Well-meant Measure, Slow-motion Disaster
Ever since the first stay-at-home orders went out, I was worried that the eviction moratorium was only delaying the inevitable.
In normal times, if you lose your income and aren't able to pay your rent, you have to move out or be evicted. If you can't find someone who will take you in until you can secure a new source of income, you end up homeless.
But these were not normal times. The whole point of the stay-at-home order would be defeated if all the people who suddenly weren't able to go to work and earn a living suddenly had no home where they could stay. So it seemed to be reasonable that a temporary stay on evictions would keep people in their homes, off the streets and out of congregate housing such as homeless shelters.
However, this stay of evictions could not be accompanied by a remission of rent -- in the US it's a Constitutional issue. Most rental properties are privately owned, and the Fifth Amendment provides that no one shall be "deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." Thus the eviction moratorium was accompanied by a clear statement that rent continued to be owed and owing.
No doubt there were ne'er-do-wells who heard "eviction moratorium" and decided it meant they no longer needed to pay rent, and could stay for free. But it's probable that most of the tenants who didn't pay rent in April were people whose paychecks vanished in the closures of businesses deemed "non-essential." And given that most of them would be in the lower income brackets -- the white-collar office worker could keep working from home, but the janitor who had kept the office nice and shiny now no longer had a job or a paycheck -- they were far more likely to be living hand-to-mouth, with little or no savings to cushion the blow. Far from seeing the eviction moratorium as "ooh, I get to stay here for FREEEEEEEE," it's far more likely they regarded it as a lifeline thrown to them, something to buy them time until their employer's doors reopened (remember, the stay-at-home orders were originally presented as two weeks to "flatten the curve").
Except for one big problem -- if they don't have the rent when it's due because their income was taken away by the closures, they're sure not going to have it the day the moratorium expires. Just because their employer calls them back and they're working again, they still have that gap in an income that was probably just keeping up with their current expenses before the moratorium. The longer the day of reckoning is put off, the bigger the debt of back rent becomes. Even if they move out as soon as the moratorium is allowed to expire, they still owe all that back rent.
Not only has the eviction moratorium just postponed the point at which these people become homeless, it's also going to make it extremely difficult for them to re-home themselves in the future. Even if they leave before eviction proceedings begin against them, that pile of back rent is going to be a black mark on their permanent record for a long time. For many landlords, an eviction, unpaid back rent, or a bankruptcy is an automatic disqualification. That means a lot of these people are going to be trapped in precarious housing: extended-stay hotels, doubling up with family members who were able to keep a job, etc.
And the saddest thing is that a lot of this could've been prevented, and not necessarily by handing either tenants or landlords money. In fact, in their landmark book Scarcity: Why Having Too Little Means So Much, authors Sendhil Mullainathan and Eldar Shafir repeatedly show that simply handing poor people money doesn't solve the real problem, the scarcity-induced shortage of mental bandwidth, a problem that is faced by everyone who is struggling under scarcity, whether it be of time, money, calories, or whatever. The most effective way to help people struggling under scarcity is to help them build bandwidth so the "tunnel vision" effect of scarcity on the mind doesn't lead them to short-term solutions that make the problem worse in the long run.
Remember what I said earlier about the working poor who'd suddenly had their paychecks vanish seeing the eviction moratorium as a lifeline. Here we have people who have just been tossed into unknown territory, where they've lost their income and they're supposed to be staying at home rather than trying to find new work. They're scrambling to figure out how they're going to keep the bills paid, keep food on the table, etc, perhaps trying to figure out how to get unemployment when the systems for filing for it are crashing under the load. And then they hear the announcement of the rent moratorium, so in their tunnel vision they home in on the idea that the fear of immediate homelessness has been taken off the table. Now they can focus on figuring out the other necessities they need to keep happening.
It's possible that they simply didn't have enough mental bandwidth to register the "rent is still owed and owing," so it fell outside the scarcity tunnel, something they couldn't deal with right now. Or maybe they assumed that the moratorium would somehow automatically smooth things over with their landlords, so they'd be able to catch up once things straightened out.
So how could we go about helping them build more bandwidth? One place to start would be reaching out to landlords and asking them to reach out to tenants, rather than expecting the tenant to initiate the interaction. For a person who's suddenly lost their income amidst a frightening pandemic, having to go hat in hand to the landlord is scary, quite possibly too scary for someone who's already strapped not just financially, but mentally and emotionally as well. Perhaps federal and state agencies could provide model letters, scripts for telephone calls, etc. which would help make these contacts less confrontational toward people who are already stressed by the loss of the ability to meet their financial obligations, so they are less likely to clam up or otherwise respond in ways that are apt to be viewed as defensive rather than co-operative.
For instance, set up a series of model letters: the first one being a general one sent out a few days before rent is due, reminding everyone that rent is due, that failure to pay will generate a blot on one's record which will create long-term financial difficulties, but that in recognition of the extraordinary situation of the pandemic, the landlord wants to hear from people who will have difficulty making their payment, so that things can be worked out (perhaps making an exception to the no-partial-payments rule to allow a partial payment as a show of good faith, etc). A second letter could be sent only to people who don't pay or make contact, a few days after the due date, reminding the delinquent tenants that rent is owing, and that while they cannot be evicted for non-payment during the moratorium, it is still a blot on their record, and they need to come in ASAP to work out a payment plan so their future ability to rent housing will not be affected. The precise details could be tweaked for a given area, but the central idea is to make it clear that the landlord needs to hear from tenants, but is willing to work with them to get through this situation.
