Eviction Moratoriums Helped During Covid, But There’s A Better Way To Cut Homelessness

What if moratoriums and tenant protection programs put in place to help renters facing eviction actually increase homelessness rather than prevent it?

That's one of the thorny and counterintuitive questions raised in a new academic paper about how society addresses the housing crisis. The Welfare Effects of Eviction and Homelessness Policies, published late last year, was written by Stanford University Ph.D. candidate Boaz Abramson using detailed data from San Diego to measure the impact of all-out eviction moratoriums on homelessness like those introduced during the pandemic. The paper also examined the longer-term effects of measures like right-to-counsel legislation to slow and sometimes reverse the eviction process.

Abramson’s study found that far from helping, right-to-counsel laws drive up rents for lower-income renters to such levels that homelessness actually increases by 15%.

But other measures cut the opposite direction. Providing $400 a month in direct rental assistance for lower-income renters reduces homelessness by 45% and evictions by 75%, Abramson found, and it pays for itself: The cost of the rental assistance is lower than the cost of paying for services needed to help those who have become homeless, like shelters and medical assistance.

“It would lower taxes,” Abramson told Bisnow.

The problem of homelessness is complex and multifaceted, and there is no silver bullet. But Abramson’s findings point to the fact the moral and ideological beliefs of both the political left and right could be hindering the process of combating an issue both sides want to fix.

Abramson, an Israeli, said he was prompted to analyze the issue of homelessness and its causes when he first came to study at Stanford and was taken aback by the high numbers of homeless people on the streets of San Francisco. 

His paper found that the moratoriums put in place as a result of the pandemic were beneficial for tenants, allowing those who perhaps lost their job temporarily during lockdowns to stay in their homes and resume paying rent when the economy recovered.

“It also allowed people to remain in their homes, which reduced the spread of the virus,” city of Dallas Policy Manager Priscylla Bento agreed. 

But longer-term, policies like the right to counsel had a consequence not intended by lawmakers.

“These policies delay evictions, but they very rarely avoid evictions altogether,” Abramson said. This potential for a delay led landlords to increase the rents they charged, essentially putting in place a rent premium to cover the income they might lose if a tenant was not paying rent yet remained in the property. 

As a result, he said, housing became more expensive for those at the very bottom of the ladder, and homelessness increased, because a percentage of these tenants could not afford to rent in the first place. 

Policies like the right to counsel also fundamentally misunderstand the common causes of homelessness, the paper argued. The most common causes are job losses and divorce, Abramson said in the paper, which he termed “persistent” shocks to income, things that happen all the time and can’t be avoided. When someone has lost their job or their household income has halved because of divorce or separation, it argues, right to counsel doesn’t do much good. 

“Right to counsel might delay the eviction process by, on average, a couple of weeks, and it is unlikely a low-skilled worker might have found a new job in that time,” Abramson said. 

Much more effective in combating homelessness, the paper said, is direct rental assistance. The study modeled the impact of giving low-income households $400 in direct rent assistance, resulting in that 45% drop in homelessness and 75% fall in evictions.

“It makes sense to provide assistance to people so that they don’t default on their rent in the first place, rather than stepping in to help them once they have defaulted,” Abramson said. 

The policy has a positive financial impact as well as an impact on improving welfare and reducing homelessness. In the model Abramson created, rental assistance would cost the local authority $82M and save it $90M in the cost of assistance for the homeless.

This is where things head into the realm of moral and ideological questions. Abramson’s is of course just a single study, and subsequent studies may provide different results. But, he said his findings were part of a long line of studies demonstrating that preventing problems in areas like homelessness or healthcare is a lot cheaper than curing them after the fact.

So why is there such pushback against providing upfront assistance?

“People have a subjective view that rental assistance is more expensive, or has other impacts,” Abramson said. “But there is empirical evidence that mean-tested rental assistance doesn’t reduce the labor supply or savings rates.”

The idea that if you give people money to make rent, they won’t work as hard or save as much is false, he said. 

Author Malcolm Gladwell, who has weighed in on the paper, argued as far back as 2006 that as a society, we are loathe to give homeless people cash or other forms of direct housing assistance because of squeamishness about whether they deserved the money or whether it had been earned. In an article called Million-Dollar Murray, he highlighted how local authorities had spent more than $1M in assistance for a single homeless citizen over a period of about a decade, when it would have been much cheaper to just rent him an apartment. 

“People are not homeless because of a lack of access to quality legal representation or drug treatment programs or because they like living in cardboard boxes,” Gladwell wrote in the article about Abramson’s paper. “They are homeless because housing is too expensive in America, there isn’t enough of it, and lots of people in this country don’t have enough money to make rent.

“That’s what the Abramson paper is really saying. We can tie ourselves in knots making the lives of landlords difficult or recruiting carloads of lawyers. Or we can write a check to someone who really needs the money.”

Abramson’s findings raise ethical questions in other areas as well. Not every person who becomes homeless does so because they lost a job or separated from a partner.

“Homelessness is a complex issue, and there are many factors involved, like drugs, family issues or health issues,” the city of Dallas’ Bento said.

And not every eviction is a result of a tenant defaulting on rent. In many cases, tenants are being illegally evicted by landlords, often on spurious grounds. Abramson himself said this is the case, especially in cities like New York, where rents have risen quickly historically, and landlords might illegally evict a tenant to bring in someone paying more. 

In these instances, while legislation like right-to-counsel might exacerbate homelessness, it also provides protection to tenants who are being treated unfairly. 

“At some level we’re talking about justice,” National Housing Law Project Director of Litigation Eric Dunn said. “Right or wrong, if someone didn’t violate their lease then they have a right to their day in court. If that increases the cost of rent, then so be it.”

Gladwell, in his article on Abramson’s paper, takes something of an opposite view.

“Providing vulnerable tenants with legal assistance seems like common sense to someone with liberal leanings. [And I count myself as someone with liberal leanings!],” he said. “But Abramson’s point is that this isn’t an ideological question. It’s an empirical question.”

Abramson said that he had been contacted by some landlord advocacy groups who wanted more information about the impact of eviction moratoriums, but no local authorities looking for information about the cost of rental assistance versus homelessness services.

Ideology and empiricism seem likely to continue fighting it out for some time yet.