their concerns, I found that these appearances were, by and large, accurate. Many landlords in the room were in their fifties, owned two to four rental units, and had planned for the net income from the units to finance their retirement. Even if the government held the rent to only 10 percent below the market, landlords whose net income absent rent control would have been 30 percent of the rent would face an income drop of a third (10 percent as a fraction of 30 percent.)
Read the whole thing.