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COMMENTARY | The eviction cliff demonstrates that the United States needs to build stronger financial safety nets for the American people.
It’s no secret that the U.S. is facing a national housing crisis. The so-called “eviction cliff” created by the economic fallout of the Covid-19 pandemic is estimated to put six million American households at risk for eviction and owing approximately $23 billion in rent.
But the country’s failure around rental assistance is just the tip of the iceberg. Things are going to get worse, and we need to start building an emergency aid infrastructure for an era of crisis.
The upheaval of the past year led to a few steps in the right direction like the federal eviction moratorium and the nearly $47 billion in emergency rental assistance. Here in New York, which has more renters than any other state in the country, $2.7 billion was allocated for emergency rental assistance.
However, we’ve quickly learned that funding is only half the battle. Recent reports have indicated that, less than 16.5% of the $47 billion aid had found its way into the hands of renters, as the funding ran into a labyrinth of paperwork, ineffective communication and jury-rigged cash administration and application processing infrastructure hastily developed by state and local governments. After many grantee cities failed to meet the requirement to allocate 65% of these funds by Sept. 30, the Treasury Department announced that they must submit plans detailing how they’ll increase distribution speeds by Nov.15, leaving those who don’t comply at risk of losing the funds. Simply put, we're seeing in real time our collective failure to prepare cities and states to distribute emergency assistance dollars.
Unfortunately, this is only the beginning. Another active wildfire season in the West and the devastating impact of Hurricane Ida on the Gulf Coast is only adding to our housing woes. Last year, more than 1.7 million Americans were displaced by climate-related disasters. Researchers predict that by 2050, that number could skyrocket to 200 million worldwide. Unsurprisingly, all of these trends have massive implications for the country’s endemic racial equity gaps, as both eviction and natural disaster-related displacement disproportionately affect communities of color.
Addressing these challenges will be an enormous task, but not an impossible one. The most effective way to solve this challenge and fight poverty, according to research, is to provide direct cash to those who need it. Initiatives like Mayors for Guaranteed Income, a network of 60 mayors that have advocated for guaranteed income, are proliferating. California is also experimenting with universal basic income at a state level—thanks in no small part to the work of activists like former Stockton mayor Michael Tubbs.
The federal government has also started activating researchers, technologists and advocates to identify ways to push payments directly to vulnerable populations, like through the Consumer Financial Protection Bureau's recently launched tech sprint focused on supporting low-income tenants and small landlords.
These programs are working. According to the Congressional Budget Office, the federal government's stimulus distribution, which proved to be an effective way to get money quickly into the hands of millions of Americans, increased GDP by 0.6%. The country’s colleges have also proved to be a unique laboratory for the potential of cash transfer programs, like Compton College’s work to provide $250 grants that doubled the likelihood of graduation for students who received them.
To build the financial safety net that millions of Americans will need in the coming months and years, we must take these principles and best practices around direct cash payments and expand them to our state and municipal infrastructure. That should include building holistic digital services and mechanisms for distributing rapid cash assistance. Alongside this technological infrastructure, it must include commensurate investments in human infrastructure—something New York City has done effectively, like expanding access to supplemental legal support through its groundbreaking “right to counsel” law, and its aggressive community outreach strategy during the 2020 census.
The need to improve these distribution systems is only going to accelerate. The eviction cliff is just the latest of a series of crises that are only going to become more frequent—and for which we are increasingly unprepared.
We can’t lose sight of the need to build systems that can weather not just the immediate storm, but also the storms to come. If we fail, it won’t matter whether we continue to throw money at the problem. We’ll just be throwing a rope down a bottomless pit, instead of building the safety net we need to break our fall.
Georges Clement is cofounder of JustFix.nyc. David Helene is cofounder of Edquity.
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