Can Affordable Housing Be a Safety Net? Lessons from a Pandemic

abstract. The COVID-19 pandemic posed an unprecedented challenge to housing stability, with mass unemployment and societal disruption leaving millions of tenants struggling to make rent. Aggressive public intervention avoided the worst outcomes, but the effort to protect renters exposed the mismatch of existing affordable-housing programs to moments of short-term crisis, whether personal or nationwide. These programs are not designed to serve as safety nets or to act nimbly during market upheavals; they are primarily targeted to serve people facing chronically low incomes over the long term. Nor can the new emergency programs created midpandemic straightforwardly be made permanent. But while affordable-housing programs are not currently a safety net—and indeed, cannot easily serve this function—the pandemic also offers valuable insights into what building that housing safety net would take.

Introduction

The COVID-19 pandemic served as an unprecedented stress test for the nation’s welfare policies. More than twenty-two million Americans were abruptly thrown out of work, with the unemployment rate peaking at the highest level since data collection began in 1948.1 Families were threatened by disease and death, facing challenges physical, spiritual, and financial. The everyday systems on which we all rely, from food access to childcare and education, were significantly disrupted. The welfare state’s response—in many ways avoiding the worst possible outcomes—was both remarkable and instructive. These most unusual, disastrous two years offer important lessons about how our laws and policies function during normal times. My goal in this Essay is to explore some of those lessons in one domain: affordable rental housing.

Protecting renters quickly became—for good reason—one of government’s top priorities in responding to the pandemic’s economic fallout. By one prominent estimate, after the profound income shocks caused by COVID, ten million renter households were behind on rent and at risk of eviction, owing a collective fifty-seven billion dollars as of December 2020.2 Black, Latino, and Asian families were disproportionately in arrears.3 Evictions can be socially disastrous in the best of times, leading not only to ongoing housing instability and perhaps worse housing conditions,4 but also to cascades of job loss,5 worse mental and physical health,6 and worse educational outcomes for children7—and concerns about crowding and contagion prompted special concern for housing stability during the pandemic.8 States, cities, and the federal government each acted aggressively to keep people housed, improvising with both regulatory strategies and public spending. The work to understand these efforts has just begun, with scholarship taking stock of the federal programs created,9 new tenant protections,10 changes to housing court,11 the judicial response to eviction moratoria,12 and critiques of gaps in early relief packages,13 as well as broader examinations of affordable-housing policies14 and the overall welfare state.15

This Essay asks a different question: whether current affordable-rental-housing programs, and specifically the federal government’s largest rental programs, can effectively protect renters from short-term fiscal shocks. Some scholars and policymakers have already observed the mismatch of our current rental-assistance tools to periodic fiscal instability.16 I argue that the pandemic experience underscored the reality that these programs are focused overwhelmingly on people who are chronically low income. Existing programs are a poor fit for protecting renters from shorter-term fiscal distress—whether a job loss stemming from a historic pandemic, a more ordinary loss of income like after a divorce or nonpandemic layoff, or an unexpected expense like a medical bill or broken vehicle—but further, they are not easily adapted to serve that purpose.

Put differently, affordable-housing programs do not perform the full set of functions we ask of the welfare state. Theorists have enumerated many overlapping goals for welfare-state programs, including relieving the worst distresses of absolute poverty (as through means-tested and in-kind assistance), promoting economic equality (as through redistributive taxation), promoting social solidarity (as through universal services like public education), and eliminating individual dependence on markets and traditional social structures like church and family (as through certain universal benefits).17 American affordable-housing policies serve each of these functions to varying degrees, attempting to “limit the domain of inequality”18 by providing safe, quality housing to people regardless of their income, and even aiming to foster residential integration.

