Pandemic Eviction Ban Backfires: Massive Payoff Looms

A Texas landlord who lost over $1 million during the pandemic eviction moratorium just won a major legal victory that could unlock billions in taxpayer-funded compensation and he’s banking on the Trump administration to cut the check.

Story Snapshot

Over 1,500 landlords won a federal appeals court ruling allowing them to sue for losses from the 2020-2021 eviction moratorium, seeking $1.5 billion in settlements.
The rental industry estimates $57 billion in total pandemic losses while government rental assistance programs disbursed only $5 billion of $46 billion allocated by mid-2021.
Plaintiffs argue the CDC moratorium violated Fifth Amendment property rights by forcing them to cover taxes, maintenance, and debt without rental income.
Settlement negotiations with the Justice Department are ongoing, with landlords hopeful the Trump administration will prioritize their constitutional claims.

When Emergency Powers Collide With Property Rights

Matthew Haines thought he was building financial security through real estate investment. Then the Centers for Disease Control and Prevention declared his rental properties a public health tool. The September 2020 federal eviction moratorium barred him from collecting rent or removing non-paying tenants, yet property taxes, mortgage payments, and maintenance bills kept arriving. Six years later, Haines stands at the center of a constitutional battle that pits emergency government powers against the bedrock principle that the government cannot seize private property without compensation. His class-action lawsuit survived an appeal and now threatens to cost taxpayers $1.5 billion or potentially much more.

The Moratorium That Became a Government Taking

The CDC eviction ban stretched from September 2020 until July 2021, when the Supreme Court struck it down in Alabama Association of Realtors v. HHS, ruling the agency lacked congressional authority for such sweeping action. During those ten months, over ten million renters fell behind on payments within the first four months alone. Landlords covered operational costs while rental income vanished. Goldman Sachs estimated $17 billion in back rent accumulated by August 2021. The government allocated $46 billion in rental assistance through the December 2020 relief package, but state bureaucracies bottlenecked distribution. Only $5 billion reached landlords and tenants by mid-2021, leaving property owners stranded with mounting debt and no legal recourse to collect.

A Federal Circuit Reversal Opens the Floodgates

Haines and fellow plaintiffs initially lost their Fifth Amendment takings claim in the U.S. Court of Federal Claims in 2022. The 2025 Federal Circuit reversal changed everything. The appeals court ruled that landlords could proceed with claims that the moratorium constituted an unconstitutional taking without just compensation. Legal analysts note this decision opens the door for billions in potential claims beyond the current $1.5 billion settlement target. The National Apartment Association documented $27 billion in losses among its members alone. The Federal Circuit’s willingness to recognize pandemic-era emergency orders as compensable takings establishes a precedent that could extend to other industries forced to absorb government-mandated losses during COVID-19, from shuttered restaurants to closed gyms.

Why Landlords Are Banking on Trump

The Justice Department maintains silence on the litigation, but landlords see opportunity in the administration change. Trump’s real estate background and general skepticism toward regulatory overreach fuel optimism for a favorable settlement. The prior administration enacted the original CARES Act eviction ban in March 2020, but the CDC’s subsequent extension under dubious public health authority became the constitutional flashpoint. Industry voices argue Trump’s team understands that crushing small landlords destroys rental housing supply, which ultimately harms the tenants these policies claimed to protect. New York City’s public housing saw rent collection rates plummet from 95 percent to 60 percent, creating over $500 million in arrears. When landlords exit the market or defer maintenance due to financial devastation, renters face deteriorating conditions and shrinking availability.

The settlement talks represent more than financial recovery for Haines and his fellow plaintiffs. This case tests whether the government can commandeer private property during emergencies without triggering constitutional compensation requirements. The answer will shape how future crises balance public welfare against property rights. For landlords who weathered foreclosures, investor lawsuits, and years of legal fees, vindication matters as much as the money. For taxpayers, the bill for well-intentioned but legally questionable pandemic policies continues to grow. The incoming administration faces a choice between protracted litigation risking even larger judgments or a settlement that acknowledges what the Supreme Court already confirmed: the CDC exceeded its authority, and property owners deserve compensation when government takes without paying.