On the surface, it doesn’t seem like there’s a housing crisis in Michigan.
Evictions haven’t ballooned and the state hasn’t spent down a significant portion of its COVID-19 rental assistance funds.
But despite some seemingly encouraging signs, there is near unanimity from those involved in the rental market — housing activists, service providers, government officials and landlords — that we are on the verge of a full-blown eviction crisis.
Their message is that drastic action has to be taken in the state by the end of the year to stop massive housing displacement in 2021.
Moratoriums provide an eviction stopgap — temporarily
The latest numbers from the state’s Supreme Court Administrative Office show that eviction filings are down about 50% this year from 2019.
Due to overlapping local, state and federal eviction bans, it’s been difficult to evict people. Michigan had a moratorium that lasted into July, the 36th District Court in Detroit pushed its ban into August and the U.S. Centers for Disease Control and Prevention issued a moratorium on evictions for nonpayment that lasts through Dec. 30.
The University of Michigan’s Poverty Solutions initiative has been manually tracking the number of eviction filings at the 36th District Court. Last year, an average of 135 evictions were filed each working day. This year, according to their tracker, more eviction cases have been getting filed each month since the court ban was lifted, peaking at 102 per day so far in November.
“We’ve been surprised that the number of filings is relatively low, given that we’re in a state of crisis,” said Alexa Eisenberg, a PhD candidate at the University of Michigan and organizer with Detroit Renter City, a tenant advocacy group.
But, those cases aren’t getting to a verdict. Last Tuesday, 36th District Court decided to suspend landlord-tenant hearings again through Dec. 8 in an effort to limit the spread of COVID-19. The court had already been moving slowly as it deals with its backlog. The judges hear about 120 cases in total on an average day, but only about 48 of those are current cases (filed since the court resumed hearings in August).
“What’s preventing evictions right now is less the CDC moratorium and more that the courts are moving at a glacial pace,” Eisenberg said.
Hurdles for renters and landlords means relief funds aren’t getting spent
Fewer evictions doesn’t mean more tenants are paying their rent in full. By next month, about 1.34 million renters in the U.S. could owe back rent totaling $7.2 billion due to pandemic-related job losses, Federal Reserve Bank of Philadelphia researchers estimate. And if they can’t come up with the money they owe to their landlords during the eviction moratoriums, the clock will eventually run out on them.
In Michigan, the Eviction Diversion Program was created to deal with the problem of unpaid rent. Funded with money from the federal CARES Act, the program gives participating landlords the ability to recoup up to $3,500 in unpaid rent from state funds if they agree to not evict the tenant.
Housing advocates predicted that the funds would dry up soon after it was launched in July. But, more than half the money is still left in the pot. The Michigan State Housing Development Authority (MSHDA), which administers the program, says only about $17 million of the $50 million allocated has been spent so far.
“It’s troubling that only a fraction of the $50 million has been used in light of almost irrefutable evidence of much higher need for rental assistance,” said Jim Schaafsma , a staff attorney at the Michigan Poverty Law Program.
Nearly 30% of Michigan renters making less than $50,000 per year report that they are behind on rent. According to an analysis by global investment bank and advisory firm Stout, the total rent shortfall in the state could be as high as $670 million by the end of the year — far less than the $50 million allocated for the Eviction Diversion Program.
Landlords are feeling the shortfall. Silver Capital Group owns 143 single-family homes in Detroit that rent for an average of $1,000. Co-owner Sterling Howard said that around one-third of his tenants are delinquent on rent.
“When it comes to paying expenses associated with the property — insurance, taxes, mortgages — landlords are bleeding money,” Howard said. “Multiply that across many properties and it puts you in a very stressful situation.”
Of the around 40 tenants who owe him rent right now Howard says only one has successfully navigated the program, and he hasn’t even gotten a check from the state yet.
“The government gave out billions of dollars to businesses that were struggling, and they did it quickly and efficiently because they knew there was a problem,” Howard said, referring to the Payroll Protection Program. “They should be able to do the same thing for this program.”
Howard blames onerous documentation, which requires renters to submit proof for all sources of income for each member of the household, as the main reason he’s had so few renters use the program.
He’s not the only landlord eager to access funds. In September, The Detroit News reported backlogs of hundreds of applications in counties across the state. In response, the state centralized the processing of some applications instead of letting local authorities do all of it.