But the welfare state also serves another (overlapping) function: insuring against risk and smoothing incomes in ways the private market cannot.19 This social-insurance role—which quantitatively dominates federal spending20—redistributes across individuals’ lifecycles, providing support at moments that are predictably low income (like old age and childhood) and at moments of unexpected need (like after unemployment, poor health, or divorce).21 The COVID pandemic—an unparalleled moment of unexpected need—makes newly clear that current rental-assistance policies are not designed as social insurance.22 They are not intended to be a “safety net,” in the sense of catching people who stumble.23

This focus on long-term redistribution for people facing sustained poverty limits existing policies’ impact. Shorter-term spells of poverty are extremely common, even outside a global pandemic. The median poverty spell lasts less than five months—and though some households quickly cycle back into poverty, many others do not.24 And while most people are not, at any given time, below the poverty line, a majority of Americans will experience poverty before they turn sixty-five.25 Moreover, income volatility itself, in addition to persistently low incomes, is a major contributor to homelessness.26

These forms of deprivation may fundamentally be better addressed by means other than housing assistance.27 There are inherent, though not insuperable, challenges to protecting households against short-term financial shocks specifically through rental-housing programs. Recognizing what role our rental-assistance programs actually play in protecting tenants and in the broader welfare state allows us to better understand the core competencies and limitations of affordable-housing policy, both as currently constituted and structurally. In turn, that understanding can help us to fill the gaps left for low-income renters, whether by overcoming those challenges to expand and improve on existing programs or by better situating rental assistance among complementary forms of assistance.

To that end, I examine how the major federal affordable-rental-housing programs operated during the pandemic. The two most significant preexisting programs28—the tenant-based voucher program and the project-based Low-Income Housing Tax Credit—served their beneficiaries well by protecting them from economic disruption but were poor platforms for new, pandemic-specific interventions. And the new Emergency Rental Assistance programs designed specifically for the pandemic, though heroic in their scale and effort, came late and slowly—a predictable result of being built from nothing, on the go—and cannot readily be made permanent. None provides a sturdy foundation for addressing renters’ temporary fiscal distress. If the government is to protect people from this form of housing instability, different models are needed.

I. covid and tenant-based rental assistance

I begin this analysis with housing vouchers. Vouchers are not only a large and effective form of rental assistance, but the most flexible form offered by the federal government—and, therefore, the one that should be most adaptable to this unprecedented moment. In ordinary years, Housing Choice Vouchers (HCVs or, formerly, Section 8) are the primary form of rental assistance that flow to tenants renting on the private market, rather than to designated affordable developments. They support around 2.5 million households, covering the difference between what a household owes in rent and what it can afford to pay towards rent, based on the household’s actual income.29 Vouchers are a cost-effective form of rental subsidy, can serve the very poorest households, and nearly eliminate homelessness for recipients who can successfully use them.30 Though they have several shortcomings, they are essential as a tool for securing housing for people in poverty.31 For those who already had vouchers going into the pandemic, the pandemic’s economic shock was substantially cushioned as the value of their vouchers rose along with their increased need.32

Given HCVs’ power to transform low-income households’ ability to afford rent, many advocates have called for expanding or universalizing the voucher system to create a stronger housing safety net. Rental assistance is not currently an entitlement, nor is it funded adequately to provide all eligible households with a voucher. Only one-fourth to one-fifth of eligible households receive federal assistance; vouchers are rationed through lotteries and years-long waitlists.33 This is an enormous hole in the welfare state and one that is essentially unjustifiable in its utter arbitrariness.34 No wonder, then, that guaranteeing rental assistance to all eligible households has been a longstanding goal of affordable-housing experts—even crossing partisan and ideological lines35—and, more recently, a frequently proposed response to the needs exposed by the COVID crisis.36

Expanding the voucher system is a vital reform, one that could make rental assistance simultaneously more equitable and more efficient. It should happen. But HCVs are not especially well suited to acute crises, whether personal or national. And one lesson of the pandemic has been that even with meaningful changes, responding to these crises may not be HCVs’ most natural role.

Scholars have identified three primary reasons why HCVs fall short as a safety net.37 First, their nonentitlement status means that their availability does not automatically increase with need. Indeed, voucher spending was essentially flat for nearly two decades prior to the pandemic, despite the profound economic disruption of the Great Recession.38 With Congress rarely authorizing more vouchers, households cannot rely on their availability. Second, vouchers’ administration divorces the moment of assistance from the moment of need. As noted above, voucher applicants generally must endure long waitlists before receiving assistance. In Los Angeles, the waiting list for a voucher has stretched to eleven years long.39 These delays are inexcusable for people facing long-term poverty (and are administratively burdensome to boot). But for someone suddenly injured or unemployed, this level of delay renders the program nearly unusable. These established claims on future vouchers also leave governments less able to deploy HCVs in response to new demands, as the targeted beneficiaries would have to jump the line. Third, landlord participation in the voucher program is largely voluntary. Even in the minority of states and cities that prohibit landlords from discriminating against a voucher holder’s source of income, landlords can effectively price, maintain, or market their properties to keep them out of the voucher program.40 The payment standards set by the Department of Housing and Urban Development (HUD) can also limit voucher holders to lower-rent neighborhoods.41 The limited set of apartments available to voucher holders, paired with other bureaucratic frictions built into the search process, leaves many apartment hunts slow or unsuccessful. The last national study found that thirty percent of voucher recipients failed to use their voucher within the permitted 60- to 120-day limit.42 The HCV program in its current form cannot be an effective safety net because it provides no guarantee that a household in need will 1) get a voucher, 2) when they need it, and 3) find somewhere to use it.

