on Oct 01, 2020
Wake County Offers a Model for Eviction Prevention as Renters Face a National Crisis
Written by Phillip Kash and Sarah Kirk
The economic impacts of the COVID-19 pandemic have exacerbated pre-existing housing affordability challenges and will lead to an eviction crisis on a scale never before seen. In the face of this crisis, Wake County, North Carolina, recently announced the House Wake! COVID-19 Eviction Prevention Program following an in-depth study of housing needs by HR&A. The program offers a model for other state and local governments seeking to keep low- and moderate-income renters in their homes and to stretch limited public dollars.
Loss of income is the leading cause of housing insecurity for low- and moderate-income households, and the rise in housing insecurity tied to COVID-related job loss, reduced hours, and illness will be acute. Thousands of families will find themselves at risk of eviction or foreclosure and homelessness, as well as in need of expanded access to government services.
Local governments are largely on their own as they respond to this need. Most states temporarily suspended evictions and utility shut-offs in the spring to keep families in their homes, and the CARES Act put in place supplemental unemployment insurance to affected households. As is well-known, however, most of these federal and state protections have exhausted their funds or lapsed or shortly will. Attempts to pass additional federal recovery measures have stalled.
A notable exception to this litany of “too little for not long enough” is the CARES Act’s Coronavirus Relief Fund (CRF), an atypically flexible grant program that has awarded $150 billion to state and local governments to cover a wide range of costs incurred due to the pandemic as long as they were not previously budgeted for. Wake County, which encompasses the Raleigh metro area and is home to 390,000 households (including four staff members in HR&A’s downtown Raleigh office), received $194 million in CRF funds.
Wake County retained HR&A to estimate the scale of need for emergency housing assistance due to COVID-19, understand which residents faced the greatest impacts, and advise on a strategy to keep families housed. The County chose to focus on renters because of the weakness of State eviction protections for renters, stronger protections for owners at both the State and federal level, and the relative lack of assets among renters vis-a-vis owners at all income levels.
More than a third of Wake County households rent, and most of them have incomes below 80% of area median income (AMI) (62% of renter households, or 88,000 of 141,000). Eleven percent of renters were unemployed as we began the assessment stage of the project in June, principally as a function of COVID-19. We defined the households at greatest risk of eviction as being those who had become unemployed and whose income had been 80% of AMI or less – approximately 11,000 households or 7.5% of all renters.
The House Wake! Eviction Prevention Program – funded with $17 million of CRF allocations – and its sister program elements are designed to prioritize households at greatest risk of eviction, provide multiple safety nets to keep tenants in their home, and serve the most households by sharing the economic burden among the County, tenants, and landlords. The three-step intervention program consists of:
- Eviction prevention through financial assistance to tenants and landlords to cover rent shortfalls resulting from a loss of income. The program will pay a portion of tenants’ rent from March through December, in exchange for landlords agreeing to forgive the remainder, discount rent January through March 2021, and forego eviction.
- Eviction mediation services consisting of pro bono legal support for tenants who are unable to reach an agreement with their landlord. Through a partnership with Legal Aid of North Carolina, this program will aim to find solutions to stabilize tenant obligations and prevent eviction.
- Relocation assistance, including transitional services and relocation support, to residents whose housing could not be stabilized through interventions 1 or 2.
Through these three steps, the County estimates that the Eviction Prevention Program will help keep more than 3,000 households in their homes, while facilitating access to other housing protection for additional households in need and testing the effectiveness of the program model to support future state or local funding if needed. Local and state governments nationally can learn from this model, including several key features that increase its potential to limit evictions over the long term:
- It provides timely assistance to those in greatest need. The Eviction Prevention Program is targeted to low- and moderate-income renters, those residents most vulnerable to eviction in the short term.
- It provides multiple points of intervention to reach more residents. Wake County renters interested in the Eviction Prevention Program may be unable to participate if their landlords are unwilling to participate, but the County can serve all income-qualified renters facing eviction through the other tiers of intervention, either to prevent eviction through mediation or to quickly re-home evicted households. The flowchart above illustrates the path of assistance for at-risk renters.
- It incentivizes landlords to share in the cost of rental assistance. The goal of this requirement is not to be punitive or create burdens for landlords, but rather to distribute the costs among renters, landlords, and taxpayers. In exchange for forgiving a share of rent, landlords can receive compensation for lost back rent they otherwise could not recoup, and the program can reach more households by reducing the cost to serve each individual household. The table below provides an illustration of how the burden-sharing works form a landlord’s point of view, contrasting landlord recovery under the Eviction Prevention Program with recovery under an eviction scenario. The Eviction Prevention Program makes burden-sharing requirements explicit; the Eviction Mediation Program does not have set requirements but will aim to reach equitable settlements between landlords and renters, which may require concessions on the part of the landlord to prevent evictions.
- It provides enhanced legal services to tenants. North Carolina’s eviction laws overwhelmingly favor the landlord, and renters have few rights and limited recourse to slow or prevent eviction. By layering funding for rental assistance with funding for legal services and mediation outside of court, the Eviction Prevention Program helps alter the balance of power between landlords and residents, slow the eviction process, and find alternative settlements.
Eviction prevention measures instituted at the local level must be tailored to match local needs, government resources, and market realities. These features will be critical to sustaining and maximizing the benefits of local efforts and, collectively, local efforts will be critical to forestalling a national housing crisis.