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Of Eviction Notices And Lumber.

We are going to do a “two-fer” post today simply because the stories are relatively short.

ALABAMA REAL ESTATE AGENTS ASK SUPREME COURT FOR RELIEF.

When the COVID pandemic hit and companies were shut down, the government, through the CDC imposed rules that did not allow for evictions of people from homes and residences.

In May, a group of realtors in Alabama sued the federal government over the evictions claiming the CDC did not have the statutory authorization to make the rule.

A District court agreed with the realtors. However, when the government said they wanted to appeal the ruling, the Court stayed the ruling until the appeal could be made. The Real Estate agents are asking the Supreme Court to take up the case.

A group of Alabama real estate agents asked the Supreme Court on Thursday to block a federal moratorium on evictions that was imposed because of the COVID-19 pandemic. In May, a federal district judge agreed with the group that the Centers for Disease Control does not have the power to impose the policy, but she put her ruling on hold to give the government time to appeal. The Alabama Association of Realtors urged the Supreme Court to intervene on an emergency basis and lift that stay order, telling the justices that “Congress never gave the CDC the staggering amount of power it now claims.”

The moratorium at the heart of the case was imposed by the CDC in September after a similar moratorium enacted by Congress expired. The moratorium bans landlords from evicting tenants who cannot pay their rent, with fines and even criminal penalties for landlords who violate the ban. The real estate agents argue in their 35-page filing that the moratorium “shifted the pandemic’s financial burdens from the nation’s 30 to 40 million renters to its 10 to 11 million landlords – most of whom,” like the challengers in this case, “are individuals and small businesses.” The challengers say landlords have been losing over $13 billion in unpaid rent each month as a result of the policy. The moratorium is currently scheduled to expire on June 30, though the CDC has previously extended the moratorium twice, and the challengers tell the court that the agency could do so again.

In May, U.S. District Judge Dabney Friedrich vacated the moratorium. She concluded that the moratorium went beyond the authority that Congress had given the CDC in the federal public health laws on which the agency relied to impose the order. But she put her ruling on hold while the government appealed, and the U.S. Court of Appeals for the District of Columbia Circuit left the stay in place, leading to Thursday’s filing.

The challengers tell the justices that the stay “will prolong the severe financial burdens borne by landlords under the moratorium,” which could reach as much as $200 billion. Moreover, they add, with the “downward trend in COVID-19 cases and the effectiveness in vaccines,” any public health rationales for the moratorium are now pretextual.

The real estate agents’ request went to Chief Justice John Roberts, who handles emergency requests from the District of Columbia. Roberts can act on the application himself, but he is more likely to refer it to the full court.

This is one of those “the road to hell is paved with good intentions” cases.

While we suspect that many people will agree that the moratorium on evictions was a good idea, as people were not able to work during the pandemic because of state regulations and therefore not pay rent and mortgagees, the fact of the matter is that landlords and property owners were left holding the bag for continued costs. Banks still wanted payments on loans. Rental properties still had to be maintained. Insurance on properties had to be paid. Perhaps most disturbing was that property owners weren’t getting any relief from governments on property taxes. Owners could not evict those who were not paying, but were still expected to pay the costs associated with rentals.

Secondly, if the CDC did not have the authority to make a moratorium on evictions, shouldn’t someone in the government have said “we can’t do this?”

What are we thinking….. of course no one would say that. Far too often the government doesn’t care about their own rules and laws.


LUMBER PRICES TO GO UP – RETROACTIVELY.

Amid surging lumber prices that are already adding an average of $36,000 to the construction cost of new homes, the Biden administration is moving forward with plans to double tariffs on lumber imported from Canada.

The Commerce Department announced on Friday that it was taking the first step toward hiking so-called “anti-dumping tariffs” on Canadian lumber from an average rate of 8.99 percent in 2018 to 18.32 percent for 2019. Yes, 2019. If approved through what is likely to be a lengthy review process, the tariffs would apply retroactively to purchases made for the past two years. That means American importers could be on the hook for millions of dollars in taxes they didn’t even know they would owe—taxes that will likely be passed down the supply chain in the form of higher prices.

That’s only the first bit of insanity here. Anti-dumping tariffs, in theory, are meant to cancel out what’s seen as unfair subsidies for foreign competitors to American companies. They are supposed to be deployed in order to prevent import prices from becoming so low that they threaten domestic producers—even though there’s really nothing terrible about low prices for imports.

But lumber prices are anything but low right now. In fact, they are up over 250 percent in the past year, and the price per thousand feet of board lumber just hit an all-time high.

We can argue all day long whether the idea of tariffs is good or bad, but the fact that the government wants to pass a tariff and then reach back into history for taxes is nuts.

What further complicates this is that in a time where it seems that politicians are talking about the ubiquitous idea of “affordable housing,” this is a measure that would price even more people out of owning a home.

But what does the government and any government agency care about the effects of policies on people? In fact, in this case, by law the agencies are prohibited from considering the effect on citizens:

Unfortunately, as Scott Lincicome, a Cato Institute senior fellow for trade issues, points out, the law guiding the U.S. anti-dumping tariff process explicitly forbids consideration of how new duties might impact consumers.

That, in a nutshell, is the problem with just about all tariffs. If you ignore how higher taxes on goods might harm individuals and businesses, you’re not really seriously considering the consequences—you’re just doing what the beneficiaries of that policy want. Policy making cannot be disconnected from economic reality, no matter how much politicians might want it to be.




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