By Dick Hall-Sizemore
As has been reported on this blog, the Virginia Supreme Court granted Governor Northam’s request to extend the moratorium on evictions related to non-payment of rent.
The court was closely divided, 4-3. The dissenting opinions are quite convincing. It is obvious that the majority, cognizant of the dilemma caused by thousands of tenants out of jobs due to the coronavirus pandemic and facing eviction from their homes, decided to give the Governor, General Assembly, and (implicitly) Congress one more chance to come up with a solution.
Evictions generally
Rather than debate the merits of the Court’s decision, I am largely responding to, and following up on, Jim Bacon’s recent post regarding evictions and what happened to the federal CARES funding that has been provided.
Jim suggested that one answer might be that “poor people became suddenly overwhelmed with additional financial burdens,” but he doubts that is the answer. Another possibility he, and some commenters, raised is that poor people are “squandering their money on stupid stuff or feeding their drug/alcohol addictions rather than using it to pay their rent.” He then concedes that he has seen no evidence to confirm that conjecture. (One wonders why he would raise these two possibilities if there were no evidence to support them.)
Although Jim dismisses the possibility that poor people and the unemployed are not getting the additional federal money, that is indeed one plausible explanation for which there is evidence. There are estimates that 12 million poor people have not received their $1,200 stimulus checks. It is likely that a good number of those people live in Virginia. The Virginia Employment Commission was overwhelmed with claims for unemployment insurance (UI) benefits and did not start taking applications for the $600 weekly supplement until July 2 and issued the first checks on July 7. If you got laid off in April, and had been living paycheck-to-paycheck before that, it would have been quite easy to get behind on your rent while you were waiting for VEC to process your unemployment claim and before you could even submit a claim for the $600 supplement.
Another possibility is that people got some of these benefits, but it was not enough. If you were laid off in early March, you could have easily been a month or two behind in your rent by the time you got your $1,200 stimulus check. After you used that check to pay off the back rent plus penalties (you would be lucky if it were enough), you would be trying to make ends meet while you waited for VEC to process your claim.
One commenter was correct in pointing out that reasons other than nonpayment of rent, such as property damage or rules violations, can be causes for eviction. However, as Jim Sherlock explained in his recent post, the Virginia Supreme Court amended its first moratorium order to allow eviction cases for reasons other than nonpayment to go forward and the most recent court order also allows those types of actions.
Lost in this discussion is the recognition that folks are often evicted for being only a few days late on the rent, usually because the date on which they get paid does not coincide with the date the rent is due. If they are late even a few days, late fees and penalties can be tacked on, putting them further in the hole.
Although it is illegal for landlords to do so, tenants are evicted in retaliation for complaining about unhealthy living conditions, inoperative appliances, leaky roofs, etc. or for reporting the landlord for housing code violations. It is up to the tenant to prove that it was the intent of the landlord to retaliate and that is often hard to prove. Furthermore, if a tenant does not have a lawyer, and few do, they are not likely to raise this issue in court. n fact, there are law firms that advise landlords that the retaliation provisions are narrow and easy for them to beat.
Governor Northam’s response
Some contributors and commenters on this blog take the Governor to task for not calling the General Assembly into session earlier, in June or July, to deal with the eviction problem, rather than putting the Supreme Court in an obviously awkward position. I disagree. The Governor did not need to call the legislature into special session earlier because he already had the power and the resources to deal with the problem until the August special session. I blame the Governor for not using this authority and resources and for not being sufficiently aggressive in the past in dealing with the eviction problem.
The estimated number of potential evictions varies with the time frame being considered. In his July 24 letter to the Chief Justice, the Governor cited over 6,000 cases pending for hearing between July 20 and August 7. The Legal Aid Justice Center’s Virginia Eviction Tracker notes that 8,587 cases are scheduled to be heard by September 21.
There are at least two factors that would indicate that these estimates overstate the number facing eviction due to overdue rental payments. First, as already noted, not all evictions are related to non-payment of rent. It is not known how many of the pending cases would fall into that category, but taking those out of the count would result in fewer tenants facing eviction due to non-payment.