One new pandemic program in particular demonstrates just how difficult it would be to retool housing vouchers into a fast-moving safety net. The American Rescue Plan Act (ARPA) created a new tool called Emergency Housing Vouchers (EHVs).43 Though modeled after HCVs, EHVs incorporated new features to respond to the pandemic (as well as to homelessness) more directly. First, EHVs went around existing voucher waitlists. Housing authorities were not even permitted to select recipients off their waitlist.44 Instead, housing authorities were to identify eligible households in acute need—people presently or at risk of being homeless—through local antihomelessness systems, which were thought to move more quickly.45 To give tenants access to more apartments, EHVs allowed for higher payment standards, provided recipients search assistance (a tool that has been shown to improve outcomes46), and offered a faster inspection process (addressing one of landlords’ most common criticisms of ordinary vouchers47). EHVs also permitted tenants to prove their eligibility more easily through self-certification.48 All told, EHVs partially address each of the ordinary limitations of the HCV system identified above: they infuse new resources in response to new need, are meant to be issued immediately and regardless of waitlists, and include features to encourage broader apartment availability.

Yet these changes were insufficient to generate anything resembling an “emergency” response (their name notwithstanding). Too few EHVs have been used successfully to date. ARPA was signed into law in March 2021, and it took HUD until early June to finalize program details and allocate funds to local authorities.49 Yet as of mid-April 2022—a year later—just one-quarter of EHVs had actually been used to pay rent.50 In the biggest cities, where high rents and large numbers of renters create the most pressing need, the numbers were even worse: the city of Los Angeles had been awarded 3,365 EHVs, had issued just 1,807 of those to households, and had only helped 81 households—4.45% of issued vouchers—successfully lease an apartment.51 In New York City, just 2.68% of vouchers had been successfully used.52 Nor was the issue limited to these intensely constrained housing markets: many states with ample stocks of lower-rent housing, like Indiana and Arizona, performed just as poorly.53 In recent months, the rollout has progressed: by mid-October, 51.4% of EHVs had been successfully used to lease an apartment, with that figure at 20.7% in New York City and 15.3% percent in Los Angeles.54 But still, this leaves almost half of all EHVs as only a promise of benefits, not actual assistance, and means that most relief will arrive after the most acute period of need.

Remarkably, this is in some ways a success story. The EHV rollout marked the fastest-ever utilization of any new federal voucher program, according to HUD officials.55 It did so while targeting the highest-need households and in the face of pandemic-related logistical and staffing challenges for agencies. Understanding what worked with EHVs will be a fruitful area of research, and the jurisdictions that best managed to quickly turn their vouchers into actual assistance deserve both recognition and further inquiry.

But those successes just emphasize how mismatched the existing voucher model is to making vouchers a true safety net. Even when new vouchers were made available to match new need—and with seemingly successful features to streamline administration and encourage landlord participation—there remained prolonged delays before assistance actually reached tenants. Vouchers still rely on a slow, multistep process in which tenants must first apply and prove eligibility, receive their voucher, and then find an available, eligible apartment that meets their needs with a willing landlord. An expanded voucher program, even as an entitlement automatically budgeted to meet all need, would likely still move on a timeline of months or years, not days or weeks. Providing a rental-housing safety net would require either a more sweeping transformation of the voucher framework or a separate, complementary policy.56

