by Odell Murry
MAI Financial Services

A movement is under way across the U.S. for city governments to provide legal representation during eviction proceedings for tenants who may not be able to afford lawyers. While there have always been federal and local efforts to provide legal aid for tenants, the new effort represents a major shift in policy to codify a concept that major municipal governments must provide such services, much as they provide public defenders for indigent individuals in criminal proceedings.

Only a few major cities have adopted or are considering “tenants’ right to counsel” measures, but they might well set the tone for others. This may lead, soon, to the creation of a new civil right. Lenders and landlords must prepare for the change and engage with municipal leaders to ensure it does not escalate into an unfunded mandate for landlords to bear tenants’ costs.

Historically, the civil eviction process has been a struggle between landlords and tenants.

Studies find that between 85 percent and 90 percent of landlords, large and small, have lawyers with them for the eviction process. Most tenants do not.

This legal mismatch produces predictable results. Many cases don’t make it into the courtroom. They may be resolved in hurried hallway negotiations between the landlords’ lawyers and tenants with limited knowledge of their legal rights, or even the English language. Under such circumstances, most settlements favor the landlord.

It’s difficult to gauge how many tenants are caught up in this process. Most tenants just move away after receiving eviction notices, so no public record is created. And landlords’ unlawful detainer cases are rarely contested.

New York, San Francisco, and Los Angeles

This new effort to provide tenants with legal counsel has begun, not coincidentally, in two cities where rents are highest – San Francisco and New York City. New York City government instituted a tenants’ rights measure in 2017, and San Francisco followed with an even more expansive measure passed by ballot initiative by a wide margin in 2018.

A 2017 Pew Charitable Trust study states that New York City has provided varying levels of legal assistance to low-income tenants since the nineties. Funding ebbs and flows depending on city budgetary constraints and the political focus of those in power. A New York City Office of Civil Justice report states that NYC has increased legal aid tenfold under its current administration, and the percentage of tenants with legal representation during eviction proceedings grew from just 1 percent in 2013 to 27 percent in 2016. Meanwhile, evictions decreased by 24 percent in 2015 and 2016.

Armed with such statistics, the New York City Council passed a tenants’ right to counsel measure in July 2017 with a veto-proof majority, and it was signed into law in August 2017. The law provides $155 million over five years to eventually ensure that any New York City renter who earns 200 percent of the federal poverty line (just under $50,000 for a family of four) or less can receive free legal representation in housing court during eviction proceedings.

San Francisco’s law, a ballot initiative passed by a sizable majority in June 2018, goes even farther. By July 2019, the city must provide legal assistance throughout eviction proceedings to almost any San Francisco tenant, regardless of income. The assistance must start within 30 days after the tenant receives an eviction notice.
Other municipalities have taken notice and are considering their own measures.

These include:

  • Los Angeles, where in 2018 the City Council unanimously passed a motion to create a plan similar to those of New York City and San Francisco.
  • Washington D.C., which, in 2017, created a $4.5 million grant program to pay legal fees for families in eviction proceedings, with eligibility criteria similar to the New York City program.
  • Philadelphia, where the city government voted in 2017 to allocate $500,000 for a legal defense fund for low-income tenants facing eviction.
  • Denver, where city councilmembers in 2018 created a pilot program funded by just over $131,000, with eligibility criteria similar to the New York City program.

And the New York City Council is now taking a hard look at expanding its program to include tenants who make 400 percent of the federal poverty line or less.

Why Now

Tenants’ rights movements have been around as far back as there have been tenants, but it appears we may be reaching a tipping point on the concept that a tenant deserves legal representation during eviction proceedings. The right to counsel is firmly enshrined in U.S. legal code for criminal, but not civil matters like evictions. Even the right to counsel in criminal cases was a long time coming, with aspects of this right still being argued today.

The Sixth Amendment of the U.S. Constitution states, “In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defense.”

While the amendment, which was ratified in 1789, seems to provide those accused of a crime with the right to due process under the law, it wasn’t clear for many years whether that due process included the right to a lawyer for those who couldn’t pay for one. In 1853, the Indiana Supreme Court ruled that an indigent person accused of a crime should be afforded an attorney. For decades afterwards, states did not have to cover the cost of legal representation for low-income defendants, so there was sometimes a patchwork network of pro-bono lawyers who made themselves available. Slowly, Supreme Court decisions began to require jurisdictions to provide counsel. In 1963, Gideon v. Wainright solidified this right. The Court ruled unanimously that states must provide an attorney to criminal defendants unable to afford attorneys.

To this day there are arguments on what this right means, what true legal representation should look like, and who should pay for it.

Public Defenders for Renters

There is growing awareness that those in poverty fare worst in civil proceedings, be it traffic court, family court, or small-claims court. There are several reasons, including that low-income earners may not understand their rights within the justice system, may not be able to take time off work to appear in court, or, perhaps more important, lack the means to hire legal representation. A 2015 report commissioned by the National Center for State Courts and State Justice Institute found that in over three-quarters of all civil cases in the United States, at least one litigant (usually the defendant/tenant) lacked legal representation.

