Chairperson Nadeau and members of the Committee, thank you for the opportunity to testify today. My name is Kate Coventry and I am a senior policy analyst at the DC Fiscal Policy Institute. DCFPI is a nonprofit organization that promotes budget choices to reduce economic and racial inequality and build widespread prosperity in the District of Columbia through independent research and thoughtful policy recommendations.
I am here today to testify on eviction prevention. Specifically, I will discuss:
- how evictions harm children and adults today and in the long term;
- how the pandemic is exacerbating the District’s affordable housing crisis;
- guidelines on for the federal Emergency Rental Assistance (ERA) funds;
- why the District’s current Emergency Rental Assistance Program (ERAP) is not the right vehicle to administer ERA funds; and
- how an ERA program should be designed.
DCFPI recommends that the District create a new program to administer ERA Funds. Each landlord would fill out a single application per property that would include all the tenants who are behind on rent. This would greatly reduce the number of applications that the District would need to process, which is particularly important given that funds need to be spent by September 30.
DCFPI also encourages the Council to urge the Mayor to dedicate local funds to eviction prevention. In addition, DCFPI recommends that the Council require the Department of Human Services to raise the limits on the amount of ERAP that households can receive to reflect the greater amounts of back rent that residents owe during the COVID-19 crisis.
Evictions Are Extremely Harmful
Research confirms that evictions are extremely harmful to those who experience them, often leading them into a downward spiral and setting them back for years. As Matthew Desmond documented in his book Evicted, eviction often increases material hardship, decreases residential financial security, and brings about prolonged periods of homelessness. Families lose not only their home, school, and neighborhood but also their possessions: furniture, clothes, books. It takes a good amount of money and time to establish a home. Eviction can erase all that.”[1] Evicted residents may also lose identity documents that are necessary for accessing benefits, enrolling in school, and applying for jobs—the steps that will help them move out of hardship.
Evictions also lead to court records that can hurt a resident’s ability to find a new home, as many landlords screen out applicants who have an eviction on their record.[2] Evictions can also lead to job losses and depression.[3] And, “evidence strongly indicates that eviction is not just a condition of poverty, it is a cause of it,” explains Desmond.[4]
COVID-19 Is Exacerbating DC’s Affordable Housing Crisis
The steep loss of employment due to COVID-19 has put many low-income residents in a more financially strained place, particularly as unemployment benefits are not enough to replace lost wages. Throughout January, 31,000 District households, on average, reported being behind on rent.[5] This is likely an underestimate as non-response is higher among groups that are younger, have lower levels of education, and identify as Black or Latino, all groups that are more likely to struggle to pay rent.[6]
Prior to the pandemic, nearly 60 percent of the District’s lowest income households, those earning less than $20,000 annually, were severely cost burdened, meaning they spent more than 50 percent of their income on rent.[7] Nearly 40 percent of renters earning $20,000 to $40,000 are severely cost burdened. This far exceeds the U.S. Department of Housing and Urban Development’s recommended 30 percent threshold.[8]
Residents of color are particularly harmed. Nearly 30 percent of Black renters in the District—more than 20,000 households—are severely cost burdened and another 20 percent are cost burdened.[9] Nearly 50 percent of Latinx renters are cost burdened, compared to about one-third of non-Latino or Hispanic white renters.[10]
Low-income family households who have high housing cost burdens spend less on basic necessities than other low-income households that do not have severe housing burdens, research shows. A study by the Joint Center for Housing Studies showed that severely burdened low-income families spend nearly $200 less on food and $54 less on healthcare per month than low-income households that do not face severe housing burdens.[11] It is likely that the reduced expenditures on these other needs means that families are sacrificing basic necessities in order to pay their rent.
DC Will Receive $200 Million in Federal Funding for Eviction Prevention
As part of the Emergency COVID-19 Relief package, the District will receive $200 million in Emergency Rental Assistance (ERA) funds. These funds come with the following restrictions:
- At least 90 percent of the funds must be spent on rental assistance or utility payments. The remaining 10 percent can be used for administration, case management, and other services;
- Households must have incomes below 80 percent of Area Median Income (AMI), which is $71,650 for a family of three;[12]
- Households must have qualified for unemployment or attest in writing that they have experienced a reduction in income, or incurred significant costs as a result of COVID-19;
- Assistance can be provided for up to 15 months. Up to 3 months of this assistance can be given as forward rent; and
- The District must spend the funds by September 30, 2021.