Congress, recognizing this, focused its housing-specific COVID relief on a new program: Emergency Rental Assistance (ERA).57 Unlike housing vouchers, ERA is primarily intended to pay off rent arrears, not provide long-term prospective assistance. As an emergency program, it primarily aims to keep people in their current homes rather than find them new ones. Importantly, ERA was created while the federal eviction moratorium was in effect, and many states and cities built additional anti-eviction protections into their ERA programs, creating a complementary, two-pronged strategy for keeping people housed.58 In broad strokes, ERA is a “safety net” program meant to catch renters who have faltered but do not need permanent supports to secure adequate housing; it is most helpful to people who will, with ERA’s fresh start, again be able to afford their rent. Incredibly, Congress appropriated over $46.5 billion to ERA, the lion’s share of the entire estimated rental arrearage nationwide.59

It is still too early to draw many meaningful conclusions about how ERA worked. Existing research has, so far, been limited to noncausal studies examining how quickly different ERA programs distributed funds, preliminary information from self-reported surveys, and some additional data on the demographics and neighborhood characteristics of applicants in New York and California.60 This research has yielded insights such as the importance of reducing administrative burdens for applicants (for example, by eliminating extensive documentation requirements),61 methods of allocating and reallocating funds across jurisdictions,62 and best practices for governments reviewing applications (using a more bureaucratic “assembly line” process rather than an individualized, “case management” approach).63 But such data, as the researchers freely acknowledge, show little about how results vary across different legal, political, and economic contexts, and essentially nothing about how those funds impact individual households or larger neighborhood and market conditions.64 Unpacking these questions will ultimately provide a wealth of information, especially given the independent operation of hundreds of state and local programs.65

For now, though, we can observe how inadequate this kind of crisis-moment lawmaking is at providing a housing safety net. Congress demanded that states and cities, with essentially no experience or infrastructure to do so, stand up ERA programs amid a pandemic.66 Of the programs created in 2020, nearly three-quarters were brand new, while almost all the remainder were dramatic transformations of small-scale programs.67 Governments launched programs quickly, without adequate staffing or technological capacity, leaving rollouts bumpy.68 They had to iron out details and learn best practices on the fly, leading to successive rounds of federal guidance that caused confusion on the ground.69

Yet despite this haste, the rollouts were still too slow. Of the $25 billion in ERA funds appropriated in December 2020, just 12% had been spent by June 2021.70 Spending accelerated thereafter, but still, even by March 2022, just $26 billion had made it to households, a bit over half of what was appropriated.71 While funds have since begun flowing steadily, it took a long time to get to this point. A study published in April 2022 found that one-third of all ERA applicants had received assistance, one-quarter had been denied, and a full 38% were still awaiting a decision.72 Federal, state, and local officials worked diligently and creatively to build programs from scratch, but that task was a difficult one indeed. States and cities simply lacked the bureaucratic capacity.

It would be one thing if these were necessary, one-time growing pains, with issues now resolved and questions all answered. But they aren’t. The COVID ERA programs are set to shut down; many already have.73 If similar assistance is provided again, new staff will have to be hired and trained, new relationships built with nonprofit partners, and new landlords recruited; the infrastructure of assistance will have been disassembled.

Nor could Congress simply choose, now, to keep its ERA programs in place. These were inherently temporary. The most difficult questions in designing a permanent program to pay off rent arrears concern how to target those in need. Overbroadly paying off all unpaid rent creates moral hazard for households to unreasonably avoid payments or take on rent obligations they could never afford. Accordingly, an arrears-paying program must carefully determine what types of nonpayment trigger relief, how often such relief should be granted, and how to calibrate households’ reliance on this safety net.

For a temporary pandemic program, these issues could largely be avoided. Because COVID was a shared crisis outside anyone’s control (with less stigma for those who fell behind), eligibility could be granted broadly to anyone suffering loss of income from this singular event.74 And because the largest ERA programs were created almost a year into the pandemic—well after the bulk of job losses—moral hazard posed less concern.75 These features made ERA possible. But they also mean that the COVID-era programs cannot easily be made permanent. Any similar relief could only be created well into a crisis, not beforehand. In creating a permanent safety net for renters, the COVID ERA programs will offer much to study but far less to copy.

