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Why the overturned eviction moratorium may be too late

Yahoo Finance’s Dani Romero breaks down why the overturned eviction moratorium may be too late.

Video Transcript

- Welcome back to "Yahoo Finance Live." Well, the Supreme Court overturned the pandemic eviction moratorium last week, bringing an end to a ban that's been in place for well over a year. But for landlords who haven't been collecting that rent, they say that action is a little too little, too late. Let's bring in Yahoo Finance's Dani Romero for that part of the story.

And Dani, I know you've been speaking to landlords here. What are they saying about, you know, how big of a hole they've been in over the last 18 months and the challenges they see ahead as this ban basically gets phased out?

DANI ROMERO: Yeah, I spoke to a landlord in California that-- he pretty much slammed the decision and said, you know, like you said, it's a little too late. He had to put up his house for sale, which he's owned since 1983. And his tenant owed him about $70,000 in back rent. And so, you know, it was a hard decision for him. But he said he couldn't keep up with the payments. It was like his last resort.

Now, California is one of those states that has an eviction moratorium in place until September 30. So tenants still are protected there. But for this landlord, he's really, really doubtful that he'll even be able to get back to-- get his money back that he's owed.

And, you know, some of the challenges is that after the Supreme Court decision late Thursday is that it caused a lot of confusion, questions, and real concern. And so Congress authorized 46 billion in rental assistance, and just a fraction of that has actually been distributed. Just 11%, or 5 billion, of that federal aid has actually been distributed by state and local governments after Congress approved it. And people really need this money. And census estimates show that as many as 1.2 million households say they're very likely to face eviction in the next two months, and more than 8 million people say that they're behind on rent.

And so however, the ruling doesn't mean that renters in states without protections will be evicted from their home immediately. At least half a dozen states, including New Jersey, California, New York, and Washington, have policies in place to keep these tenants in their homes.

- And Dani, I mean, we've heard kind of those concerns from landlords, too, you know, maybe caught in a worse position than some larger landlords or private companies out there that lease spots to renters across the country. But when you focus in on the renters' side, as you're talking about, maybe not in states with that protection, there is still kind of a timeline question around how long that might take because evictions aren't exactly a speedy thing either. So I mean, when you talk to them, what did you hear about maybe the stress levels around it and kind of the expectations moving forward?

DANI ROMERO: Well, one thing is for sure is that, you know, the courts have been backlogged, and they've been backlogged for almost a year. And so I'm hearing from both sides-- the tenant and the landlord-- that the filings are just taking-- it's gonna take longer than usual. So you won't really be, like I said, evicted immediately from your home. But it really comes down to that federal assistance that is, you know, taking a really long time to roll out.

And these renters are applying for this assistance, but it's really not come-- it's not really handed to them yet. And so I think that's what the biggest bottleneck is for them, and a headache for both sides, right, because they're both applying for this assistance and it's not really going through.

- Yeah, I think the fascinating thing-- the most shocking thing there-- only 10% of that 47 billion you mentioned allocated there from the Treasury Department. Only 10% tapped to help in all this-- just kind of speaks to how hard it's been to kind of get the support where it needs to go. But Dani Romero, I appreciate you bringing us that. Very fascinating. I encourage everyone to check that story out up on yahoofinance.com.