*Victoria Skinner
In March 2020, COVID-19 became a household name in the United States.[1] Due to the contagious nature of the virus, state governments took unprecedented action, issuing stay-at-home orders and mandating remote learning.[2] The federal government offered relief in the form of stimulus payments, increased unemployment benefits, eviction moratoriums, and foreclosure moratoriums on federally backed mortgages.[3] States instituted their own foreclosure and eviction moratoriums to protect landlords and renters.[4] A recent study demonstrated that a higher percentage of Americans relied on government assistance in 2020 than at any other point over the last twenty years.[5]
Eighteen months later, many states, including Maryland, chose to end their state-of-emergency declarations, foreclosure moratoriums, and eviction moratoriums.[6] Although the CDC instituted a federal eviction moratorium in September 2020, the Supreme Court recently struck it down as an overreach of federal power.[7] This ruling means evictions for tenants who are behind on rent and foreclosures for landlords who are behind on mortgages.
The predicted wave of evictions and foreclosures is breaking, and it will likely have detrimental effects on vulnerable and blighted communities in Maryland.[8] The Maryland House of Delegates has called on Governor Hogan to extend the state of emergency, but Governor Hogan has declined to do so.[9] Without any federal or local protections, it is likely that families will be displaced and the number of vacant properties will rise within the coming months. Therefore, Maryland must take action to counteract the risk of blight.
II. Public and Private Solutions to Property Vacancies
While the State of Maryland has the right to take private property through eminent domain, there are constitutional limits. To comport with the takings clause of the Fifth Amendment, the taken property must be used for the public good and the previous owner must be paid “just compensation.”[10]
Eminent domain could offer benefits for homeowners and small landlords facing foreclosure. First, it could save the landlord from foreclosure by providing a way to leave the property free and clear. Since 2020, housing prices have appreciated rapidly.[11] Because of this rapid appreciation, many landlords likely owe less than the current value of their property, even if they cannot pay their mortgages. For landlords looking to sell, receiving just compensation for a rental property would mitigate further loss.[12] Second, eminent domain allows local governments to repurpose the land for a purpose that benefits the community, which may counteract blight in the long term.[13]
Despite these benefits, eminent domain also has drawbacks. First, it cannot be used piecemeal, as it may only be used to support a public use plan.[14] Therefore, the State may have to take property from homeowners who are not at risk of foreclosure.[15] Second, public use plans take years to develop and implement.[16] For these reasons, eminent domain alone would not address the immediate economic fallout of foreclosures and vacancies. If Governor Hogan wishes to use eminent domain as a strategy to mitigate the harm resulting from mass foreclosures, developers would need to work quickly to plan projects that address the needs of affected communities.
If Governor Hogan chooses not to intercede, foreclosed properties will likely be bought by investors.[17] However, if evicted renters and foreclosed landlords cannot afford to buy or rent, vacancies will remain, perpetuating the problem of blight.
III. Protecting Marylanders through Access to Legal Assistance
Through the passage of H.B. 0018, the Maryland General Assembly has provided some relief to renters in the form of access to legal representation.[18] H.B. 0018 takes effect on October 1, 2021. This sweeping legislation allows Marylanders access to counsel during eviction proceedings and amends multiple sections of the Maryland Real Property Code by establishing new requirements to initiate eviction proceedings.[19] H.B. 0018 establishes an Access to Counsel in Evictions Task Force to evaluate and improve access to legal services for renters.[20] While these changes provide welcome relief for renters facing eviction, they do not provide solutions for landlords and homeowners who face foreclosure.
IV. Conclusion
Maryland is on the precipice of an eviction and foreclosure crisis that will have detrimental short-term effects for renters, homeowners, and landlords unable to pay for housing. It remains to be seen whether the long-term fallout of this crisis will exacerbate blight in economically depressed areas or create blight in areas that have weathered previous economic storms. While Maryland’s expansion of access to legal assistance for renters is helpful, it alone will not solve the problem. Maryland can mitigate the fallout from evictions and foreclosures by expanding access to legal assistance to landlords facing foreclosure and reclaiming properties facing foreclosure through eminent domain.
*Victoria Skinner is a third-year evening student at the University of Baltimore School of Law, where she is a staff editor for Law Review. Victoria served as a research assistant for Professor Jamie Abrams and worked as a summer extern for Hearns Law Group, LLC. Victoria was inducted into Royal Graham Shannonhouse III Honors Society. This upcoming summer, Victoria will be a summer associate with Miles and Stockbridge P.C.
[1] Derrick Bryson Taylor, A Timeline of the Coronavirus Pandemic, N.Y. Times (Mar. 17, 2021), https://www.nytimes.com/article/coronavirus-timeline.html.
[2] See, e.g., Exec. Dep’t of Md., Gatherings, Stay at Home Order No. 20-03-30-01 (Mar. 30, 2020), https://governor.maryland.gov/wp-content/uploads/2020/03/Gatherings-FOURTH-AMENDED-3.30.20.pdf; Yvonne Wenger & Pamela Wood, Gov. Hogan Issues Stay-at-Home Order for Maryland to Stop Spread of the Coronavirus, The Baltimore Sun (Mar. 20, 2020, 8:55 PM), https://www.baltimoresun.com/coronavirus/bs-md-stay-at-home-hogan-covid-19-20200330-pmid22rvirdwbppx4xpgjadoim-story.html.