This is not to diminish the incredible importance of emergency rental assistance. Early predictions of an “eviction tsunami” throwing millions from their homes were avoided, in part because of the federal infusion of nearly fifty billion dollars (along with continuing state-level eviction moratoria and other tenant protections).76 People stayed in their homes, and avoided impossible trade-offs between rent and other necessities, because of these funds. But unlike, say, unemployment insurance, which began flowing within weeks of job losses77 (and still was fairly criticized as a creaky, antiquated system78), emergency rental assistance could only come late in the crisis. Neither the standing voucher program, the modified EHVs, nor the new ERA programs—though each served its own function—provides an off-the-shelf model for ensuring housing stability to those facing the next economic shock.

II. covid and project-based rental assistance

The main federal subsidy for creating new project-based affordable housing (i.e., for specific affordable buildings or units rather than for individual tenants) fared little better as a tool for pandemic-specific relief. The Low-Income Housing Tax Credit (LIHTC) is the primary source of subsidy for new affordable-housing development, supporting approximately 110,000 units a year and serving as the financial platform for most additional federal, state, and local investments in affordable housing.79 Like other project-based subsidies, LIHTC is meant to increase the stock of affordable homes over the long term; it requires homes to remain affordable for thirty years, though some states require longer affordability periods.80

But LIHTC is not meant to increase the affordable-housing stock quickly. Like HCVs, LIHTC funds do not automatically increase based on tenant need. Further, LIHTC deals are cumbersome by design, intentionally layering stakeholders into a deal so that each monitors the others’ performance. Whether this complexity is ordinarily a price worth paying has long been debated.81 But it clearly rendered LIHTC a poor tool for seizing affordable-housing development opportunities created by the pandemic. As evidence, I examine a specific set of these opportunities: the efforts to convert distressed hotels into affordable housing.

The pandemic sparked significant interest in using hotels as a source of long-term affordable housing.82 After all, during the early pandemic, hotels were essentially empty as tourism and business travel evaporated. And hotels are already designed to provide shelter, leading many to hope that conversions would require minimal renovations.83 Hotel-to-housing success stories can be found across the country.84

The clear leader in converting hotels into housing was California, whose “Project Homekey” conversion program has been widely celebrated.85 First enacted in June 2020, Project Homekey primarily funded the conversion of commercial buildings (largely hotels) to affordable housing for people facing homelessness. In its first round of operations, Project Homekey created six thousand units of housing at about half of California’s normal affordable-housing costs.86 This was a remarkably cost-effective program.

California achieved these savings in large part because it designed Project Homekey to act fast. Moving quickly allowed the state to acquire distressed properties before it became clear that the hospitality industry would recover. But more to the point, California had to act fast. Homekey was funded through COVID-relief funds that had to be spent by the year’s end; this requirement gave just six months for California to create its program and allocate the funds and for developers to close their financing and complete renovations.87 Some projects had to move in just three months.88 Accordingly, California swept aside many of the toughest barriers to affordable-housing development, including many local zoning and environmental reviews.89 It created an expedited application process, allowing developers to apply first and submit supplementary documents later, rather than all at once.90 And, of most relevance to this Essay, Project Homekey offered grants that did not rely on LIHTC.

Ordinarily, almost all state and local affordable-housing funds are stacked on top of LIHTC. The average California supportive-housing development—analogous to a Homekey project—uses about six separate sources of funding, of which LIHTC is usually one.91 Coordination across these different sources of funding—each with its own timelines and independent requirements—is slow and expensive. This is by design. LIHTC is built around a vision of decentralized, public-private governance in which each stakeholder monitors each other’s performance: these transaction and compliance costs are the perceived price of avoiding mismanagement. But the longer and more complicated the process, the higher the costs: more fees to lawyers and accountants to structure complex deals, more interest and insurance paid while projects gestate, more of everyone’s time, and more uncertainty throughout.92

Project Homekey avoided much of that. By providing funds in a single, upfront grant—rather than tax credits that needed to be syndicated and sold after occupancy—Homekey minimized these costs. Developers have highlighted this as one of Homekey’s most important advantages over traditional affordable-housing development, sometimes even more so than the regulatory relief provided.93 As one public housing authority director explained, “If you’re doing a project that is just Homekey . . . and doesn’t have other tax credits or traditional affordable housing resources, it’s much cheaper than doing it the traditional route.”94

Project Homekey could move projects much faster than even aggressively streamlined conversions built on the LIHTC platform. Take, for example, the conversion of a hotel into permanent supportive housing in Brockton, Massachusetts, which has been held up as another successful case study.95 Like the Homekey projects, the Brockton project could use state law to avoid zoning review and secure a more streamlined administrative process; it also came in dramatically under average costs.96 But even so, the Brockton project—which included LIHTC funding—took ten months to secure and close on its financing, with more time needed to actually renovate.97 This was much faster than the two to three years typical for this kind of project,98 but still much slower than Project Homekey.

