Supreme Court weighs landlord eviction loss claims
Landlords seek billions in federal compensation, arguing COVID eviction moratoriums were an uncompensated Fifth Amendment "taking." A court ruled it was a
Landlords across the country are intensifying their campaign for federal compensation, arguing they were unfairly forced to absorb the costs of housing tenants for free during the COVID-19 pandemic’s federal eviction moratoriums. Property owners are asserting that the government’s emergency public health mandates constituted an uncompensated "taking" of private property under the Fifth Amendment, setting the stage for a landmark Supreme Court battle over billions of dollars in lost rent.
The legal struggle centers on the eviction ban issued by the Centers for Disease Control and Prevention (CDC), which first took effect on September 4, 2020. The mandate, which prohibited landlords from evicting tenants for non-payment of rent, was extended multiple times before the U.S. Supreme Court struck it down on August 26, 2021.
Throughout that period, industry advocates say property owners were effectively turned into involuntary social service agencies. According to data from the National Apartment Association (NAA), total missed rent payments nationwide climbed to an estimated $90.3 billion during the pandemic. Smaller, "mom-and-pop" landlords—who often rely on rental income to pay mortgages and property taxes—bore the brunt of the crisis, absorbing roughly $30 billion in direct losses. On average, impacted households owed approximately $6,000 in back rent when the bans were eventually lifted.
The financial strain triggered a wave of litigation. In August 2021, a coalition of landlords represented by attorney Jonathan F. Mitchell filed a lawsuit in the U.S. Court of Federal Claims, seeking damages for the government’s interference with their property rights. The case gained significant momentum in August 2023, when the U.S. Court of Appeals for the Fifth Circuit ruled that the CDC had exceeded its statutory authority. More importantly, the appellate court signaled that the moratorium constituted a physical taking of property, citing the 2012 Supreme Court precedent in Arkansas Game and Fish Commission v. United States, which established that temporary government actions can indeed trigger the requirement for just compensation.
The Biden administration challenged this ruling, filing a petition for a writ of certiorari with the U.S. Supreme Court in September 2023. The high court is currently deciding whether to hear the case. Should the justices agree to take it up, the resulting ruling could force the federal government to pay out potentially billions in damages to property owners.
For many local landlords, the potential outcome represents more than just a financial recovery; it is seen as a constitutional defense of property rights. The NAA and the National Association of Residential Property Managers (NARPM) have remained vocal throughout the proceedings, arguing that while the pandemic necessitated public health measures, the financial burden should not have been placed exclusively on the shoulders of individual housing providers.
Critics of the landlords’ position, including housing justice advocates and the federal government, have argued that the moratoriums were vital public health measures designed to prevent homelessness and the spread of the virus. They contend that the government was acting within its police powers to maintain social stability during a global emergency and that individual property rights are not absolute in the face of such crises.
As the industry awaits a decision from the Supreme Court, the case remains one of the most significant property rights disputes in recent history. The outcome will likely serve as a definitive legal baseline for how far the government can go in interfering with private property contracts during future national emergencies.