How to solve the housing crisis: more lawyers

In the overheated U.S. housing market, just complaining about a leaky ceiling can land you on the street.

Randy Dillard was living with five kids in a four-bedroom house in the Bronx when he informed his landlord of a persistent drip. Dillard rented his $1,800-a-month home near the New York Botanical Garden with help from the federal government's Housing Choice Voucher program. So when his pleas were ignored, the local housing authority administering the vouchers cut off the landlord's payments. Rather than prompt compliance, the move had the opposite effect: The landlord tried to evict Dillard.

Dillard was lucky enough to find free legal help through a local aid program and settled with the landlord. "If I went in without an attorney, I would have been in a shelter," he said.

That, the New York City Bar Association says, is precisely the point. The solution to a homelessness crisis that has accompanied the drop in affordable housing is to hire more lawyers: Give poor renters an attorney, and landlords will more likely settle eviction cases. Homelessness will fall, and the strain on city services will be relieved. Or so goes the logic.

Dillard's victory did put him in rare company. U.S. landlords initiate more than 3 million evictions a year, and most are won the moment they're filed: That's because property owners can usually afford lawyers, while most renters can't. In New York City, renters who face eviction usually do so without a lawyer, compared with just 2 percent of landlords who represent themselves, according to a paper published last year in the Connecticut Law Review. It's about the same all over: In Maryland, 95 percent of tenants argue eviction cases without a lawyer. In Washington, D.C., the figure is 97 percent.

“Tenants who face eviction without counsel simply have no idea what their rights are,” said Andrew Scherer, policy director at the Impact Center for Public Interest Law at New York Law School.

While true of most matters involving litigants who represent themselves, it is acutely the case in an area governed by a patchwork of federal, state, and local laws. Renters can avoid eviction and even win rent cuts if landlords haven’t kept up with repairs. They can also win if landlords missed some procedural steps in filing for eviction, or if they haven’t complied with rules governing affordable apartments. The bar association, in a new report, said if taxpayers fund legal counsel for poor renters who face eviction, they would learn of those rights, and the knock-on effect would eventually pay for their lawyers — and save the city millions of dollars.

Here's how that works: Under a bill being considered by the New York City Council, the city would provide funding for free lawyers to renters earning less than $50,000, or twice the local poverty level for a family of four. According to the advisory firm Stout Risius Ross, which prepared the bar association report, the bill would provide lawyers to defendants in about 129,000 cases, at a cost of $259 million. In return, the city would save more than a half billion dollars by keeping families out of homeless shelters and by preserving affordable housing. On the whole, the free counsel program would pare $320 million from the city's budget, even after counting the cost of the program.

That rosy projection may help generate momentum for the bill, which was first introduced in 2014. Forty out of the council's 51 members have signed on as co-sponsors, but the bill has yet to receive a committee hearing. "The biggest challenge isn’t philosophical, it’s on the financial realities of what it would cost," said Council Member Mark Levine, the bill's prime sponsor. Independent of the bill, the city will spend more than $60 million to provide civil legal aid to poor renters, Levine said.

That said, the bar association's numbers rely on a hodgepodge of old data and untested assumptions. To reach its $320 million figure, SRR started with a 25-year-old survey of the incomes of defendants in eviction cases to guess at the number of households eligible for free lawyers. It also used a 15-year-old report showing that tenants who appear in Housing Court with a lawyer were 77 percent less likely to be evicted than those who represented themselves. (In its defense, the bar association said these were the most recent data available). The report used fresher numbers to determine the cost of sheltering a homeless family ($43,000) and the share of families that enter homeless shelters due to eviction — about 47 percent.

Before you quibble with numbers so old that David Dinkins was New York City's mayor at the time, it’s worth noting that an estimate from New York’s Independent Budget Office, a nonpartisan agency, used a similar methodology. The IBO, however, said providing free lawyers in eviction cases would cost the city as much as $200 million a year, and that's after any savings from unused city services. The IBO assumed federal help for homeless services would drop as homelessness fell. The bar association report assumed the funding would continue apace. Meanwhile, what the IBO didn't deduct (and what the bar association did) is the estimated $250 million it would cost taxpayers to replace affordable housing that landlords, after evictions, would convert to market rate.

The bigger question may have less to do with the source of the data and more with the underlying logic. Most renters facing eviction got there because they owe rent. A lawyer might help them stay in their apartment for a while either by finding fault with the landlord or negotiating a payment plan, but that just pushes the problem down the line.

“Right to counsel is very sexy,” said Mitch Posilkin, general counsel for the Rent Stabilization Association, an industry group for New York City landlords. “The reality is, for the vast majority of cases as far as we’re concerned, it will come down to money at some point.”