And, of course, most LIHTC projects are not streamlined. Among other things, the LIHTC statute requires that local governments be given an opportunity to comment on any proposed development in their communities.99 Many states go further, prioritizing projects with affirmative support from local governments and neighborhood organizations.100 Such local approvals require time-consuming outreach and negotiations that can stretch for months or years.101 These core program features—which Project Homekey reversed, waiving local review processes altogether—leave LIHTC ill equipped to create affordable housing quickly.

It remains to be seen whether Project Homekey’s speed will come at a long-term cost. LIHTC’s design reflects a knowing response to past generations of affordable-housing development, which showed early promise until long-term issues with maintenance and fiscal sustainability overtook them.102 Moreover, even if California could, at a unique moment, go without LIHTC’s monitoring devices, not all places or projects necessarily can.103 But Homekey’s demonstrated ability to create housing faster highlights the stakes of LIHTC’s design choice. To avoid long-term risks, we pay more for affordable housing and build it slower. Whatever the merits of that trade-off in normal times, it leaves affordable-housing production—through the conversion of unused properties or otherwise—an especially difficult strategy for responding to sudden needs or opportunities that arise during moments of crisis. In such a moment, California built faster and cheaper by excluding what is normally the most significant source of federal funding for affordable housing.

III. implications

Affordable-housing programs revealed their limitations as safety nets during the pandemic. This is not to slight their profound importance to recipients as long-term income supports, platforms for economic mobility, and protectors against housing instability. It is only to acknowledge that preexisting programs were never designed as safety nets protecting against short-term fiscal shocks, and that the pandemic ERA programs were built fast and not to last. But this experience also points (tentatively) to certain inherent challenges in using redistributive spending to specifically address short-term housing instability—and to when, and how, we should strive to overcome those challenges.

A. The Structural Challenge of Short-Term Housing Assistance

A central shortcoming of each of the programs discussed is their timing. They can take months or years to provide assistance to households in need. This is inefficient, ineffective, and often inhumane for people who are chronically low income, but it simply does not work for more acute instances of housing instability. And while streamlining reforms and better administration might be able to meaningfully accelerate assistance, to some extent, these slow speeds are inherent to any effort to subsidize rental housing, specifically.

For new affordable-housing production, the timing problem is plain: it just takes time to acquire a site and construct a building. New production will only rarely be a plausible response to short-term housing needs, although the allocation of preexisting facilities (whether public housing or homeless shelters) can be.104 Moreover, since buildings are meant to last decades, taking the time to ensure quality is critical: a building that is badly designed, maintained, or sited can hurt its residents for generations.

But even for tenant-based housing subsidies, the challenges of timing are built into the nature of the rental-housing contract, which governs a noncommodity product leased for the long term. Every apartment is a bit different: its features, its condition, its location, the timing of its availability, and so on. On top of tenants’ individual needs and preferences for their home—decisions which must be made for the long term—landlords also assess tenants as individuals: whether they seem likely to damage the unit or fail to pay, whether they seem easy to work with or likely to “fit in” at a building. Rental housing involves a relational aspect between tenant and landlord, not just a one-time transaction.105 All this necessary idiosyncrasy means that acquiring an apartment involves lengthy and uncertain searches (and for project-based affordable housing, complicated questions of matching across units106).

At the same time, once housing is leased, renters are locked into that level of consumption. A renter often cannot cut back on her housing consumption for a month or two: paying less would require either moving (which may cost more in a pecuniary sense, not to mention a social one) or risking eviction. That is why, for many, “the rent eats first,” with households cutting back on other basic necessities (or taking on burdensome debt) to make rent.107 Housing is a lumpy good,108 especially when you care about housing stability. Eviction can happen quickly,109 and all at once: while some renters can work out an alternative arrangement with a landlord110 or enter into a probationary status,111 others just lose their home, whether through formal proceedings or an informal forced move. Even the beginning of the eviction process carries serious consequences for renters, including long-term barriers to finding future housing.112 Ideally, intervention would occur before the eviction is filed. With payment due monthly, any serious disruption in the ability to afford rent can have near-immediate consequences. In other words, housing too often can be lost quickly and acquired slowly. Programs may need to focus on one or the other timescale.

