Late on Friday before the weekend of the July 4 holiday, the U.S. Department of the Treasury released its initial findings on federal rent relief. The news was grim: Through the end of May, states had spent on average just 4% of their allotment of nearly $47 billion in emergency rental assistance funds authorized by Congress. Cities and counties have done only a little better, at 13%. With the federal eviction moratorium expiring at the end of July, time is running out for renters in dire straits.
Like other cities, Philadelphia is racing to get the money out the door. Some 35,000 renters have applied for emergency relief, and as of the beginning of July, local housing officials have approved 16% of the applications. It’s an open question whether Philadelphia can meet looming deadlines for spending portions of the money or hold out beyond the lapse of emergency protections.
Yet tenants who are behind on their rent in Philadelphia may avoid the catastrophic fate facing renters elsewhere this summer. The city has established a unique program that has already averted many hundreds of evictions and promises to circumvent thousands more. The White House, which is desperate to avoid a flood of evictions, is pointing to Philadelphia’s eviction diversion program as a model for local courts and agencies to emulate — and sooner rather than later.
“Here in Philly, the program grew out of this emergency, but we are trying to build a model that will work for tenants and the landlords in the long run, even long after Covid,” says Rachel Garland, managing attorney for the housing unit at Community Legal Services, a nonprofit that provides pro-bono legal services to low-income Philadelphia residents.
The program was designed to bring together landlords and tenants to resolve their differences in an environment with lower stakes than housing court. For landlords, evictions can be costly; for tenants, evictions can be devastating. So before they get to that final phase, the parties must go through mediation and apply for emergency rent relief. This creates a forum for finding common ground on payment arrangements, repairs and maintenance, voluntary exits and other solutions that don’t require a sheriff.
Since the program’s launch in September, landlords and tenants in Philadelphia have met in more than 2,300 sessions with mediators or counselors. So far, Philly’s eviction diversion program has led to more than 1,500 successful mediations, according to Garland, 90% of which have concluded with payment arrangements or other positive resolutions. Many more sessions are coming up now, she says, and once the federal pipeline for rent relief is fully flowing, the majority of these meetings will also resolve in win-win outcomes.
“We’re seeing the edge come off a little bit as landlords start to receive money in their accounts,” Garland says.
Philadelphia has beefed up its tenant protections over the course of the pandemic. In July 2020, the city council passed the Emergency Housing Protection Act, which required landlords whose tenants certified that they experienced a Covid hardship to enter into an eviction diversion program. The program went live September 1; the requirement for landlords was soon extended through March 2021. Effective April 1 — at the same time that $100 million in emergency rental assistance funds became available to the city — the Philadelphia Municipal Court ordered that landlords could not file for evictions without first applying for emergency rent relief as well as entering into the eviction diversion program. That requirement is in effect at least through the end of the August.
The result, according to Vincent Reina, an associate professor in the department of city and regional planning at the University of Pennsylvania, is that the city won’t allow evictions until landlords demonstrate that they’ve attempted to address overdue rent and other issues using available resources, whether it be federal rent relief or local housing mediators. In essence, Philadelphia has put the cart behind the horse — requiring landlords to try lower-cost alternatives before escalating to the hardest route possible.
“In our greater scheme of housing policy, we often focus on enforcement mechanisms while we lack the resources to create incentives,” Reina says. “If localities want to be proactive in protecting households from eviction, they can connect enforcement around evictions to those resources.”
Garland acknowledges that property owners were less than happy about the new requirements. By the time that landlords are looking to hire lawyers and file paperwork in court, the relationship with tenants is often past the point of no return. During the lead-up to this program, many landlords filed for eviction only to find out later that it wasn’t an option. Yet reopening lines of communication by fiat has helped owners and renters reach agreements that they would not or could not on their own. The program has also helped landlords recover rents during a time when finding replacement tenants was made extraordinarily difficult by the pandemic.
“The calculation for the landlord tipped to keeping their tenant rather than evicting their tenant and trying their luck with the next tenant,” Garland says.
Philadelphia’s eviction diversion program builds on its much-lauded mortgage foreclosure prevention program. Spearheaded in 2008 by then–municipal court judge Annette M. Rizzo, this program entitles any homeowner facing foreclosure to a “conciliation conference” with a housing counselor or attorney, who then negotiates with the mortgage company’s lawyers to arrange a resolution, often a loan modification, a short sale or another graceful exit. This first-in-the-nation program stopped more than 11,000 foreclosures during the Great Recession and continues to do so.
The eviction diversion program works in much the same way — with some of the same staffers, even. As the city ramped up its eviction diversion program, the nonprofit Community Legal Services re-trained mortgage foreclosure counselors and mediators on eviction issues. (Right now, mortgage foreclosures remain on hold due to a federal moratorium, which also expires July 31.) The eviction and foreclosure programs differ in one crucial aspect, however: Landlords and tenants enter into mediation before any eviction filing.
A pre-filing resolution is critical for tenants, since having an eviction filing on the books can prevent tenants from finding safe and affordable housing, even if the filing does not actually result in an eviction. Rasheedah Phillips, managing attorney for housing policy at the housing unit at Community Legal Services, says that eviction diversion is one of three elements necessary to stop evictions, along with sealing eviction records and providing counsel to tenants.
“The people most impacted by evictions are Black women, their children and African-American families, not even accounting for income,” Phillips said during a summit on evictions hosted by the White House on June 30. “This is beyond a poverty issue — it’s a racial justice and disability justice issue. All of these tools work together to address those issues.”
Philadelphia is arguably taking the lead on many of these issues. Late in June, the Philadelphia City Council passed the Renters Access Act, a ban-the-box-style law that prevents landlords from rejecting housing applications from tenants based solely on eviction history, credit scores or other records. Philadelphia also devoted $3 million to eviction diversion, which Phillips described as the seed for a right-to-eviction-counsel program modeled by other cities.
The White House is eagerly encouraging other cities to take a look at the Philadelphia project. The U.S. Department of Justice highlighted the city’s eviction diversion program in a letter sent to state courts throughout the country, and the White House enlisted Evicted author Matthew Desmond to explain how it works during its summit on evictions. The editorial board for The New York Times crowed about Philadelphia’s program back in May.
The city is hardly in the clear, though. Time is ticking for Philly renters the same as it is everywhere else. Philadelphia’s municipal court has already authorized some 2,000 lockouts in pending eviction cases, with at least 900 more orders looming once applicable eviction moratoriums expire. Garland says that the Times editorial missed the point when it praised Philadelphia’s eviction diversion program as it condemned state and federal bans on eviction. Housing agencies and courts need time to set up the infrastructure for diverting evictions. Or to ensure landlords that relief is coming: Billions of dollars in federal rental aid are idling, and even a successful diversion effort relies on that money moving in time. The federal eviction moratorium won’t hold back courts for much longer.
“The moratoriums are what enabled us to do this,” Garland says. “We wouldn’t have been able to build the program if the moratorium hadn’t been in place.”