Testimony of Tom Waters
Housing Policy Analyst, Community Service Society
Public Hearing on Proposed Int. No. 214-A
(Provision of Legal Counsel for Low-Income Tenants Subject to Eviction)
New York City Council Committee on Courts and Legal Services
September 26, 2016
Thank you for this opportunity to comment on the vital issue of legal counsel for low-income tenants facing eviction. The Community Service Society is an independent nonprofit organization that addresses some of the most urgent problems facing low-wage workers and their communities here in New York City, including the effects of the city’s chronic housing shortage.
Evictions cause an enormous amount of harm, including homelessness, disruptions that may lead to job loss, disruptions in schooling, disruptions of neighborhoods, and loss of possessions, as described by sociologist Matthew Desmond in his superb book, Evictions: Poverty and Profit in the American City. But in this testimony I focus on the effect of evictions on rents and on the housing system.
As you all know very well, the housing situation for low-income New Yorkers is dire, and this problem is driven both by inadequate incomes and by excessive rents. The most recent information from the Census Bureau’s 2015 American Community Survey shows that the median income went up to $55,752 last year, finally getting close to what it was before the financial crisis of 2008 in inflation-adjusted dollars. The poverty rate also decreased to 20 percent from a high of 21.2 percent, although it is still well above its 2008 level of 18.2 percent. This is genuinely good news, but it must be considered alongside the fact that the median rent in 2015 is 10 percent higher than it was 2008. Incomes declined during the recession, recovered very slowly, and finally caught up this year, but rents climbed inexorably throughout the economic cycle.
Evictions are both a cause and an effect of the increasing pressure on tenants that these figures represent. As Victor Bach and I showed in our recent Community Service Society Policy Report, “Making the Rent 2016: Tenant Conditions in New York City’s Changing Neighborhoods,” rent increases during vacancy were responsible for 58 percent of the total amount of rent increases from 2011 to 2014 in rent-stabilized apartments. Even in unregulated apartments, increases during vacancy certainly play a major role. Tenants who have been living in unregulated apartments for longer periods tend to pay lower rents, just like longer-term regulated tenants do. The major difference is that fewer unregulated tenants manage to remain in their apartments long enough for this longevity discount to add up to a significant amount. Thus, evictions and other forced moves expose tenants to higher rents and tend to increase the rent profile of the housing stock as a whole.
Higher rents, along with inadequate incomes, also increase the likelihood of eviction for low-income tenants, especially those who do not live in public housing or privately owned subsidized housing and who do not have a Section 8 voucher. The Census Bureau’s New York City Housing and Vacancy Survey allows us to focus on this group, revealing that the median low-income household with an income below twice the federal poverty threshold, living in private-market rental housing, regulated or unregulated, paid 49 percent of its income in rent in 2014.
Figure 1 shows changes in rent burden for these low-income private-market tenants from 2005 to 2014, demonstrating how rent has outstripped income for regulated tenants since the recent economic slowdown. Rent burdens for these households worsened significantly during the boom prior to the 2008 economic crisis and have remained above their 2005 levels.
Rent pressures for low-income tenants can also be measured by examining residual income – the amount of money per household member that is left after paying rent, as shown in Figure 2. This measure tells much the same story as percent rent burden. Conditions worsened during the boom, and have since remained severe, this time with the puzzling exception of unregulated tenants in unregulated households.
When one considers that the median residual income for poor regulated tenants is just $150 per household member, or $5 per day for food, clothes, medicine, transit, and everything else, it is easy to understand how vulnerable low-income households are to eviction when they experience unexpected expenses or reductions in income. Relatively common circumstances that less stressed households can weather by cutting other expenses or drawing in savings can quickly become catastrophic to households with severe rent burdens.
Figure 1: Changes in rent burden for unassisted low-income private-market tenants, 2005 to 2014
Source: CSS analysis of the U.S. Census Bureau, New York City Housing and Vacancy Survey.
The city’s rapidly rising rents also raise the risk of evictions for low-income tenants through another mechanism. Rents that can be charged for vacant apartments in many neighborhoods across the city – including but not limited to those showing the conspicuous social changes we identify with gentrification – have risen well above what many tenants, regulated or not, are paying. This gives landlords an incentive to take any opportunity to remove tenants in place in order to create a vacancy and raise the rents toward the highest amount the market will bear. This often includes harassment and misuse of the courts.
Eviction is thus a key link in a process by which unaffordable rents feed on themselves and lead to even more unaffordable rents. High rents force people from their homes, creating opportunities for landlords to raise rents even higher.
By the same token, preventing unnecessary evictions becomes a policy lever by which we can slow the erosion of affordable housing in our cities. Every time we prevent the forced move of a tenant household, we save that household from the near certainty of a substantial increase in rent in its new apartment above what they previously paid, even where the old rent was unaffordable and may well have contributed to their eviction. And we also slow the process by which the city is becoming less affordable for low-income tenants in general.
Figure 2: Residual monthly income per household member for low-income private-market tenants
Source: CSS analysis of the U.S. Census Bureau, New York City Housing and Vacancy Survey. Figures in 2014 dollars.
For this reason, we see eviction prevention as an important element of housing policy as well as a matter of equal justice. And we know that leveling the legal advocacy playing field between landlords and tenants is an effective way of reducing evictions. We therefore fully support this legislation.