Conventional wisdom has been that indigent individuals should have free legal representation in criminal courts because the stakes are so high: the accused is in peril of prison. Those arguing that low-income individuals should be represented in eviction cases may argue that the stakes are also high: the prospect that individuals and families of limited means will be tossed onto the street with no place to live.

Eviction can cause long-term problems for low-income individuals and their families, setting them on a downward socioeconomic trajectory. In a Milwaukee Renters Study of 1,100 renters from 2009 through 2011, one in eight tenants reported a “forced move” from an eviction, rent increase, or unlivable conditions in an apartment. According to an article in the Cornell Chronicle, many reported being forced to move from dangerous neighborhoods to ones even more unsafe.

So, there is a negative multiplier effect to eviction: the societal cost of caring for destabilized families is spread throughout school systems, social care, hospitals, and, yes, jails.

While all of that has always been true of tenants living on the economic edge, America’s shift away from a nation of homeowners to one where the majority of adults are renters has put a spotlight on the eviction process. A 2017 Pew Research Center of Census Bureau housing report found that a higher percentage (36.6%) of Americans were then renting housing instead of buying homes than any time since 1965.

Rent vs Wages

During the housing crash of 2008, many Americans were pushed into the rental market when credit lines were frozen for the developers and landlords who provide rental housing inventory. Because of supply and demand, rents have risen faster than wages. This has put more Americans than ever before on the edge of eviction. A Pew report found that 38 percent of renter households were “rent burdened,” a 19 percent increase from 2001. That same report found that the percentage of renter households who spent 50 percent or more of their income on rent increased by 42 percent in that period.

Federal assistance for renters is not keeping up. The Legal Services Corporation, created by Congress in 1974 to aid legal representation for low-income individuals in civil proceedings, is chronically underfunded and can’t service all who need it. The program helped 1.3 million Americans in 2013, but turned away another 1.8 million who requested assistance that year.

While most major cities provide legal aid assistance to defendants in unlawful detainer cases, the new initiatives go farther by assigning an attorney (like a public defender). In this, the biggest hurdle for cities is the upfront cost. Lenders in New York and San Francisco were slow to support their tenants’ right to representation measures because of this. However, as city governments crunch the numbers and discover long-term savings that factor in the reduced costs for homeless shelter, school, and other social welfare programs, they increasingly think that funding the programs may represent a good investment. For example, a report on the potential of the Philadelphia pilot program found that for every dollar spent providing legal services in eviction court, the city stood to save $12.74 in reduced costs to the city’s eviction-related services.

Such programs could provide real benefit for municipal budgets and society. Even some prominent advocates for landlord groups, like Tracey Benson, president of the National Association of Independent Landlords, have said that greater legal representation during eviction proceedings can be a good thing.

Unintended Consequences

There is a major flip side to consider. Landlord groups have opposed such programs because they fear they will need to bear increased costs in prosecuting cases where tenants have no meritorious defense. They argue that recovery of those costs must inevitably drive up rents to the detriment of tenants already struggling to make ends meet. Mom-and-pop landlords, the majority of U.S. rental housing owners, are particularly concerned.

Joseph Strasburg, president of a New York landlords group, commented in a report in the Gothamist that the New York City proposal would cause landlords to shoulder the burden for the city government’s shortcomings: “This proposal places the burden of rectifying the city’s miserable failure to address the homeless crisis squarely on the shoulders of the largest providers of affordable housing – landlords of 1 million rent-stabilized apartments in the five boroughs.”

The Kansas City Star reported that a landlord who specialized in affordable housing units said in a hearing that a proposed package of affordable housing rules would cause him to “look for higher credit scores, longer periods on the job and no contact with the court system.”

All this is to say that if the legal burdens created by “tenants’ right to counsel” measures drive up costs for mom-and-pop landlords, these well-meaning measures could actually lead to housing problems for prospective tenants and higher costs to society. The eviction process is a rental housing disrupter which can cause units to remain unproductive for months. These new measures will make them unavailable for new tenants and unproductive for the landlord for a much longer period. It is up to all stakeholders, landowners, civic reformers, and city government officials, to work together to make sure such new laws are workable for all parties and do what they are intended to do.


Odell Murry is founder and president of MAI Financial Services Inc., a private-money-mortgage company and institutional commercial mortgage broker. Murry originates life-insurance-company institutional and private-money-mortgage loans on apartments, industrial, retail and most other income-producing commercial real estate. He is Past President of the California Mortgage Association and serves on its board of directors. He also serves as chairman of the National Advisory Board of the University of Massachusetts W.E.B. Du Bois Center. You can contact Odell Murry at OMurry@MAIFunding.com or (866) MAI-FUND.