The Looming Eviction Crisis

10 min read

In response to the Covid-19 pandemic, both the CARES Act (Coronavirus Aid, Relief, and Economic Security) and a Centers for Disease Control and Prevention (CDC)order, imposed moratoriums on eviction from rental housing under most circumstances, at least until December 31, 2020. CDC’s guidance specifically states that preventing evictions “can be an effective public health measure utilized to prevent the spread of [Covid-19],” and that “housing stability helps protect public health because homelessness increases the likelihood of individuals moving into congregate settings, such as homeless shelters, which then puts individuals at higher risk [of] Covid-19.”

As admirable as these governmental actions are, they are both stopgap measures that do not address the fundamental and structural problem. There is an immense eviction crisis looming in the United States and any possible solution will require equally immense cooperation, creativity, compromise and legislative leadership.

Princeton University’s Eviction Lab (See: “The Complexity of Eviction: Matthew Desmond Opens Princeton Lab to Seek Solutions” in the September 2020 Tax Credit Advisor) has been studying the effects of eviction since long before the current epidemic.

Alieza Durana is the lab’s narrative charge liaison. “An eviction is a traumatic event, not simply at the individual level, but also to our families and communities across the United States,” she states. “An eviction can cause a family to experience a decline in mental and physical wellbeing, ruined credit, homelessness, job loss, to name a few of its devastating effects. Nearly three decades of rising rents and wage stagnation, coupled with centuries of systematic discrimination within our housing market and policies, have given rise to a housing crisis that pre-dates Covid-19. In 2016, we saw 3.7 million eviction filings in our data, or seven eviction filings per minute, when unemployment was under five percent. And our data only cover court filings; they do not include experiences of illegal or informal evictions, which we estimate occur at double the rate of legal eviction filings. The current public health and economic crisis is already deepening inequalities felt across our society and has the potential to increase experiences of eviction and homelessness in the absence of immediate and meaningful policy measures.”

A report cited by the National Council of State Housing Agencies (NCSHA) estimated that between 10 and 14 million renter households—home to 23 to 34 million people—were behind on their rent by $12 to $14 million as of September 14.

Sarah Saadian is vice president of public policy for the National Low Income Housing Coalition. “From our perspective,” she says, “the moratorium is really necessary, but not enough on its own – we need rental assistance. Renters are accumulating rental debt that they can never afford to pay back, which is just as bad for individuals, landlords and public health. If people are evicted, it will be harder for our country to contain the Coronavirus. We estimate up to 30 to 40 million renters are in danger of losing their homes by the end of the year. At least $100 billion in rental assistance is needed over the next 12 months. Keeping families stably housed is a smart thing to do from a lot of perspectives.”

NH&RA has taken an active role in the public dialogue, with president Thom Amdur issuing the following statement: “We appreciate the CDC’s attempt to keep people in their homes and help prevent the spread of Covid-19. However, without immediate Congressional action to fund supplemental assistance for renters and landlords, this unilateral executive action is an unfunded mandate that simply puts a band-aid on a gaping wound. Immediate Congressional action is necessary to protect the health and financial well-being of millions of renters and ensure the long-term stability of the nation’s apartment industry. The only entity with the resources and scale poised to address this crisis is Congress. The mounting backlog of unpaid rent and bills grows every day that they fail to act.”

Jeffrey L. Kittle is president and CEO of Herman & Kittle Properties, Inc. of Indianapolis, which has developed and managed more than 155 multifamily properties providing homes for 35,000 families spread across 20 states. In many ways, he is typical of the landlords dealing with the current crisis. “It’s a big issue for us,” he says. “We’ve been watching it closely since March or April and we have grave concern for the families who live in our properties and concern for the viability of our business. We are thankful for the CARES Act and have been able to sign up 750 families/residents out of our 17,500 apartment home community for COVID-related rental subsidies. Unemployment is still high and many of our families are in service sector jobs that are not coming back. We do everything we can to keep our residents, but we have hundreds of partners and vendors, and we have to pay our own bills.

“This has taken a tremendous emotional toll on me and our operations team and managers. It’s heartbreaking and difficult when families avoid our managers because they can’t pay. We have calls three times a week to discuss new ideas, and our managers get a lot of satisfaction when we can get our residents lined up with subsidies.”

