Contact: Ron Mackovich, rmackovi@usc.edu
Evictions were widely prohibited during the early part of the pandemic. Now, federal, state and local moratoriums that keep non-paying renters from being kicked out are expiring. Their future is uncertain. In California, where a housing crisis predated the pandemic, the situation is now critical.
More than 60% of L.A. County residents are renters — the second-highest percentage in the nation. One report estimates as many as 120,000 households, including up to 184,000 children, are likely to become homeless when evictions resume.
USC experts are available to talk about the impact on the economy and on families facing housing insecurity.
Avoiding a tsunami of evictions
“Low-income tenants need rental assistance, and they need legal assistance to benefit from the patchwork of programs intended to help them. Proving a link between COVID-19 and an inability to pay rent may require documentation and savvy that not all tenants have. And we’re already seeing some landlords using illegal lockouts, harassment campaigns and threats to evict tenants unlawfully, especially from rent-controlled apartments. There’s no time to lose in creating effective assistance programs.”
Clare Pastore is a professor of the practice of law at the USC Gould School of Law. She works on issues of poverty, homelessness and access to justice, and is a co-author of the leading textbook on poverty and the law.
Contact: cpastore@law.usc.edu or (323) 717-2856
Disproportionate effects for minority groups
“Expanded unemployment insurance has kept millions in their homes — despite the economic devastation of COVID-19, only slightly more households are late on their rent this year compared to last. Losing these benefits, in addition to eviction moratoriums expiring, will create an enormous eviction crisis, leading to increased homelessness or doubling up. Doubling up could lead to crowded housing conditions where COVID could spread more easily.
“Low-income African American and Hispanic renters are more at risk for eviction because these groups had a greater rent burden pre-COVID — meaning they pay a higher proportion of their income towards rent — and because they have been disproportionately affected by COVID’s economic shocks. Because cities are segregated by race and class, eviction waves will be concentrated in particular neighborhoods, which will exacerbate the challenges households face individually.
“Households generally prioritize paying their rent, so when money is tight, they spend less on other necessities — food, clothing, transportation. If expanded unemployment insurance ends and eviction threats loom, households may try to avoid eviction by going hungry or sacrificing their own needs or those of their children.”
Ann Owens is an associate professor of sociology at the USC Dornsife College of Letters, Arts and Sciences. She is a faculty affiliate of the Spatial Sciences Institute and an associate director of the Sol Price Center for Social Innovation at the USC Price School of Public Policy.
Contact: annowens@usc.edu
A blueprint for rental market stabilization
“We need a plan for stabilizing the rental market. Unfortunately, unrestricted rental assistance to tenants or landlords, such as the $100 billion in the Heroes Act, is not a plan. It simply provides some promise of assistance without a strong link to long-term stabilization in the market.
“Policymakers must develop a ‘Blueprint for Rental Market Stabilization’ that prevents dire outcomes for renters and landlords alike that would result from mass evictions or personal bankruptcies filed by tenants. If we delay in providing a clear plan now, then tenants, landlords and creditors will continue to make haphazard decisions in the face of an unknown future.
“While there are no precedents for dealing with large-scale accrued rental debt, there are analogies in commercial real estate that can inform a solution. It is quite common for lenders to allow commercial real estate owners at risk of mortgage default to refinance debt in a way that either reduces the principle owed or extends the loan terms. Developing such a plan allows lenders to avoid the expense of a mortgage default or bankruptcy resolution.”
Gary Painter is chair of the Department of Public Policy and director of the Sol Price Center for Social Innovation and the Homelessness Policy Research Institute at the USC Price School for Public Policy.
Contact: gpainter@usc.edu
A cascade of economic disruption
“Rental defaults, evictions and abandoned apartments can cause a cascade of economic disruptions as uncollected rents cause owners to default on their mortgages.”
Larry Harris holds the Fred V. Keenan Chair in Finance at the USC Marshall School of Business. A former chief economist for the U.S. Securities and Exchange Commission, he also serves as director of the USC Center for Investment Studies.
Contact: lharris@usc.edu