What’s needed: ‘More money and less rules’
There is urgency to disperse funds in the Eviction Diversion Program beyond preventing evictions — money left unspent by the end of the year can’t be used in 2021.
In Detroit, the city itself has tried to make things easier by setting up a hotline and pushing applicants to housing agencies like United Community Housing Coalition and Wayne Metro Community Action Agency.
So far the city has gotten over 9,000 calls through its hotline. Around 2,000 callers qualify for the Eviction Diversion Program. But Donald Rencher, director of Detroit’s Housing and Revitalization Department, said the city has only spent around $500,000 of the $6.5 million it was allotted for eviction diversion.
“We know we’re gonna have all those dollars spent by the end of the year,” Rencher said. “If you’ve called our hotline and haven’t been contacted yet, you will. We’re gonna get through them all.”
Rencher says getting tenants to complete documentation is the main hurdle, especially those without access to a printer or computer. The city has been going to people’s homes to pick up documents when necessary.
Wayne Metro CAA was allocated $4.5 million by the state and has given $2.2 million to 608 households. Even so, it would like to make getting help easier.
“Give us more money and less rules,” said Mia Harnos, chief strategy and innovation officer at Wayne Metro. “If you’re already enrolled in one of our programs and have the documentation, let’s get you everything else you’re eligible for.”
Though it started out slow, MSHDA said grantees will almost certainly pay out the vast majority of the remaining funds.
Renters still at risk
Poverty Solutions’ tracker found that about 27% of the eviction cases filed this year were for issues unrelated to nonpayment: things like property damage, land contracts and “termination,” a catchall for breaches of lease.
“If a landlord is fed up, they’ll find a way to evict a tenant,” said Rachael Baker, an organizer with Detroit Renter City.
That’s the case for Andrea Heintzelman, who lives in an apartment building near Midtown. Her landlord wants to renovate the unit and raise the rent. Even though Heintzelman and her roommate were both paying rent they were on a month-to-month lease, which offers limited protection from eviction. The landlord sent a seven-day eviction notice earlier this month.
Heintzelman hasn’t been kicked out yet, but doesn’t know when she might or what she’ll do if she is. It’s not clear how the eviction will proceed given the court’s recess.
“All this time I’ve been asking my landlords what’s going on and they haven’t told me anything,” she said. “I don’t know if they’re gonna show up one day and throw me out.”
Sterling Howard, of rental property firm Silver Capital Group, said it’s often not in the interest of landlords to evict because of attorney fees and unit turnover costs. “Landlords are not trying to evict people,” he said. “That costs a lot of money. What landlords are trying to do is get tenants to pay.”
Southwest Housing Solutions, which owns around 1,200 units of moderate- to low-income housing units across the city, has a similar stance. Executive Director Timothy Thorland said delinquency for their tenants is a little over 27% right now — about double the normal rate.
The housing nonprofit is furiously trying to sign up tenants for the Eviction Diversion Program, hosting informational sessions and encouraging renters to fill out applications. It’s had some success — about one-third of the delinquent tenants have completed or are working their way through the application process.
But Southwest Housing Solutions likely won’t be able to enroll everyone. “The program is great,” Thorland said. “But I don’t think all the money in the pot solves all the problems for all the landlords in the state.”
In the end, some will face eviction. “I’m afraid that we’re going to have some collection of tenants who weren’t able to keep up with rent and didn’t follow up with the program,” Thorland said. “We’re going to have to file the appropriate paperwork against that.”
Next year’s crisis
The state plans to run a “scaled down” version of the Eviction Diversion Program in 2021. The city of Detroit has committed an additional $5 million.
But the federal government is the only hope for widespread assistance, advocates say. “The Eviction Diversion Program will hopefully go a long way, but it won’t last forever,” Rencher said. “The worry is what happens in March and April 2021. That’s when we’ll really need to put a subsidy out there and get jobs back that we’ve lost so we can actually stabilize the ship.”
Joe Biden is urging Congress to pass a smaller stimulus bill before his inauguration on Jan. 20 next year. He is reportedly also considering instituting national bans on evictions and foreclosures through executive orders.
In the meantime, Wayne County landlords and tenants struggling to pay rent should call the city of Detroit’s eviction prevention hotline. Landlords in other counties should go to the MSHDA website, where they’ll be able to apply or be directed to a local agency for support.
Additional editorial support for this article was provided by Outlier Media.