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Congress must make sure eviction bans will not lead to housing crisis

Congress must make sure eviction bans will not lead to housing crisis
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The tenant eviction moratorium passed by Congress marks an important action toward protecting vulnerable renters in the coronavirus crisis. But this measure remains incomplete and leaves many other tenants behind. So unless Congress takes further action, the expiration of this temporary ban will result in an avalanche of evictions, and then a cascade of more problems that will plague evicted tenants for years to come.

More Americans are renters today than at any time since 1965. When the current eviction moratorium ends, many will owe four months or more of back rent they will be unable to pay without significant assistance. These tenants will face eviction that, even absent a global pandemic, results in devastating consequences, like homelessness, job loss, the disruption of child education, and physical and mental health problems.

Getting named in an eviction lawsuit, or owing a debt to an old landlord, can also deprive tenants of future housing opportunities. Landlords often automatically reject applicants with eviction case records, even when the case was dismissed based on unlawful reasons or if it was filed years ago. Most landlords deny those applicants who failed to pay rent in the past or against whom courts entered eviction judgments. As many eviction court records are available online, landlords along with those specialized tenant screening companies on which they often rely can access these records and screen out the tenants who have been sued for eviction.

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Policies excluding the applicants with eviction records disproportionately affect tenants of color and black women in particular. A study conducted by the American Civil Liberties Union revealed that in over a dozen states, landlords filed eviction cases against black women renters at double the rate or higher of white renters. The evictions occurring in the wake of the crisis will simply perpetuate racial and economic disparities.

Moreover, tenants unable to pay back rent will face the threat of damaged credit scores. Landlords usually refer unpaid rent to debt collectors, who send them to credit reporting agencies. This landlord collection account on a credit report is a negative entry that can remain for up to seven years and significantly lower credit scores. This hurts the ability of many tenants to secure new housing and reduces their access to affordable credit and future loans. In such circumstances, these consumers are often forced to turn to predatory lenders and landlords charging above market rates for low quality housing, keeping them trapped in a spiral of debt.

Congress should address this by expanding its moratorium of 120 days on evictions from properties with federal financing or assistance to cover all renter households, and prohibit landlords from evicting tenants because of rent arrears accumulated during the crisis. Congress should not leave struggling tenants to pay back rent on their own. It should instead fund rental assistance both to reimburse landlords for unpaid rent and to help the tenants who remain in financial distress after the pandemic.

To ensure tenants can find housing in the future, prevent damaged credit scores, and enable the recovery, Congress should also prohibit landlords from denying rentals based on rent arrears or on eviction records coming out of the crisis, prohibit landlords from referring unpaid back rent during the moratorium or during the 120 days after to debt collectors. Congress should ban tenant screening companies from reporting eviction records that arise out of the crisis or providing rental recommendations based on such records. It should also ban the reporting of debt collection accounts, no payment of rent, or other adverse information about tenants that arise out of the crisis to credit reporting and tenant screening agencies.

States can also protect tenants with eviction records after the pandemic and beyond. In addition to establishing their own eviction moratoriums, states should ban landlords from rejecting applicants based on eviction records, housing debt, or other adverse credit information related to the crisis. States should establish procedures letting dismissed or outdated eviction cases be sealed to prevent landlords from using such records to deny housing. By implementing such measures, Congress and states will ensure every American can recover after an unprecedented crisis.

Ariel Nelson is an attorney at the National Consumer Law Center and is the author of “How Errors by Criminal Background Check Companies Continue to Harm Consumers Seeking Jobs and Housing.” Eric Dunn is the litigation director who focuses on rental policy at the National Housing Law Project.