Eviction Moratoriums Hurt Those They Seek to Help

By John Seiler
John Seiler
John Seiler
John Seiler is a veteran California opinion writer. He has written editorials for The Orange County Register for almost 30 years. He is a U.S. Army veteran and former press secretary to California State Sen. John Moorlach. He blogs at johnseiler@substack.com
August 6, 2021 Updated: August 9, 2021

Commentary

Joe Biden’s renewed eviction moratorium will hurt not only landlords, but the tenants he seeks to help.

The Epoch Times has published some excellent articles on how Biden’s action slams small landlords and is a sop to the far left. I want to emphasize something else: property rights. It’s even more important than the related “free market.” Because if you can’t own something as property—a car, a house, an apartment complex, a factory—you can’t sell it in a market.

An extreme example occurred in Poland from 1939 to 45, as the Nazi and Soviet armies murdered and raped residents, looted wealth, and committed destruction and genocide. The Soviets believed all property belonged to the communist state. The Nazis believed only “Aryans” had property rights; but in 1944, the German property “owners,” too, were driven out of Poland, which was incorporated into Stalin’s empire.

Let’s first enumerate why, despite the recent trespassing, the United States still maintains the world’s strongest property rights. We begin with the most important:

1. The U.S. wields 6,000 nuclear weapons. No army can conquer America. Switzerland, which in some ways has stronger property rights laws and an excellent military, has no nuclear weapons.

2. The U.S. conventional military is the world’s strongest. Even if it loses that perch, the military could still easily repulse any invasion, at least for the foreseeable future.

3. U.S. property rights have roots prior to the country’s founding in 1776, deep in the common law of the Middle Ages of Great Britain. As the great English historian and lawyer William Frederic Maitland wrote in the 1911 Encyclopedia Britannica: “For the last seven centuries, little more or less, the English law, which is now overshadowing a large share of the earth, has had not only an extremely continuous, but a matchlessly well-attested history, and, moreover, has been the subject matter of rational exposition.”

4. Despite some ongoing inflation, the dollar is the world’s reserve currency and is likely to remain so. Except for the English pound, it is the world’s oldest currency never to have been replaced. The Euro is less than three decades old. The yen was reestablished after World War II. The yuan comes from an unstable regime with limited property rights, showing how simply having a market is not enough.

5. America’s democratic system has enacted course corrections after some of the worst attacks on property rights. The 1930s New Deal socialist programs were curtailed and moderated during post-World War II in the late 1940s and 1950s. Lyndon Johnson’s Great Society excesses led to the “stagflation” of the 1970s, which in turn were curbed by the Reagan tax and regulation cuts of the 1980s.

How Rent Moratoriums Hurt Everyone, Including the Poor

A rent moratorium is a curb on property rights. An owner’s contract with the tenant to pay rent for a property is curtailed. In that sense, the landlord doesn’t even “own” the property, yet still must pay for the mortgage, upkeep, and so on. That devalues the property.

When I was working with California State Sen. John Moorlach during the pandemic, we got calls from distraught people who lost their jobs and couldn’t pay the rent. It was painful to hear. We did our best to help them, such as pushing their claims through the Employment Development Department’s slow system.

But we also heard from distraught landlords. It was hard hearing their cries of pain, because they couldn’t pay their bills, either.

One woman I recall said she had based her retirement on rent from owning a six-unit apartment complex. She had to dip into her meager savings to pay her own bills.

Unfortunately, I couldn’t do anything for her but sympathize. I said Moorlach was a CPA who, before entering government service, had many clients like her, and so had special sympathy for her plight. He opposed the moratorium. But there wasn’t much our office could do as part of the minority Republicans in a Democrat-run state.

She said she also couldn’t sell her property without dropping the price very low, because future revenue was uncertain. She wasn’t some owner of a gigantic apartment complex who could take out a line of credit, but a woman stuck in the crosshairs of foolish Democratic politicians.

The result of this will be, when the moratorium ends, massive sales of such properties—and their conversion to non-apartment uses. Many thousands will be torn down and replaced with McMansions for the rich, often owned by investors from China. That will reduce the number of rental units, driving up their prices and hurting the poor and middle classes.

What about California rent controls imposed in recent years? Those also encourage selling apartment complexes and turning them into something else.

So far, I don’t see any move by the Democrats to ban converting property into McMansions. The rich people in the state probably have enough clout to prevent that. But if that happened, it would be a further reduction in property rights—raising prices further.

Conclusion

Of course, except for radical libertarians, most believe that some government regulation of property is necessary. In his books, Maitland showed how, after William the Conqueror invaded in 1066, he and subsequent English kings sent judges around to settle property disputes. These precedents accumulated and formed the basis of the strong property rights in our law, down to this day.

We regard the Magna Carta of 1215 as a great charter of liberty. But much of it is concerned with property, such as: “Neither we nor our officials will seize any land or rent in payment of a debt, so long as the debtor has movable goods sufficient to discharge the debt.”

Then there’s Judge Sir Edward Coke’s famous dictum from 1604: “That the house of every one is to him as his Castle and Fortress as well for defence against injury and violence, as for his repose.”

Nowadays the economic Marxists in our universities and government deprecate property rights while the cultural Marxists excoriate America’s “Anglo-Saxon political tradition”—preferring, perhaps, a Stalinist-Maoist one.

Although the rent moratorium isn’t the only cause, is it any surprise this and other assaults on property rights have raised median housing prices in California to $819,630?

John Seiler
John Seiler
John Seiler is a veteran California opinion writer. He has written editorials for The Orange County Register for almost 30 years. He is a U.S. Army veteran and former press secretary to California State Sen. John Moorlach. He blogs at johnseiler@substack.com