“A lot of landlords are doing everything they can to keep people housed, when housing is so important and homelessness leads to so many other problems,” says Paula Prahl, vice president of public affairs for Dominium, Inc., a large developer and manager of affordable housing, headquartered in Plymouth, MN. “We look at our portfolio all the time. Rent payments are definitely going down, which is a risk to the system and to tenants who are paying rent. Properties still have to pay lenders, staff, insurance and taxes. Every action has a reaction, and there isn’t one part of the system that can absorb the issue. For example, there has been no moratorium on the collection of property taxes; municipalities are facing a problem, too. No one is evil and no one is good in this situation. We’re all just looking for a solution. I think we all have to drop our kneejerk political reactions and come together to solve this. There’s no way someone who’s six months behind in rent is going to be able to pay it all. It does need a more coordinated solution.”

In many, if not most cases, landlords are doing their best to work with tenants on their inability to pay rent. “One of the things we did at the very beginning was to turn our site staff into problem solvers,” Prahl explains. “We work hard to help tenants who are willing to work with us, providing support and information on programs that might be available to help. One of the things we try to gauge is the attitude and willingness to pay. When we are able to confront the fraction of tenants who have not been willing to work with us at all, I’d say one third either pay in full or actively seek out a payment plan with us, which we have been doing throughout the pandemic. Another third just leave, and we let them go without penalty. And another third don’t respond to us at all.  We’ve been happy that this is such a small fraction of the overall tenant population.”

The rent problem is complicated by the fact that much of the subsidy is administered through states or localities. “We deal with 20 states and each one is different,” Kittle says. “The process can be simple or complex. Kansas is very fast. Illinois is taking more time.

“Early on, there were some lender forbearance programs, and we explored them. But that’s a backstop, not a long-term solution. We’re working with positive intent, offering payment plans, and that’s been helpful to certain families. Eviction is always a last resort, which also costs us a lot of money. If we can possibly keep a family, that’s definitely what we want to do.”

On November 12, 53 housing owners and operators in Massachusetts signed an “Eviction Diversion Pledge” to keep more than 57,000 tenants and families safely housed. “As the owner of over 18,000 affordable and mixed-income homes, with 9,000 in the Commonwealth, we helped to develop this pledge to demonstrate our commitment to keeping tenants stably housed during this time of uncertainty and to encourage other owners across the state of Massachusetts to join us,” said Dara Kovel, CEO of Beacon Communities. “Housing is a right—not a privilege—and stable, affordable housing is crucial to the health and well-being of our communities.”

The pledge includes general agreement to: abide by and support the CDC moratorium; proactively engage with residents to create payment plans; support and accept rental assistance payments; promote rent adjustments for Section 8 and Massachusetts Rental Voucher Program families; and encourage structured and interactive mediation.

Despite the various state initiatives, there is a growing consensus in the affordable housing community that the challenge is so pervasive that only federal intervention will avert the crisis, as it did with the automobile industry following the 2008-09 recession. “We are tracking about 450 state and local assistance programs,” Saadian says, “and they don’t have anywhere near the resources. A third have already run out of funds. Only the federal government can fill the gap. We know that Republicans are open to providing mortgage and rent relief. But the issue is, can an overall deal be reached and how much funds can be set aside to address the needs of renters? Now that the election is over, everyone should be reaching out to members of Congress and putting pressure on them.” She specifically mentions Senate majority leader Mitch McConnell (R-KY) and Senate Banking, Housing and Urban Affairs Committee chairman Mike Crapo (R-ID). “They need to hear from folks!”

Saadian proposes that this is such a large part of our national economy that the sooner both renters and landlords can be made financially whole following the pandemic, the sooner and stronger the economy will come back. She comments, “Ten years ago we were working on a financial crisis and I thought the lesson we learned is that financial relief was needed earlier. The lowest- income people and the smallest landlords are going to be the hardest hit. It’s really irresponsible that Congress has not been able to reach a deal yet. The takeaway is the sense of urgency here. We’re not in normal times, so we need extraordinary action.”

Says Prahl, “No one wants anyone to be homeless during a pandemic. No one wants landlords to bankrupt during a pandemic. No one wants vendors not to be paid and have to lay off workers during a pandemic. So, let’s all come together, put on our thinking caps and try to figure this out.”

Story Contacts:
Thom Amdur, [email protected]
Alieza Durana, [email protected]
Jeffrey Kittle, [email protected]
Dara Kovel, [email protected]
Paula Prahl, [email protected]
Sarah Saadian, [email protected]