UM report: $8.2M in federal rental aid spent on Detroit landlords who evicted tenants

Researchers at the University of Michigan estimate at least $8.2 million in federal emergency rental assistance funds were spent at single-family properties in Detroit where landlords still moved to evict tenants within six months of payment.

A new analysis by Alexa Eisenberg and Kate Brantley of UM's Poverty Solutions was released Monday unveiling that pandemic-era emergency rental assistance did not guarantee housing stability for many Detroit tenants. 

The university report, "The crisis is not temporary: Evictions after emergency rental assistance in Detroit," includes a review of approvals for Michigan's COVID Emergency Rental Assistance (CERA) program and eviction filing data, as well as interviews with legal aid professionals, housing advocates and tenant organizers. 

Among 5,600 single-family rental properties in Detroit where a tenant was approved for at least one rent relief payment between June 2021 and February 2022, 15% of landlords moved to evict tenants within six months of the last recorded CERA approval date.

It's estimated that at least $8.2 million in CERA funds was spent at these properties, but because the analysis only covered about half of CERA-approved rentals in Detroit, the researchers say this amount is likely much higher.

In 2021, Congress allocated $46.55 billion for rent relief programs that aimed to stabilize housing for tenants unable to pay rent during the pandemic and repay debts to landlords. In Michigan, the CERA program accepted applications from April 2021 through June 2022 for $1.1 billion in total funding.

Despite $72 million in CERA funds paid to Detroit landlords and tenants in 2021, filings rose to about 60% of the pre-pandemic level that year, threatening the equivalent of 1 in 7 renter households with eviction, according to the report.

When the CERA program closed in June 2022, filings had risen to 75% of the 2019 level. Based on monthly filing trends in 2022, Detroit’s eviction filing rate is expected to return to the pre-pandemic level, with 21% of renter households (roughly 61,000 renters) facing eviction this year, according to the report.

"During CERA, Detroit landlords made extensive use of the court system to collect rental assistance, terminate tenancies and file serial lawsuits against tenants despite their widespread noncompliance with rental codes," said Eisenberg, a postdoctoral research fellow at Poverty Solutions. "Even with unprecedented funding and more 'tenant-friendly' procedures in place during the pandemic, the court system still heavily favored landlords."

Julie Schneider, director of Detroit's Housing and Revitalization Department, said CERA was an unprecedented tool that provided $274 million in rental and utility assistance to 30,000 Detroit applicants. Per state policy, landlords who accepted CERA payments had to agree not to take steps to terminate tenancy until at least one month after the CERA payment timeframe ended, unless there were specific lease violations like damage of the unit or violence on the property, she said.

"Without CERA funding households could have carried significantly more debt into the future, which could have negatively impacted their ability to obtain housing and remain financially stable," Schneider said in a statement. "The one-time nature of the funding limited capacity to guarantee long-term housing stability in every circumstance."

Detroit's ongoing housing instability has led to increased forms of rental assistance, including $20 million of American Rescue Plan Act funds to develop programming that provides residents resources and direct case management to Detroiters including a new Housing Services Division and Detroit Housing Helpline. The city also has backed a new Office of Eviction Defense with $18 million in city funding.

The authors' previous research showed that eviction cases were far more likely to end in a dismissal during the CERA period, preventing many eviction judgments. However, Monday's report reviewing 69,000 court filings in Detroit's 36th District Court found evictions among CERA participants were more extensive than court records quantify.

"Not only were eviction protections short-lived for many tenants who participated in CERA, but also many case dismissals were conditioned on a tenant's forced move," researchers found.

In addition, eviction court data lacks demographic characteristics like race, gender and age, which researchers say "systematically harms marginalized groups."

Detroit landlords filed 24,000 new eviction cases during the CERA period. Among CERA-approved properties with a subsequent eviction action within six months, 69% were associated with multiple pandemic-era filings. This was three times higher than the prevalence of serial eviction filings at comparable properties with no CERA approval, implying that landlords approved for CERA funds were more likely to repeatedly file for eviction than others, according to the report.

Researchers further allege that local nonprofits were ill-equipped to take on the high volume of CERA applicants, creating delays that heightened the risk that landlords would take eviction action. Administrative delays in the CERA roll-out disproportionately harmed Detroit's majority-Black renter population, they said. When CERA closed to new applicants in June 2022, just 66% of applications in Wayne County had been processed, compared to 91% in the rest of the state.

The new report documents how high case volumes, tenants' limited access to full legal representation, and default eviction judgments against tenants who could not appear in court undermined CERA's effectiveness.

Detroit's Right to Counsel ordinance is designed to address this disparity. The Detroit City Council unanimously approved a Right to Counsel ordinance in May 2022 guaranteeing an office for eviction defense to be established; however, advocates say more than $17 million is needed in the first year of the initiative that provides legal counsel to low-income renters.

"(Tenants) should be able to get legal aid and other help before it gets to court. You're gonna wait till I'm already drowning to say, 'Hey, I'm throwing you a lifeline?'" the organizer said. 

The researchers also found that 90% of the 842 CERA-approved properties with an eviction action within six months lacked a certificate of compliance at the date of CERA approval. For properties without a certificate of compliance, the city placed 20% of the landlord's eligible CERA funds in escrow until they brought the property up to code or made repairs worth the escrow amount. 

Yet, 27 of the 757 or 3% of noncertified properties that received CERA funds came into compliance between the date of CERA approval and the subsequent eviction action, signaling that landlords were rarely compelled to improve unsafe housing conditions, the researchers said.

"So long as the supply of quality housing for low-income renters remains deeply inadequate and dictated primarily by the interests of investors in the private housing market, even abundantly resourced or effectively run emergency rental assistance programs will fail to stabilize tenants," said Brantley, project manager for Poverty Solutions' housing stability and homelessness agenda. 

Brantley and Eisenberg point to policies that can address the implementation deficiencies, loopholes and landlord tactics that their analysis brought to light. They recommend establishing a mandatory pre-court eviction diversion program, requiring that landlords demonstrate good cause and code compliance in order to file for eviction, and expunging pandemic-era eviction records.

"As researchers, we urge policymakers to align themselves with and work alongside tenant-led organizations to bring about their visions for housing justice," Eisenberg said.

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Twitter: @SarahRahal_