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Right to Counsel Should Not Be a Housing Stability Solution

As the country struggles with the ongoing economic impacts of COVID-19, policymakers continue to grapple with how to address the millions of renters struggling to keep up with rent payments. This has led to calls from renter advocates to continue both temporary pandemic eviction restrictions, such as eviction moratoriums, and implement other housing policies intended to create housing stability for low-income renters. Most of these are band-aids that fail to address the economic instability of low-to moderate-income renters, who are most likely to face eviction due to nonpayment of rent.

One of the policy solutions being suggested is right to counsel for renters in eviction court. Since New York City became the first jurisdiction in the nation to pass legislation guaranteeing legal representation for renters facing eviction in 2017, several other jurisdictions have followed suit in either passing their own laws or funding pilot programs.  Some of these programs have been funded using coronavirus relief funds from the federal government. So far in 2021, legislatures in Connecticut, Minnesota, Maryland, Nebraska, South Carolina and Washington have introduced their own right to counsel legislation.

Right to counsel programs typically serve renters making 200 percent of the Federal Poverty Level (FPL) and below. Households served are overwhelmingly rent burdened or severely rent burdened, meaning more than 30 percent, and for some more than 50 percent, of household income is used for rental housing costs. Proponents of right to counsel argue that the large imbalance in rates of representation between housing providers and renters in court places renters at a severe disadvantage. The main question appears to be one of fairness, and that addressing the unfair imbalance in representation rates will lead to significant amounts of renters prevailing in court and staying in their homes.

However, this is far from the case. It turns out right to counsel changes little of the ultimate outcome for low-income renters.  According to multiple pilot program progress reports analyzing case outcomes, some renters with representation avoid court ordered evictions and achieve pay and stay settlement agreements that allow them to remain in their apartment. However, most households are still forced to move as part of these agreements, with legal representation sometimes able to achieve positive financial or credit outcomes for renters and negotiate more time for them to move out.[1] [2]

That last point is crucial. Most renters are still forced to leave their unit regardless of access to counsel, which means significant time and money searching, finding and paying for the associated costs of moving to a new apartment. Given these households earn an annual income of 200 percent of FPL and below, this is likely to represent a significant financial burden. There is also no guarantee the new rental rate will be more affordable than the previous one, meaning a similar or increased chance of defaulting a second time. Furthermore, having to engage in the eviction process at all comes at the expense of wages, as renters are forced to forgo working hours to attend hearings or pretrial mediation conferences and lose out on income. Wouldn’t these funds be better spent on rental assistance?

Alternatives to Representation

Instead of working to create a universal right to counsel for renters, policymakers should focus on solutions that target the root cause of the problem. Public intervention strategies that direct funding toward a combination of emergency rental assistance and tenant-based housing subsidies have a greater overall benefit on housing outcomes.

Statistics and cost metrics from the 2017 Sargent Shriver Civil Counsel Act Evaluation show how earlier public intervention would be more effective than implementing right to counsel programs. Unfortunately, the more recent 2020 report does not include program costs. The act itself was passed in California in 2009 and provides grant funding for legal representation and improved court services to low-income parties for various legal issues, including housing. The evaluation looked at housing programs from six counties in the state that received housing program grants from October 2011 through October 2015, including Kern, Los Angeles, Sacramento, San Diego, Santa Barbara and Yolo. Nearly all cases analyzed involved a demand for past due rent or holdover rent, and forfeiture of the lease agreement.

Looking specifically at San Diego as an example, the pilot program costs in Fiscal Year 2014 totaled $1.62 million. During that year, the program provided representation for 1,280 eviction cases, resulting in a cost per case of $1,325. The report also estimates that it cost $2,850 for a household to secure a new rental unit, which occurred in three quarters of cases in the Shriver Report’s randomized case assignment outcome assessment. That equates to about $2.74 million in additional costs borne exclusively by renters who still had to move as part of settlement agreements.

As an alternative to funding legal representation, the city could have funded emergency rental assistance for every household in FY14 to cover their rental debt before the matter ever made it to eviction court. This would have cost about $1.2 million and avoided renters having to pay the cost to move into a new unit and protects housing providers and renters’ constitutional right to access the court system through the established process to adjudicate landlord and tenant disputes. Connecting renters to assistance resources before initial default notices would be an efficient way to address rental arrearages and prevent displacement.

Using the same data, one can roughly estimate how much it would cost per household to supply a renter with a tenant-based housing voucher. Voucher programs require households to put only 30 percent of their income toward rent, subsidizing the remaining cost. The 30 percent income benchmark is the standard used by HUD to determine if the cost of housing is affordable to a renter. Using the above income and rental statistics, the cost of subsidizing the median household served by Shriver housing programs in San Diego for one year would be $6,351.60.[4] That is much more expensive than either providing legal representation or rental assistance, but it would create durable housing stability for renters by reducing their housing costs and significantly reducing the likelihood of future homelessness. This in turn would drastically reduce homeless shelter costs, a downstream benefit often attributed to right to counsel programs.[5]

The proponents of right to counsel claim that universal access to legal representation should be the implementation goal of policymakers to ensure housing stability of low-income renters. However, as the rough calculations above show, the cost to provide emergency rental assistance is similar and avoids forcing renters to come up with upfront costs for new housing arrangements, while tenant-based subsidies cost more but create durable housing stability. Policymakers should avoid the band-aid approach of funding legal representation for renters in eviction court and instead pursue a blend of funding for tenant-based housing subsidies and emergency rental assistance. These policies in tandem would mitigate the consequences of eviction for a greater proportion of renters and bolster housing stability in communities across the country.

For more information about eviction policy, visit NAA's policy issue page or contact Alex Rossello, NAA's Manager of Public Policy. 

 

[3] Calculation based on median rent of $950 for San Diego renters served by the Shriver Program in FY14, assumption each renter is behind by one month’s rent at the time rental assistance is provided.

[4] Calculation based on median household income of $960 for San Diego Renters served by the Shriver Program in FY14.

[5] This is an argument often made by Stout, a global investment bank and advisory firm often retained by legal aid and right to counsel advocacy groups to produce economic impact analysis of right to counsel programs.