A second factor is the Eviction Diversion Pilot programs that took effect on July 1 in Danville, Hampton, Petersburg, and Richmond. The essence of these programs is the establishment of payment programs whereby a tenant can pay off past due rent in installments. Until the participants have fully paid their back rent, their cases remain on the docket. Therefore, the number of pending cases probably includes some cases in which tenants are paying their past due rents off gradually.
The number of tenants participating in the pilot programs is not known. I asked the Executive Secretary of the Supreme Court, which was responsible for establishing the programs, for the data and was referred to the clerks’ offices for each of the courts participating. E-mail addresses of those offices are not readily available. Although the Supreme Court is seemingly trying to wash its hands of any further involvement in the program, the legislation establishing it requires the Court to provide data to the Virginia Housing Commission (a legislative agency) “at such times as requested by the Commission.” The Governor should ask his fellow Democrats on the Housing Commission to request data on the participation in the Eviction Diversion Program. That would give him a better idea of the scope of the problem.
Whatever the number of tenants facing eviction, the Governor earlier passed up an opportunity to follow up on prior actions to provide the most crucial assistance, short of money, that a tenant can have: a lawyer. Many commentators have noted that legal representation of tenants can lead to a significant decrease in evictions. In his 2019 budget recommendations, the Governor included the $2.6 million requested by the State Bar to hire 35 attorneys to represent indigent tenants. (The State Bar does not provide such representation itself; rather, the funds would be used to contract with the Legal Services Corporation of Virginia to provide the services.) The General Assembly reduced this amount to $1.3 million and stipulated that it was for “additional staff” for the State Bar, without mentioning the provision of legal assistance for poor people facing evictions. (See here and here.)
There was no funding for additional eviction-defense attorneys included in the 2020-2022 budget bill submitted by the Governor, but the General Assembly stepped up and provided an additional $1.5 million annually for housing attorneys. That funding was part of the $2 billion in new funding later unallotted due to the economic effects of the pandemic. It will be interesting to see if the Governor recommends freeing up those funds in his budget recommendations to the reconvened session. That would be an effective and relatively inexpensive way of partially dealing with the eviction issue, although its effect would be delayed until attorneys could be hired.
As for immediate, tangible assistance for tenants, there was no need for the Governor to go to the Supreme Court for an extension of the moratorium. He had a statutory moratorium and a pot of money that he could use to help tenants.
As noted by the dissenting Justices of the Supreme Court, the General Assembly had passed HB 340, with amendments requested by the Governor, and effective immediately. The legislation enabled any tenant who had been laid off as a result of the pandemic to obtain a 60-day continuance on any eviction proceeding.
To provide financial assistance to such tenants, the Governor earmarked $50 million of the federal CARES funds that the Commonwealth was slated to receive. But, as is the case with all programs, it took some time to get this assistance program up and running. In the middle of a pandemic, with many staff working from home, the problems were even greater. In his July 24 letter to the Chief Justice, the Governor reported that “we have worked to provide relief to 1,880 households experiencing economic hardship as a result of the pandemic and processed payments to 467.” That was just a drop in the ocean of over 6,000 cases pending for hearing between July 20 and August 7. Out of curiosity, I called the phone number provided for information on the program. A voice mail response told me to leave my name and number and that it may take several days for a counselor to call back. (I started to leave my number just to see how long it would take someone to call me back, but I decided not to clog up the system any more than it already was.) Obviously, the administration waited too long to put its rent program together, so that it could be ready to operate as soon as the money was available.
The Governor could have been more proactive in providing financial assistance for persons facing eviction. The Commonwealth is entitled to approximately $1.8 billion in federal CARES money. The $50 million allocated for eviction and foreclosure relief is less than three percent of that total. That seems to be a really small proportion to be used to meet, in the Governor’s words, “the distinct threat that the most vulnerable Virginians will be evicted from their houses at a time when our public health crisis is expanding….”
