Legislative Updates, National Association of REALTORS®
by REI INK Admin
In a June 6, 2025, story reported by Reuters, a U.S. federal appeals court ruled that the United States must face potentially billions of dollars in legal claims over a temporary ban on residential evictions during the COVID pandemic that affected millions of landlords. The case is Darby Development Company Inc. et al v. United States.
The Washington, D.C.-based U.S. Court of Appeals for the Federal Circuit in a 7-3 decision rejected the government’s bid to overturn a decision by a panel of judges last year that refused to dismiss claims from landlords seeking compensation over the eviction moratorium.
The U.S. Centers for Disease Control and Prevention (CDC) in September 2020 issued a nationwide order halting residential evictions after the expiration of an earlier 120-day directive by Congress. The agency’s order, which lasted about a year, focused on combating the spread of the coronavirus.
Reuters reported the court ruling could spur the United States to ask the U.S. Supreme Court to intervene. Damages have been estimated at tens of billions of dollars, as rental property owners were blocked from evicting people who were not paying rent.
The Justice Department and a lawyer for the plaintiffs did not immediately respond to requests for comment.
Residential rental property owners sued over the CDC moratorium in Federal Claims court, seeking compensation under the U.S. Constitution’s 5th Amendment “takings” clause. They argued the government had taken their property for public use.
The moratorium was in place until August 2021, when the U.S. Supreme Court ended the Biden administration policy.
The National Association of Realtors (NAR), which was not a party to the lawsuit, in a statement called the appeals court’s Friday order “another important win for property rights.”
“Property owners deserve the opportunity to be heard and to seek fair compensation when government action effectively deprives them of use and income from their property,” said Shannon McGahn, the realtor group’s chief
advocacy officer.
National Association of REALTORS®
Two new studies commissioned by the NAR reveal that a capital gains tax cliff is coming that will hit middle-class homeowners hard. The studies uncover the urgent need to modernize the federal capital gains exclusion for the sale of a primary residence — an outdated policy that’s increasingly locking up the housing market and discouraging mobility.
Homeowners are facing a looming tax penalty simply for staying in their homes too long. The federal capital gains exclusion — capped at $250K for single filers and $500K for married couples — has never been adjusted for inflation. These outdated thresholds are already distorting the housing market and locking up inventory, and it is getting worse every year.
The NAR-commissioned studies found that:
» 34% of homeowners today (29 million) could already exceed the $250K capital gains exclusion cap for single filers.
» 10% (8 million) have potential gains above the $500K threshold for married couples filing jointly.
» By 2030, 56% of homeowners (47 million) are projected to potentially exceed the $250K threshold — and nearly 23% (20 million) could surpass $500K.
» By 2035, nearly 70% (59 million) of homeowners could be over $250K in equity and 38% over the $500K cap.
» Eight states could have more than 40% of owners above the $500K cap by 2030 and 20 states by 2035.
As a remedy, the NAR supports the More Homes on the Market Act. The bipartisan legislation would double the capital gains exclusion to $500K for individuals and $1M for married couples, adjust the thresholds close to where they would be if indexed to inflation since 1997, and help unlock millions of homes for move-up buyers and first-time purchasers alike.
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