Assistance focused on eviction prevention, moreover, must arrive quite quickly to achieve the desired outcome. Comparing affordable-housing spending to other social programs makes clear the challenge. For example, if nutrition benefits come too slowly, people may go hungry—which, it goes without saying, they should never have to—but the lack of benefits in one month does not affect the ability to provide benefits the next month. For a person who is evicted, though, the receipt of benefits the following month has come too late; the slow rollout of benefits imposes an irreversible long-term consequence and a change in legal status. Likewise, unemployment insurance compensates workers for their loss of income; it doesn’t prevent the layoff. Fast payments are critical, but there is no attempt to provide assistance before the employer-employee relationship is terminated. Eviction prevention aims to maintain the landlord-tenant relationship, without interruption. This is, structurally, a tough needle to thread.

There is therefore some logic to the existing arrangement of social programs. Affordable-housing policy may be focused on providing long-term benefits to people with chronically low incomes because it is well suited to doing so. Housing is built or rented for the long-term, and housing subsidies more comfortably match those time horizons. Moreover, the goal of setting people up in stable housing makes finding the right housing more important. Much of the argument for providing in-kind housing benefits at all, rather than cash, is to focus on neighborhood effects, whether by helping people move to better homes and neighborhoods or revitalizing distressed areas.113

In contrast, safety-net programs focused on keeping people in their current homes largely substitute for savings as a buffer against financial shocks. They are much more readily replaced with income supports. Indeed, income supports (whether unemployment insurance, cash benefits, or even health insurance that covers large expenses) can prevent or mitigate financial distress upstream, whereas short-term rental assistance may come only after that distress has become acute. The policy evolution of our current rental-assistance landscape—which has focused on longer-term supports—may to some extent reflect the underlying nature of housing markets and housing assistance.

B. Building a Housing Safety Net

The difficulties of providing housing as a safety-net program does not mean, though, that it ought not be offered. It should be, at least absent some fuller transformation of the welfare state. Providing a safety net specifically for housing offers political and practical benefits. Politically, in-kind redistribution is usually more popular and politically stable than pure cash transfers.114 Practically, housing assistance offers a second chance to catch those who fall between the many cracks of our limited, fragmented system of income supports.115 Even if each program is incomplete, the overlap helps more people—especially the women, children, and people of color at greatest risk of housing instability116—receive some protection. Moreover, there is compelling evidence that short-term assistance, specifically targeting those who do not need permanent supports, can dramatically and cost-effectively reduce homelessness.117

To this end, the pandemic experience offers several possible takeaways about how to improve the housing safety net. First, the pandemic has demonstrated that doing so will require creating an ongoing relationship between renters (or landlords) and the government. Certainly, creating new emergency programs only after crises emerge guarantees that relief will come too late. But the same is true of any system that requires establishing eligibility, determining the amount of assistance, and coordinating with landlords in the narrow window after a loss of income or unexpected expense and before rent comes due. Right now, most tenants have no relationship with any affordable-housing program or agency. The state, therefore, may need to become more involved in the landlord-tenant relationship ahead of time, just as employers report their workers’ earnings and pay into unemployment insurance on a regular basis.118

Almost by definition, creating this preexisting relationship would require broadly universalizing assistance. Everyone must be “in the system,” even those who, for now, do not need help. Once in place, though, the ongoing nature of that relationship would also offer new levers for social policy. For example, unemployment insurance is priced to discourage layoffs;119 a rental-assistance program might similarly incentivize landlords to avoid unnecessary evictions or otherwise improve practices.

Precisely how to structure a program is beyond this Essay’s scope. Any broad guarantee of assistance raises difficult questions specific to emergency assistance—in particular, how to ensure a safety net is reliably available without creating various moral hazards120—as well as all the ordinary complexity of policy design, though various promising concepts have been developed.121 One notable recent proposal, for example, would offer tenants access to prefunded accounts usable only for rent shortfalls, but otherwise within beneficiaries’ control.122 Regardless of whether this is the right model, though, the broader takeaway is that attempting to establish new relationships between the state, landlords, and tenants at the moment of need—as existing programs do—starts the process already behind.

