With the rising costs of living and stagnant wage growth, the number of households experiencing the burden of high rent is on the rise in the United States, leaving renters earning low incomes more vulnerable to eviction. Across the United States, more than two million eviction court cases are filed annually. A disproportionate share of those at risk are households of color living with children, with Black and Latina women making up a large portion of evicted renters. Understanding the dynamics leading to the eviction of households least prepared to cope with the consequences is particularly important as policymakers grapple with the high individual and social costs of homelessness and housing insecurity. Remedies must also address the often severe detrimental impact of evictions on tenants’ current jobs as well as their overall financial stability and well-being.
This paper studies the causal effects and consequences of housing instability in New York City between 2007 and 2016, and in Cook County, IL, which includes the city of Chicago, between 2000 and 2016. The analysis examines earnings, employment, residential address histories, interactions with the homelessness services, credit bureau records, hospital visits, and historical benefits data from several years before and after renters’ eviction cases. By counting only those who were evicted by landlords with a legal eviction order, this dataset excludes displaced renters who may have received notice of an eviction filing and vacated their homes without going to court.
Key findings
- Tenants often experience significant financial turmoil in the years leading up to an eviction filing. Several years before facing an eviction case, tenants contend with lower earnings, worse credit, and higher hospitalization rates. Among tenants with a filing who receive an eviction order in court, this turmoil culminates in even sharper declines in the periods immediately preceding eviction.
- Tenants are more likely to experience lower earnings as a result of an eviction in the two years following a case filing. Evictions can disrupt employment through time spent looking for shelter, fewer work hours to accommodate new child care arrangements, or the garnishment of wages to pay back rent.
- Evicted tenants experience an average decline of about $1,640 annually (in 2023 dollars) and a larger fall of $3,113 (in 2023 dollars) in the second year.[1] For a single-person household with earnings at the poverty line, that’s a 11 percent decline of their annual salary for the first year and a 21 percent drop in the second.
- Tenants with a court-ordered eviction are more likely to use homelessness services for the first two years. Eviction orders increase the likelihood of evicted tenants staying in emergency shelters by 3.4 percentage points in the first year, and these individuals are 3.6 percentage points more likely to use homelessness services than non-evicted tenants in the second year.
- Eviction orders have long-term adverse effects on tenants’ financial well-being. Evictions reduce tenants’ credit scores by an average of 16.5 points in the second year after an eviction order, similar in magnitude to the effect of adding a bankruptcy flag to a credit report.
- Eviction leads to worse health outcomes. Receiving an eviction order increased hospital visits by 29 percent in the year after eviction filings, with a 133 percent increase for mental health-related conditions.
- Eviction results in sharper negative impacts for women and Black tenants in labor market outcomes, residential mobility, and interactions with homelessness services. While the study can’t measure the reason for this disparity, the notable difference in estimates align with previous research on discriminatory practices in housing searches.
Policy and practice implications
WorkRise has identified the following implications for policy and practice:
- Address inadequacies in social insurance policies. Policymakers should acknowledge that evictions are often preceded by adverse events among renters, exposing potential flaws in existing social insurance policies and self-insurance mechanisms used by landlords. Policymakers might explore the implementation of targeted interventions for vulnerable tenants to prevent evictions before the evident downstream consequences occur. This could involve using supports such as Temporary Assistance for Needy Families, housing choice vouchers, and the Emergency Rental Assistance program, which proved effective during the COVID-19 pandemic. Consideration could be given to fortifying social infrastructure programs such as unemployment benefits and the Supplemental Nutrition Assistance Program, as well as emergency financial aid for individuals facing economic hardships.
- Target tenants most vulnerable to evictions using a suite of policies that catch people at risk of eviction before they face homelessness. Recognizing that evicted tenants face challenges that predate their evictions, policymakers could proactively use this information to mitigate harms, particularly for Black and women tenants, who tend to be overrepresented in eviction proceedings. Crafting interventions tailored to the unique needs of these vulnerable groups can contribute to preventing eviction-related hardships from ever happening. Connecting renters to levers of economic mobility could involve assigning (virtual) caseworkers to help at-risk tenants access subsidized education, job training, quality employment, child care, mental health treatment, and other supportive services.
- Prevent evictions as a public health and societal imperative. The substantial costs to local governments associated with eviction proceedings, homelessness services, and employment disruptions for those evicted from their homes underscore a public health and fiscal imperative to mitigate evictions. Policymakers could carefully examine other housing policy levers, including tax policy, block grants, and fair housing programs. Evaluation of eviction-related policies, including emergency rental assistance, legal aid, and leniency measures in eviction proceedings could be informed by the findings in this study to enhance societal well-being while supporting tenants' overall physical, mental, and financial well-being in the process.
- Encourage employer involvement in tenant stability. Recognizing the potential impact of housing insecurity on employment, employers could play a role in providing access to emergency assistance funds for workers at risk of eviction. This voluntary engagement by employers aligns with their interest in stabilizing their employees' housing situations and mitigating the potential fallout in terms of work hours, productivity, and retention.
This research highlights the pervasive and enduring impact of evictions on various facets of tenants' lives, revealing a cascade of adverse consequences that extend beyond immediate housing instability. The implications for evicted tenants on their financial well-being, mental and physical health, and widening social disparities means that policymakers and practitioners could recognize eviction as a critical determinant of long-term labor market outcomes and socioeconomic outcomes. The study's nuanced findings motivate both targeted interventions and comprehensive policies to prevent evictions in the first place and to mitigate the far-reaching effects on vulnerable US workers and their families who are evicted.
[1] Adjusted for inflation from quarterly earnings of $323 and $613 in 2016, respectively, using the Consumer Price Index for All Urban Consumers.