[3] Coronavirus State and Local Fiscal Recovery Funds, 86 Fed. Reg. 26,786 (May 17, 2021) (to be codified at 31 C.F.R. pt. 35) (allocating funds to state, local, and tribal governments); Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID–19, 86 Fed. Reg. 16,731 (Mar. 31, 2021); Protections for Borrowers Affected by the COVID–19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X, 86 Fed. Reg. 34,848 (June 30, 2021) (to be codified at 12 C.F.R. pt. 1024).
[4] See Exec. Dep’t of Md., Evictions, Repossessions, Foreclosures Order No. 20-12-17-02 (Dec. 17, 2020) https://governor.maryland.gov/wp-content/uploads/2020/12/Evictions-Repossessions-Foreclosures-3d-AMENDED-12.17.20.pdf; Horus Alas, 16 States and Washington, D.C., Keep Eviction Moratoria in Effect, U.S. News (Oct. 13, 2020, 2:12 PM), https://www.usnews.com/news/best-states/articles/2020-10-13/16-states-and-washington-dc-protect-renters-during-pandemic.
[5] Robert A. Moffit & James P. Ziliak, COVID-19 and the US Safety Net, 41 Fiscal Stud.: J. Applied Pub. Econ. 515, 535 (2020).
[6] E.g., Brian E. Frosh, Off. of the Att’y Gen., Consumer Alert – Maryland’s Moratorium on Residential Evictions Set to Expire August 15, 2021 (n.d.) https://www.marylandattorneygeneral.gov/press/2021/070121CA.pdf.
[7] Ala. Ass’n of Realtors v. Dep’t Health & Hum. Serv., No. 21A23, slip op. at 1 (U.S. Aug. 26, 2021) (per curiam); Pete Williams, Supreme Court Blocks Biden Administration’s Eviction Moratorium, NBC News (Aug. 26, 2021, 11:23 PM), https://www.nbcnews.com/politics/supreme-court/supreme-court-blocks-biden-administration-s-eviction-moratorium-n1277765.
[8] See Jonathan M. Purver, Annotation, What Constitutes “Blighted Area” Within Urban Renewal and Redevelopment Statutes, 45 A.L.R.3d 1096 (“[T]he courts have broadly and liberally interpreted the phrase ‘blighted area’ to encompass areas which were deteriorating and which were in the process of becoming slums, as well as those areas already so deteriorated as to be useless.”); see generally Dan Lampariello, Fighting Blight in Baltimore Remains a Complex Issue, FOX 45 News (Jan. 22, 2021), https://foxbaltimore.com/news/local/fighting-blight-in-baltimore-remains-a-complex-issue (discussing vacant properties in Baltimore City and the connection to blight).
[9] Maryland Delegates Urge Gov. Hogan to Extend State of Emergency, CBS Baltimore (Aug. 13, 2021, 3:40 PM), https://baltimore.cbslocal.com/2021/08/13/maryland-delegates-demand-gov-hogan-extend-state-of-emergency/.
[10] See Md. Code Real Prop. §§ 12-101–12-105.1; Md. Const. art III, § 40.
[11] See Don Layton, The Extraordinary and Unexpected Pandemic Increase in House Prices: Causes and Implications, Joint Ctr. Hous. Stud. Harv. Univ. (Jan. 7, 2021), https://www.jchs.harvard.edu/blog/extraordinary-and-unexpected-pandemic-increase-house-prices-causes-and-implications.
[12] See generally Diana Olick, Some landlords sell properties as CDC extends eviction ban, CNBC, https://www.cnbc.com/2021/03/29/covid-eviction-ban-forces-some-landlords-to-sell-properties.html (Mar. 30, 2021, 1:31 PM) (explaining that landlords who cannot make mortgage payments are resorting to selling properties).
[13] See Berman v. Parker, 348 U.S. 26, 34 (1954).
[14] See id.
[15] See Kelo v. City of New London, 545 U.S. 469, 475 (2005).
[16] See Jon C. Teaford, Urban Renewal and Its Aftermath, 11 Hous. Pol’y Debate 443, 448 (2000) (“[T]he typical urban renewal project required more than four years to plan and six to nine additional years to execute.”).
[17] See Elena Botella, Investment Firms Aren’t Buying All the Houses. But They Are Buying the Most Important Ones, Slate: Moneybox (June 19, 2021, 5:45 AM), https://slate.com/business/2021/06/blackrock-invitation-houses-investment-firms-real-estate.html.
[18] H.B. 18, 2021 Leg. 442d Sess. (Md. 2021).
[19] Id.
[20] Id.; see also Baltimore Law Associate Dean Schultz Named Chair of Maryland’s Access to Counsel in Evictions Task Force, Updates/ University of Baltimore School of Law (Aug. 17, 2021), https://ublawaccolades.wordpress.com/2021/08/17/baltimore-law-associate-dean-schultz-named-chair-of-marylands-access-to-counsel-in-evictions-task-force/.
University of Baltimore Law Review 