The costs of evictions in the city are high both for tenant and taxpayer.
But a new study found the city could save approximately $45 million a year in costs related to the eviction process by investing $3.5 million to provide legal counsel to low-income tenants facing evictions.
On Tuesday, the Philadelphia Bar Association released the year-long study, “Economic Return on Investment for Providing Counsel in Philadelphia Eviction Cases for Low-Income Tenants,” which was completed by Chicago-based Stout Risius Ross LLC.
Mary Platt, chancellor for the nonprofit Philadelphia Bar Association, said she was not surprised the city would save funds by investing in these legal services.
“Investing in legal counsel for low-income tenants facing eviction is one of the most effective measures to prevent evictions and homelessness, which in turn will result in significant cost savings and benefits for our community,” Platt said in a released statement.
Mayor Jim Kenney’s Office did not immediately respond to a request for comment on Monday. City offices were closed Monday due to the observation of Veterans Day.
The study analyzed more than 101,000 cases from Philadelphia Municipal Court between 2007 and 2016 to determine how many tenants were forcibly displaced or whether their lives were disrupted by an eviction when they were represented by legal counsel compared to when they were not represented.
The study found that tenants with legal counsel fared far better than those without and there were significant representation disparities between landlords and tenants.
During that 10-year time period, the study found, tenants were represented in an average of 7 percent of cases, while landlords were represented by legal counsel in approximately 80 percent of cases.
Unrepresented tenants were disruptively displaced in 78 percent of cases, while that rate plummeted to 5 percent for tenants with legal representation, according to the study.
The report also found that:
- Legally represented tenants in non-public housing cases were more than twice as likely to receive a judgment in their favor as compared with unrepresented tenants.
- There are an estimated 4,378 eviction cases annually in Philadelphia where a tenant is not represented.
- An estimated 14,418 individuals per year would avoid eviction if legal representation was provided to tenants.
- Philadelphia eviction rate of 3.48 percent in 2016 was nearly 150 percent of the national average.
The study estimated that $3.5 million would be enough to provide legal representation to tenants unable to afford it otherwise.
The the city’s return on investment was estimated to be at least $12.74 for every dollar it spends on providing legal representation for low-income tenants facing eviction proceedings. The study noted the $45 million in city savings was conservative.
“However, there are many benefits to society of a population that enjoys stable housing which are not easily quantifiable and therefore are not included in Stout’s calculations,” the report stated.
Eviction for a tenant can lead to job loss, poor performance in school for children, and physical and mental health issues, the study said. Eviction also can negatively impact a tenant’s credit score so as to hinder his or her ability to rent elsewhere.
For the city, the eviction process leads to higher costs related to shelters, emergency housing, hospitals, mental health services, and law enforcement, in addition to burdening the courts, according to the study.
Providing legal services for low-income tenants can improve community stability and confidence in the justice system, the study said.
Ethan Fogel, a partner with Dechert LLP who collaborated with Stout on the study, said he has seen firsthand the disadvantages that tenants face during eviction proceedings.
As a lawyer who provides pro bono legal services, Fogel said not only was the eviction process intimidating, but tenants “don’t have the defenses with which to defend their case.”
“I see people who are really afraid and don’t know the first thing about what to do if they’re not represented,” he said.
While a tenant may face eviction whether he or she is represented by legal counsel or not, Platt noted that a lawyer can better negotiate with a landlord’s counsel during the process and “resolve matters in a way that is less disruptive to their lives.”
Philadelphia is in the midst of an eviction crisis.
More than 1 in 14 tenants in the city faced eviction in 2016, according to a report issued by Mayor Kenney’s Taskforce on Eviction Prevention and Response. And households headed by Black women with children and by those with low educational attainment are most likely to face forced-moves.
Exacerbating the problem is the lack of affordable housing: For every 100 extremely low-income renter households, there were only 34 affordable housing units available.
In January, the city spent $500,000 to launch the pilot program Philadelphia Eviction Prevention Project, which aims to reduce the number of evictions and provide more resources to tenants.
The project, which is led by Community Legal Services, offers a host of services, including a lawyer-for-a-day, n live telephone advice hotline, financial counseling and an informational website at phillytenant.org. Funding for the Philadelphia Eviction Prevention Project was increased to $850,000 for the current fiscal year.
Rasheedah Phillips, managing attorney for the housing unit at Community Legal Services, said city officials could do more to address tenant evictions in the city.
“The money that we have now has been significant in allowing us to expand our capacity, but we could go much further to be able to reach more Philadelphians who are facing evictions and who are low-income,” Phillips said.