In normal times, if you lose your income and aren't able to pay your rent, you have to move out or be evicted. If you can't find someone who will take you in until you can secure a new source of income, you end up homeless.
But these were not normal times. The whole point of the stay-at-home order would be defeated if all the people who suddenly weren't able to go to work and earn a living suddenly had no home where they could stay. So it seemed to be reasonable that a temporary stay on evictions would keep people in their homes, off the streets and out of congregate housing such as homeless shelters.
However, this stay of evictions could not be accompanied by a remission of rent -- in the US it's a Constitutional issue. Most rental properties are privately owned, and the Fifth Amendment provides that no one shall be "deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." Thus the eviction moratorium was accompanied by a clear statement that rent continued to be owed and owing.
No doubt there were ne'er-do-wells who heard "eviction moratorium" and decided it meant they no longer needed to pay rent, and could stay for free. But it's probable that most of the tenants who didn't pay rent in April were people whose paychecks vanished in the closures of businesses deemed "non-essential." And given that most of them would be in the lower income brackets -- the white-collar office worker could keep working from home, but the janitor who had kept the office nice and shiny now no longer had a job or a paycheck -- they were far more likely to be living hand-to-mouth, with little or no savings to cushion the blow. Far from seeing the eviction moratorium as "ooh, I get to stay here for FREEEEEEEE," it's far more likely they regarded it as a lifeline thrown to them, something to buy them time until their employer's doors reopened (remember, the stay-at-home orders were originally presented as two weeks to "flatten the curve").
Except for one big problem -- if they don't have the rent when it's due because their income was taken away by the closures, they're sure not going to have it the day the moratorium expires. Just because their employer calls them back and they're working again, they still have that gap in an income that was probably just keeping up with their current expenses before the moratorium. The longer the day of reckoning is put off, the bigger the debt of back rent becomes. Even if they move out as soon as the moratorium is allowed to expire, they still owe all that back rent.
Not only has the eviction moratorium just postponed the point at which these people become homeless, it's also going to make it extremely difficult for them to re-home themselves in the future. Even if they leave before eviction proceedings begin against them, that pile of back rent is going to be a black mark on their permanent record for a long time. For many landlords, an eviction, unpaid back rent, or a bankruptcy is an automatic disqualification. That means a lot of these people are going to be trapped in precarious housing: extended-stay hotels, doubling up with family members who were able to keep a job, etc.
And the saddest thing is that a lot of this could've been prevented, and not necessarily by handing either tenants or landlords money. In fact, in their landmark book Scarcity: Why Having Too Little Means So Much, authors Sendhil Mullainathan and Eldar Shafir repeatedly show that simply handing poor people money doesn't solve the real problem, the scarcity-induced shortage of mental bandwidth, a problem that is faced by everyone who is struggling under scarcity, whether it be of time, money, calories, or whatever. The most effective way to help people struggling under scarcity is to help them build bandwidth so the "tunnel vision" effect of scarcity on the mind doesn't lead them to short-term solutions that make the problem worse in the long run.
Remember what I said earlier about the working poor who'd suddenly had their paychecks vanish seeing the eviction moratorium as a lifeline. Here we have people who have just been tossed into unknown territory, where they've lost their income and they're supposed to be staying at home rather than trying to find new work. They're scrambling to figure out how they're going to keep the bills paid, keep food on the table, etc, perhaps trying to figure out how to get unemployment when the systems for filing for it are crashing under the load. And then they hear the announcement of the rent moratorium, so in their tunnel vision they home in on the idea that the fear of immediate homelessness has been taken off the table. Now they can focus on figuring out the other necessities they need to keep happening.
It's possible that they simply didn't have enough mental bandwidth to register the "rent is still owed and owing," so it fell outside the scarcity tunnel, something they couldn't deal with right now. Or maybe they assumed that the moratorium would somehow automatically smooth things over with their landlords, so they'd be able to catch up once things straightened out.
So how could we go about helping them build more bandwidth? One place to start would be reaching out to landlords and asking them to reach out to tenants, rather than expecting the tenant to initiate the interaction. For a person who's suddenly lost their income amidst a frightening pandemic, having to go hat in hand to the landlord is scary, quite possibly too scary for someone who's already strapped not just financially, but mentally and emotionally as well. Perhaps federal and state agencies could provide model letters, scripts for telephone calls, etc. which would help make these contacts less confrontational toward people who are already stressed by the loss of the ability to meet their financial obligations, so they are less likely to clam up or otherwise respond in ways that are apt to be viewed as defensive rather than co-operative.
For instance, set up a series of model letters: the first one being a general one sent out a few days before rent is due, reminding everyone that rent is due, that failure to pay will generate a blot on one's record which will create long-term financial difficulties, but that in recognition of the extraordinary situation of the pandemic, the landlord wants to hear from people who will have difficulty making their payment, so that things can be worked out (perhaps making an exception to the no-partial-payments rule to allow a partial payment as a show of good faith, etc). A second letter could be sent only to people who don't pay or make contact, a few days after the due date, reminding the delinquent tenants that rent is owing, and that while they cannot be evicted for non-payment during the moratorium, it is still a blot on their record, and they need to come in ASAP to work out a payment plan so their future ability to rent housing will not be affected. The precise details could be tweaked for a given area, but the central idea is to make it clear that the landlord needs to hear from tenants, but is willing to work with them to get through this situation.