More than 1,500 property owners are pressing the U.S. government for up to $1.5 billion in compensation tied to the pandemic-era federal eviction moratorium, escalating a legal fight that could reshape how Washington handles emergency housing policy and private-property claims. Fortune reported Tuesday that Texas landlord Matthew Haines and other owners are in settlement talks with the Justice Department, and Haines said he hopes to “achieve vindication for ourselves and, more importantly, recover money that should have flowed to my investors over the last six years,” underscoring the financial stakes for smaller operators as well as institutional owners.
At the center of the dispute is the Centers for Disease Control and Prevention order issued in September 2020 that temporarily barred many residential evictions during the Covid crisis. In the federal lawsuit, the landlords argue the moratorium amounted to a government taking under the Fifth Amendment because owners had to keep housing tenants without receiving full rent or compensation. Creighton Magid, a lawyer for the plaintiffs, told Associated Press that the policy “unlawfully denied compensation” and that “the financial burden should be borne by the government, not individual property owners,” a position that goes beyond a narrow housing dispute and into constitutional limits on emergency power.
The legal backdrop favors a more serious hearing for those claims than landlords initially received during the pandemic. Reuters reported that the moratorium, which ran from September 2020 until August 2021 in various forms, ended after the U.S. Supreme Court concluded the CDC lacked authority to impose such a sweeping measure without clear congressional approval. The court said in its unsigned opinion that the agency had asserted a “breathtaking amount of authority,” language that landlords and their counsel now cite as evidence that the federal government pushed beyond statutory limits even if the public-health rationale held broad support at the time.
For many owners, the case is less about legal theory than balance-sheet damage that lingered long after the emergency passed. Liz Leone, who manages 52 apartments in Las Vegas, told Fortune the moratorium “almost forced me out of business,” adding that she lost about $250,000 and took out a $60,000 Small Business Administration loan “just to keep my nose above water.” Her account aligns with broader industry complaints that smaller landlords lacked the reserves and financing flexibility available to large real-estate groups, leaving them exposed when rent collections stalled and eviction remedies froze.
Industry surveys and court filings show why the case resonates across the rental market even though the settlement demand remains far below the sector’s claimed total losses. A survey cited by Bloomberg from the National Rental Home Council found that about half of small landlords reported missed rent payments after the moratorium period and roughly a third considered selling properties. In the litigation, the plaintiffs put total industry losses at $57 billion and said more than 10 million renters fell delinquent in the first four months of the ban, figures that frame the current $1.5 billion settlement effort as a partial recovery rather than a full accounting.
Housing advocates, however, argue the moratorium delivered a measurable public benefit and helped avert a deeper social and economic shock. Kathryn Leifheit, an assistant professor at the UCLA Fielding School of Public Health, told Associated Press that “eviction bans were a powerful intervention to keep people in their homes,” pointing to research published in JAMA Network Open that linked such policies to lower homelessness. That evidence remains central to the policy defense of the ban, even if it does not settle the constitutional question of whether private owners should absorb the cost of a national emergency response.
Tenant advocates also say landlords did not shoulder the burden alone because Congress approved billions in rental relief. Eric Dunn, director of litigation at the National Housing Law Project, told CNBC that landlords “were able to collect rent and sell properties” and said the $46.5 billion in emergency rental assistance “largely targeted to areas where landlords filed the most evictions before the pandemic.” That argument suggests any broad federal payout now could amount to double recovery in some cases, a point likely to matter if settlement talks move toward formulas for proving uncompensated losses property by property.
The aftereffects still shape leasing decisions and risk models across the apartment business. Rick Jones, vice chairman of Management Services Corporation, told Wall Street Journal that “most property owners now prefer to keep a unit vacant rather than risk a bad resident,” after his company absorbed roughly $230,000 in unpaid rent and dealt with a rise in fraudulent application documents. His comments reflect a wider shift in screening standards, deposit policies and occupancy strategy as landlords respond not only to past losses but also to the possibility that future emergencies could again delay removals and disrupt cash flow.
The Justice Department has not publicly detailed the status of negotiations, and a department spokesperson told multiple outlets that it does not comment on ongoing litigation. That leaves investors, housing operators and policy officials watching for the next court filing or any settlement framework that could define how compensation claims work when federal emergency measures restrict private property rights. Anna Kaplan, senior counsel at Bloomberg Law, said “the outcome will influence how federal agencies design emergency measures and how quickly they reimburse affected private-sector participants,” making this case a test not only for landlords but for the government’s crisis playbook in the next national emergency.
JBizNews Desk