Undoubtedly, the administration would counter that there are many other COVID-related expenses for which the federal money is needed. Although the exact numbers are not readily available to the public, they would probably point to the millions used in FY 2020 to pay the costs of testing, PPEs, etc. That is largely a budget and accounting subterfuge. Agencies used their general fund appropriations to cover these COVID expenses. At the end of the fiscal year, when the federal funds were available, but agencies were no longer able to enter transactions into the state accounting system, the Department of Accounts changed the coding of those expenditures from general fund (fund 01000) to CARES (fund 10110). The result was a “freeing up” of general fund appropriation that contributed to the state’s year-end balance (surplus). The agencies never saw or benefited from the CARES funding. That CARES money that was used to increase the year-end general fund could have been used instead for eviction relief. The total amount is not publicly available, but I think it, added to the $50 million, would have gone a long way toward helping tenants behind in their rents.
A major shortcoming of the administration’s rent assistance program is that it provides one-time payments only. Such a payment might be enough to enable a tenant to catch up on back rent owed. For those that now have jobs, it would mean that landlords would be paid and the tenants could continue to have a home. It will not help someone who is unemployed to keep up those payments in the future.
It really seems that the Northam administration has no long-term plan to address the eviction crisis. In his July 24 letter to the Chief Justice, the Governor referred vaguely to working with the General Assembly on a legislative package “to provide additional relief to those facing eviction and to expand financial assistance for tenants through our rent relief program.” The General Assembly is scheduled to convene in Special Session in less than two weeks. would seem that the Governor would want to roll out his legislative program before then, for no other reason than to provide some credibility for his moratorium extension request. In any event, he has the authority today to allocate more federal CARES money for his rent relief program; he does not have to wait for the General Assembly.
Supplemental UI benefits
Conservatives have taken a curious position regarding unemployment insurance (UI) benefits and evictions. On the one hand, they acknowledge the difficult position of tenants who have lost their jobs due to the pandemic and say they “want every tenant who cannot pay because of COVID to be able to stay in his house.” On the other hand, they tend to oppose the very means whereby the unemployed can stay in their houses and landlords can also be paid: the federal supplemental UI benefit of up to $600 per week.
A major objection they raise is that this supplement results in a lot of people receiving more from UI benefits than from working and thus having little incentive to return to work. Upon close examination, however, this objection does not hold up. In the first place, with some exceptions, workers who fail to look for work or turn down a job risk losing all their unemployment benefits. Secondly, people actually are returning to work. In May, employers added 2.5 million jobs, in June, 4.8 million, and in July, 1.8 million, as the unemployment rate declined. Finally, proponents of this position offer only anecdotal evidence. On the other hand, recent research has shown that the enhanced UI benefits did not act as an incentive to remain unemployed.
Another objection is that continuing the supplement of $600 per week would be too costly. The Committee for a Responsible Federal Budget estimated that the cost to extend the benefit through December would be $437 billion. I agree that is a lot of money. But so is the estimated $258 billion, for calendar year 2020 alone, in tax breaks embedded in the CARES legislation that benefits millionaires and billionaires (including the Trump and Kushner families). When conservatives start howling about these benefits flowing to the rich through the CARES act, they might have some credibility when they complain about those unemployed, through no fault of their own, getting an extra $600 per week.
The current societal problems associated with the homeless population would be greatly exacerbated if thousands of unemployed people were suddenly evicted in the middle of a pandemic. There are various programs to assist the homeless, but conservatives should really prefer the supplemental UI benefit. Other than the existing unemployment office staff and procedures, there is no additional bureaucracy to suck up some of the money. Rather, it is efficient with the money going directly to the unemployed to spend on rent, food, clothes, medical care, etc.
And spend it they did. There is strong evidence that the economy would have been significantly worse off than it was had it not been for the supplemental UI benefits. If we are going to avoid turning families into the streets, but see that landlords get paid, the government needs to do something to help unemployed tenants weather the pandemic-induced recession.
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