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The Eviction Crisis: Noise and Insight

On legal process grounds, the U.S. Supreme Court has just ended the Federal eviction moratorium about halfway through its sixty-day extension.  But eviction moratoriums in seven states and the District of Columbia continue, as the homelessness crisis the Federal moratorium was intended to curb persists.  Reportedly, the initial moratorium, which began in September, 2020, during the Trump Administration, kept millions of people from being forced out of their homes for unpaid rent during the pandemic.  Meanwhile, it is estimated that over 15 million people are currently behind on rental payments in the U.S.  Furthermore, Covid-19 is especially dangerous to homeless people.  (Hence the role played in the moratorium by the CDC, the agency that issued that temporary eviction ban.)

In short, millions of people are now in danger of being forced to live in peril in tent cities, under bridges or on the street.  How have we come to this moment of crisis, what should be done about it, and what can be done to make sure we don’t end up here again? 

It is clear that the answers to these questions are not to be found in the pages of that bastion of intellectual conservatism, The National Review.  Several recent opinion pieces in that magazine, critical of the eviction moratorium, focus their concern almost exclusively on the vulnerability of the “smaller landlord,” which is to say the not-immensely-wealthy landlord whose well-being is especially dependent on rental payments.  However, you would be hard pressed to find similar concern in these articles for the far greater numbers of tenants.  This despite the fact that, even to the writers of The National Review, tenants in general would surely rate as “smaller” — in income, say, or social standing, or the ability to withstand financial setback — than even the smaller landlords.  The way in which one Sean-Michael Pigeon closes his opinion piece on the moratorium might stand for the view taken of the eviction crisis in all of these pieces: “Renters may need assistance, but landlords can’t endlessly house tenants that don’t pay.  No matter what, eventually, the rent comes due.”  The gist of all of these articles is the same: life’s tough but fair, honor your contracts, pay the rent or get evicted, no need for a moratorium because there is no crisis worth worrying about.

In that article, Pigeon also criticizes the moratorium extension in part because the government has been very slow in paying rental arrears to landlords.  Apparently, then, Pigeon finds the bailout, a major feature of the moratorium, desirable; why else would he object that it is being paid out too slowly?  But as writers for The New York Times have observed, the slowness of rental payouts weighs in favor of extension, not against it. 

In other words, The National Review knows that it doesn’t like the moratorium or its extension and will find ways of expressing that, rational grounds be damned.  We must therefore look elsewhere for insight into the causes of the eviction crisis and its amelioration and prevention.

The dynamics at play in other, more natural, disasters such as wildfires and floods are a good place to start.  Like those disasters, the impending catastrophe of widespread homelessness is a kind of perfect storm.  And though a perfect storm may seem to come out of nowhere, it does not.  It arises out of a kind of pre-condition or systemic weakness that needs only some relatively foreseeable stressful event to turn things catastrophic. 

In the case of wildfires, it is dry landscape that acts as tinder awaiting only a lightning strike to spark conflagration.  In the case of the mass evictions that are imminent, the tinder is a society already weakened not merely by immense inequality in wealth (which is, after all, a relative thing) but widespread economic distress — that is, absolutely, not merely relatively, low income.  Under such conditions, a fairly mundane reversal here or there — a health problem resulting in high medical bills, a downturn in business — can make rental or mortgage payments impossible.

If that state of affairs is the tinder for the eviction catastrophe now impending, the Covid-19 pandemic is the latest and biggest spark.  It has thrown people who were already struggling to pay for housing out of work or drastically reduced their income across entire industries — the restaurant business, the live entertainment industry, the tourist industry, mass transit, air travel.  The loss of purchasing power among those in one industry reduces the customer base for a myriad of others.  The result is the imminent surge of homelessness.

Whence come the attributes of deepening poverty that are the pre-condition for this catastrophe?  I believe the central insight that came to the 19th Century thinker and reformer Henry George in the foothills outside San Francisco provides the answer: poverty persists and deepens as civilizations such as ours advance in their ability to produce wealth because land then increases in value; where land is allowed to be privately owned and so becomes monopolized, people in general must then pay more for the privilege of using it.

Modern-day San Francisco bears this out.  In recent years, the level of homelessness in that city has been dire and was rising even before the pandemic.  A study by the Bay Area Council’s Economic Institute from April, 2019, begins: “By virtually every measure, the Bay Area’s homeless crisis ranks among the worst in the United States.  The Bay Area has the third largest population of people experiencing homelessness (28,200) in the U.S., behind only New York City (76,500) and Los Angeles (55,200)….”  At the same time, the “overall median home value in San Francisco rose a whopping 90% between April 2009 and April 2019, from $715,900 to $1.36 million….”

Today as in the industrial depressions of George’s day, in San Francisco as in New York City and elsewhere, the rise in housing costs has outstripped the general level of wages, driving up the level of an already substantial homelessness.

Clearly, the eviction moratorium was a good-faith response to an impending catastrophe.  But when the economic conditions that set us up for catastrophe are considered, it becomes clear that a moratorium is inadequate to the crisis at hand.

That is not just because it is temporary, or that under our current tax policy a moratorium bailout effectively sends the bill for rental assistance disproportionately to the members of the middle and lower classes who are relatively least able to afford it.  (Consider the 2016 and 2017 Federal tax returns of Donald J. Trump, a larger landlord who paid all of $750 in Federal taxes for each of those years).  No, the truly significant defect in a moratorium is that it does not address the origins of the problem.

The remedy George proposed for the alleviation of poverty in general applies to the housing crisis in particular: eliminate the injustice of private land monopoly.  The so-called single-tax mechanism George proposed as the most expedient one to achieve that goal was to have society and not a relatively small number of individuals collect the economic rent, that is,   the rental value of land.  Let the small landlord or any landlord pocket what is theirs by right — the value of improvements on it such as buildings or building maintenance or services provided to tenants.  The value of the underlying lot on which a building sits — always a major part of what rent is made up of, and in the case of residential real estate often the greatest part of it — arises from the presence and development of the community around it and therefore belongs, by right, to the community.  Reform land and tax policy to reflect that and the threat of widespread homelessness, along with the injustice of private land monopoly generally, will disappear.

To illustrate the effects of land monopoly, George described a hypothetical situation wherein one person owns all of the land of an island that is also inhabited by ten thousand others.  If private land ownership is respected there, any of the ten thousand that cannot meet whatever terms the landowner proposes is left with only two options: emigrate or die.  And where emigration means drowning, their only option would be death.

In effect, that is where we are with the eviction crisis.  Times being tough financially and there no longer being any frontier where free land is available, there is nowhere a mass of renters and homeowners can go for housing they can afford.  They — we — are in the position of George’s islanders.  The underlying conditions of rising housing costs and falling income being widespread, emigration will not help us if we fall into financial distress.  Ultimately, the only real option for those who can’t pay for housing is homelessness, and the disease and death it brings.

The eviction crisis makes it clear that now more than ever we need land policy reform.

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