Second, if the provision of affordable housing can’t be made fast enough to outrun the eviction process, eviction must be made slower.123 More specifically, regulatory interventions addressing housing instability should be integrated with rental-assistance programs. This was one of the other successes of pandemic-era housing policy: eviction moratoria bought households the time needed to access emergency rental assistance (or otherwise reorder their affairs). Indeed, expressly linking changes to the eviction process with rental assistance was a hallmark of both federal and state policy. Encouraged by Treasury guidance, many state and local jurisdictions (including state court systems) required landlords to seek rental assistance before filing for nonpayment evictions, provided eviction notices to ERA providers for immediate outreach, and created other important eviction diversion strategies, with promising results.124 Even Justice Kavanaugh, in declining to enjoin the Center for Disease Control and Prevention’s eviction moratorium on its first trip to the Supreme Court, recognized the close link between these two strategies.125

Legal scholars and economists sometimes paint regulatory strategies for helping low-income people as misguided substitutes for redistribution, including specifically in low-income housing policy.126 But redistribution is not a frictionless process. Slowing down the eviction assembly line—a regulatory intervention—can open up possibilities for more effective redistribution. Or, to put it differently, an important benefit of tenant protections, apart from any substantive legal entitlements to remain in a home, is the time they provide tenants.127 That time can be vital for direct financial supports to work effectively.128 Whatever the merits of slowing evictions as a stand-alone reform—a context-sensitive empirical question129—doing so may undergird the successful distribution of rental assistance.130 In this sense, regulation can be a complement for redistribution, not an alternative to it.

Third, on the project-based side, the pandemic experience underscored the value of speed for keeping down costs and allowing affordable-housing developers to seize market opportunities. Streamlining land-use reviews and other administrative processes and simplifying capital stacks (including through providing more funding upfront) can each help build more affordable housing at a lower cost. The last two years do not speak to the potentially significant costs of such speed—it remains to be seen whether Project Homekey developments, for example, wind up financially unsustainable or poorly maintained—but they demonstrate the magnitude of the benefits.

Finally, in moving toward a stronger housing safety net, cities and states have a valuable role to play. Subnational governments, I have argued elsewhere, are poorly positioned to provide long-term rental assistance because their fiscal cycles leave them unable to sustain that spending during recessions.131 But housing safety-net programs, which do not need the same level of long-term commitment, are a better fit for states and cities—and, indeed, have historically been more prevalent at the subnational level.132 Meanwhile, state and local experimentation during the pandemic generated notable success stories, from Project Homekey to a slew of creative programs integrating rental assistance with the eviction legal system. Federalist experimentation, it appears, can generate much-needed new ideas here. We do not have an off-the-shelf model for a rental-housing safety net. Cities and states might creatively borrow from the panoply of non-housing-assistance programs created during the pandemic—some of which were structured with far less administrative burden than housing programs were—to improve short-term rental assistance or create something new altogether. The federal government’s fiscal capacity remains irreplaceable for any large-scale redistributive scheme, of course, but local policy innovation should be encouraged.133

Conclusion

The COVID pandemic provided a harrowing reminder of how fragile financial stability can be: how events utterly outside our control can suddenly leave a family without a paycheck or caring for a sick loved one or for a child home from school. For those already vulnerable, such shocks are particularly devastating. But the American welfare state does little specifically to ensure that, in the face of such economic shocks, renters can stay housed. The United States has long-term affordable-housing programs for those who need durable income supports and mechanisms to mitigate economic instability upstream, like unemployment and health insurance. That coverage, however, is incomplete. The pandemic experience has underscored the importance of a safety net for renters facing a sudden economic crisis—and the poor fit of existing programs to that function. For the nation, the next crisis will come eventually; for some renters, it will arrive today. One way or another, we should be ready to catch those who fall.

Assistant Professor of Law, University of Michigan Law School. Thank you to Greg Baltz, Vicki Been, Ingrid Gould Ellen, Suzanne Kahn, and Charlie McNally for their invaluable suggestions on this Essay. Thank you also to the editors of the Yale Law Journal—and particularly Nathan Cummings—for their enormously careful assistance, as well as for assembling this collection of papers on urban law in COVID’s wake.