Rental Assistance Payouts May Be Speeding Up, But Victory Over Mass Evictions Is Not Assured

Distribution of federal Emergency Rental Assistance funding has finally picked up speed in the six weeks since the Supreme Court struck down the Centers for Disease Control and Prevention’s second eviction moratorium, fueling optimism from some — though by no means all — that the feared wave of evictions might have been successfully avoided.

Gene Sperling, the man President Joe Biden tasked with overseeing the distribution of funds from the American Rescue Plan to cities and states, said that the acceleration of ERA payments to tenants was key to keeping evictions from spiking in an interview with the Associated Press in early October.

“These numbers are still early, uncertain and there is likely additional pain and hardship not showing up in these reports,” Sperling told the AP. “But what is out so far is certainly better than anyone’s previous best-case scenario for the month after the moratorium.”

Despite Sperling's caveats, not everyone is in agreement with his conclusion. Whatever data Sperling used to conclude evictions have not spiked is likely only based on formal eviction filings, and could not possibly represent an accurate picture of the environment for evictions nationwide, National Housing Law Project Director of Litigation Eric Dunn told Bisnow.

“I don’t know what people were expecting to see; if they were expecting lines out the courthouse door or something,” Dunn said. “I don’t really know what people are basing these declarations on.”

The most recent data from the Treasury Department found that in August, 420,000 households received ERA payments, up from 340,000 in July, and that $7.7B of the $25B budgeted for rental assistance in the stimulus bill passed in December has been distributed since January. States like Florida and South Carolina more than doubled their distribution rates from July to August, while New York went from disbursing $8.5M in July to $305M in August, the AP reports.

For states and cities that have accelerated their distribution in recent weeks, Treasury attributed much of the success to following the department’s recommendations for implementation. Those included, it said in an emailed statement, enlisting local nonprofit organizations to connect at-risk tenants to the program and accepting attestation of loss of income as opposed to documented proof.

“Throughout the pandemic, with the exception of a handful of weeks, we remain below trend in terms of eviction filings, which continues through September,” Federal Reserve Bank of Cleveland Economic Advisor Hal Martin said during a virtual panel discussion hosted by the Cleveland Fed Oct. 7. Martin's comments were based on data from 55 U.S. markets.

Also helping to stem the tide of evictions were more broad-based stimulus programs, like federal supplemental unemployment payouts and the Economic Impact Payments sent out to virtually everyone below a certain income level, said Federal Reserve Bank of Philadelphia Community Development Economic Advisor Davin Reed during the panel discussion.

“We’ve tried to tease out the contribution of each of these policies toward tamping down the rent debt,” he said.

There is logic behind the idea that for much of the coronavirus pandemic, landlords were incentivized to work with tenants more than they ever had before, knowing it would likely be more difficult to find new tenants to backfill those units, Reed said. As the ERA payments began rolling out, landlords were further incentivized to avoid eviction, many of them trusting that they would be made whole.

“There was more cooperation during a recession than there may have been outside of a recession,” Reed said. “If you’re staring down an apartment being vacant for months to a year, you wouldn’t necessarily be as eager to get tenants out.”

Dunn, however, countered that using eviction filing data taken from only 55 markets to make conclusions about eviction rates was problematic as was ascribing causes to those conclusions. He pointed out the CDC explicitly allowed landlords to file for eviction under its moratoriums. That means in local jurisdictions where filings were allowed, the moratorium being lifted allowed for eviction judgments to be reached and lockouts carried out without any additional data points showing up in the Fed study.

“How do you make accurate explanations for why something is happening when we don’t even know if it’s happening?” Dunn said. "It’s all conjecture, and it’s inappropriate.”

In the next few weeks, some jurisdictions that have not distributed enough ERA funds to meet the Treasury Department’s thresholds will have their allocations sent to places that have demonstrated more effectiveness and still have unmet needs. Some jurisdictions have proactively asked the Treasury to take back funds allocated to them, underscoring how variable the situation is for tenants at risk of eviction, Dunn said.

In weekly data gathered by the nonprofit Eviction Lab, states like Delaware and Indiana and cities like Cleveland, Philadelphia and Tampa have seen eviction filings remain flat since the CDC’s second moratorium was overturned. But in cities like St. Louis, Kansas City and Houston, eviction filings did indeed rise sharply over the same period.

“A lot of organizations like legal aid or social service programs have been working day in and day out for a year and a half to try and stop evictions,” Dunn said. “We certainly haven’t had the level of success we hoped to have when we started out, but it’s made a difference. So it’s sort of insulting to the housing advocates out there working to keep people housed to just say that rental assistance is keeping people housed.

"It’s a lot of work to cope with this massive crisis, and the idea that it’s a magic wand is pretty frustrating when they don’t have any data to back it up.”