ERAP is not the Right Vehicle to Administer ERA Funds
DC’s ERAP program helps residents avoid eviction by paying for overdue rent and related legal costs. It requires individual tenants to apply. ERAP providers report being overwhelmed with applications. Given the number of renters needed be served and the speed with which funds need to be expended, ERAP is not the right vehicle to administer ERA funds.
Additionally, despite the Council passing emergency legislation waiving limitations on the number of months of rental arrears that ERAP can pay, the Department of Human Services (DHS) has decided to limit assistance to 5 months. This is not going to be sufficient for most renters to avoid eviction as the economic downturn started 11 months ago and will likely continue for additional months. The Council should pass new legislation requiring DHS to provide more assistance so that ERAP actually prevents evictions.
The District Should Create a New ERA Program
DCFPI recommends that the District create a new program to administer ERA Funds. Each landlord would fill out a single application per property that would include all the tenants who are behind on rent. This would greatly reduce the number of applications that the District would need to process, which is particularly important given that funds need to be spent by September 30.
Given the number of households in need, the number of months of rental assistance needed, and the utility assistance needed, it is unlikely that the District will be able to pay all unpaid rental arrears with just $200 million. DCFPI recommends that the amount of unpaid rent the landlord recovered through the proposed program would operate on a sliding scale with small, non-profit, and naturally affordable properties receiving a higher proportion of the unpaid rent. Landlords would have to agree that the amount provided satisfies the past debt.
The program should take into account funds received by the landlord through the Paycheck Protection Program (PPP) and other federal and local assistance programs. Many housing providers received funds but did not forgive rent.[13]
If landlords decide to not participate in the program, tenants should be allowed to apply themselves to receive the funds directly either to pay their arrears or pay for three months of rent at a new apartment.
Not all tenants may qualify for the ERA program or landlords may not receive needed paperwork from all tenants. In those cases, the District should allocate unrestricted federal or local funds to pay rental arrears for those households.
Thank you, and I am happy to answer any questions.
[1] Matthew Desmond. Evicted: Poverty and Profit in the American City, 2017
[2] Eviction Lab, “How does an eviction affect someone’s life?” https://evictionlab.org/why-eviction-matters/#eviction-impact
[3] Ibid.
[4] Ibid.
[5] “Tracking the COVID-19 Recession’s Effects on Food, Housing, and Employment Hardships,” Center on Budget and Policy Priorities, February 18, 2021, https://www.cbpp.org/research/poverty-and-inequality/tracking-the-covid-19-recessions-effects-on-food-housing-and
[6] Ibid
[7] Michael Bailey, Eric LaRose, and Jenny Schuetz, “What will it cost to save Washington, D.C.’s renters from COVID-19 eviction?’ Brookings Institute, July 2020, https://www.brookings.edu/research/what-will-it-cost-to-save-washington-d-c-s-renters-from-covid-19-eviction/
[8] “Defining Housing Affordability, “ U.S. Department of Housing and Urban Development,” https://www.huduser.gov/portal/pdredge/pdr-edge-featd-article-081417.html
[9] Bailey, LaRose, and Schuetz.
[10] Ibid.
[11] “The State of the Nation’s Housing 2017,” Joint Center for Housing Studies at Harvard University, 2017, http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/son2011_housing_challenges.pdf
[12] “FY 2020 Income Limits Documentation https://www.huduser.gov/portal/datasets/il/il2020/2020summary.odn
[13] Morgan Baskin, “The Same Property Management Companies and Building Owners Pressuring Tenants to Pay Rent Are Benefitting From Pandemic Relief,” Washington City Paper, August 20, 2020, https://washingtoncitypaper.com/article/304571/the-same-property-management-companies-and-building-owners-pressuring-tenants-to-pay-rent-are-benefitting-from-pandemic-relief-funding/