There are better ways to house people than by banning evictions

April 09, 2021 | By ETHAN BLEVINS
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A common government response to the pandemic has been to freeze evictions to keep people housed. While an eviction moratorium may be attractive on the surface, this shortsighted tactic will only constrict access to affordable housing. There are better paths forward. Pacific Legal Foundation has challenged several of these eviction moratoria in court (see here and here).

Charting a course for the post-pandemic housing market requires understanding the pre-pandemic market.

That housing market was already rocky. Before the pandemic struck, homelessness was on the rise, and about a third of American households devoted over 30% of their monthly income to housing. When the pandemic hit, it was like a severe illness striking someone with a host of underlying health problems—poor health made the system far more vulnerable to catastrophe.

Diagnosing these pre-existing conditions is not all that difficult. Nationwide, the United States has a major housing shortage. This is the bitter harvest of decades of restrictive zoning, urban growth boundaries, and similar policies that have blocked building and inflated housing prices. Pandemic or no, this problem is here to stay until our cities decide to let housing supply keep pace with housing demand.

This underlying health condition matters when we consider how best to approach the pandemic’s housing jolt.

An Eviction moratorium only makes the underlying long-term health problems worse. About half of the rental housing stock in the United States is owned by “mom-and-pop” establishments—individuals or small businesses. When these landlords cannot evict tenants who aren’t paying, they can’t pay their mortgage or stay in business and end up fleeing the housing market, thus reducing the supply of affordable housing.

About a third of the landlords with single-family properties have had to dip into savings to cover rent shortfalls over the course of the pandemic. That forebodes foreclosure or sale in order to survive, if an eviction moratorium continues. A tenth of landlords with single-family housing units have already sold at least one of their properties, and even more have already sold all their rentals.

There’s a strong appetite in the housing market for owner-occupied households, so a lot of these properties will be leaving the rental housing market for good, or they’ll be scooped up by corporate entities that will likely renovate with the intent to cater to the higher-end (less affordable) housing market.

This all boils down to a worsening shortage of affordable rental housing post-pandemic.

There are ways to go about this that don’t sacrifice long-term health in a desperate bid for short-term treatment. First and foremost, let’s treat the underlying health condition by building more houses of all types across all price points. Let’s upzone, clear away the overgrown bureaucratic mazes that most builders must navigate to obtain a permit, and allow homeowners to build accessory dwelling units.

But there are also ways the government can combat the short-term illness without destroying our housing industry in the process. Some of this has already been done.

The federal government has unleashed many billions of dollars for rental assistance and unemployment benefits, as have many local governments. Perhaps these governments can exercise some confidence that these aid dollars can go to paying most people’s biggest expense—housing. Governments can also encourage landlords to work with their tenants by offering property tax breaks, tax credits, mortgage forbearance, or other benefits.

The solution now, to ban evictions, does the opposite—it gives tenants no reason to come to the bargaining table and work something out and every reason to ignore landlord pleas. The likely result will be a sudden flurry of evictions as these moratoria lift, evictions that might not have occurred if landlords and tenants had incentives to work together. The government could also mandate mediation prior to initiating the eviction process, create a priority system that fast-tracks the most urgent eviction filings, or place a monthly cap on the number of evictions local courts can process.

Pandemic or no, housing problems will always be with us. The press of the times shouldn’t blind us to the underlying causes that got us here. The eviction moratoria slapped down across the nation will only deepen the crisis that will live on long after the pandemic has passed. We need to address those deeper issues, not inflame them. And there are alternative emergency measures out there. Good or bad, such alternatives at least have the merit of not wrecking the rental housing market for years to come.