On September 26, Mecklenburg County Community Support Services released the 2020 Charlotte-Mecklenburg State of Housing Instability & Homelessness (SoHIH) report. The report provides a single, dedicated compilation of all the latest local, regional, and national data on housing instability and homelessness pertaining to Charlotte-Mecklenburg. This year’s report also lays the foundation for understanding the impact of COVID-19 on housing instability and homelessness.

Part 1 of the 2020 SoHIH Deep Dive blog series covered the first three themes from the report, which are all related to the need for both increased access to and availability of permanent, affordable housing. Part 2 focused on the final two themes, which are both related to role that permanent, affordable housing plays in ensuring individual and public health. This blog post completes the series by synthesizing information from the report with current data and trends related to COVID-19. In addition, this blog post will highlight examples of new solutions from other communities which may be relevant to addressing housing instability and homelessness locally.

THE SAME PROBLEM, ONLY WORSE

The problem of housing instability and homelessness in communities like Charlotte-Mecklenburg is not new. Data from the 2020 SoHIH Report indicate that these issues were already “trending” in the wrong direction pre-pandemic. This boiled down to two facts: housing instability and homelessness was (and is) increasing; and permanent, affordable housing stock was (and is) decreasing. The COVID-19 pandemic has only worsened these pre-existing conditions; exacerbated pre-existing disparities; and illuminated the housing needs of pre-existing homeless populations. Therefore, it is critical that communities reflect on what was already occurring pre-pandemic while planning and allocating resources to address the current and forecasted realities of the pandemic era. While COVID-19 has worsened the situation, the virus did not cause it. Housing instability and homelessness are pre-existing conditions; worse, the households at greatest risk to loss of housing are also those who are highly susceptible to, and at elevated risk of complications from, COVID-19.

TRENDS, THEN & NOW

Below are three themes related to the primary solution for housing instability and homelessness: permanent, affordable housing. To both depict a comprehensive picture of the current state and better illustrate what is on the horizon, data from the 2020 SoHIH is herein combined with updated data and new research to provide greater context for current conditions and better estimate the impacts of COVID-19:

1. The inventory of permanent, affordable housing (including financial assistance to gap costs and the physical units, themselves) in Charlotte-Mecklenburg is decreasing; and
2. There is not enough, new permanent, affordable housing (whether financial assistance to gap costs or the physical units, themselves) to keep pace with the need; and
3. Households able to secure housing assistance face additional barriers to accessing available permanent, affordable housing, which further strains the existing physical inventory.

In the United States, more than 4 million permanent, affordable housing units have been lost over the last decade. The 2020 SoHIH Report indicates that, in Charlotte-Mecklenburg alone, the number of low-cost rental units (those renting at or below $800 per month) has dropped from 51% of all rental units in 2010 to 26% of units in 2018. The 2020 SoHIH Report also shows a decrease in the funding available to subsidize rapid re-housing and permanent supportive housing units dating to 2018. Nationally, only 1 in 4 renters who are eligible for federal assistance to gap the cost of housing can access those supports.

The loss of existing permanent, affordable inventory is magnified by the failure to produce enough new permanent, affordable housing inventory. Per the 2020 SoHIH Report, the local Housing Trust Fund has supported the development, preservation, or rehabilitation of 10,369 total units between FY2002 and FY2020. After deducting the total number of units that were emergency shelter beds for people experiencing homelessness (694); and the total number of units that are pending and/or under construction (3,599); this equates to a total of 6,076 total new units over eighteen years, or 338 new units on average per year. These 6,076 units also are rented across a range from 0% AMI all the way to market rate.

The supply of permanent, affordable housing is further restricted by barriers like Source of Income Discrimination. The 2020 SoHIH Report indicates that 44% percent of rental applications placed by Housing Choice Voucher holders between April and December 2019 were denied. In addition, 7% (or 53 households) who were experiencing homelessness and surveyed on the night of the Point-in-Time Count had some form of housing subsidy in hand but were still unable to access permanent, affordable housing.

A lack of access to and availability of permanent, affordable housing has negative repercussions across the entire housing continuum. Looking upstream to households experiencing housing instability, a lack of permanent, affordable housing results in rental mismatch.  This mismatch is expressed as housing cost burden; and leads to increased risk of evictions for households so burdened. Even if a household does not get physically evicted from their home, there are immediate and longer-term consequences resulting simply from the eviction filing. The current state, as described by the 2020 SoHIH Report, is:

• 77% of households with income at or below 30% of Area Median Income are renting units at a higher cost than they can afford, which results in housing cost burden; and
• More than 81,000 renter households and over 44,000 owner-occupied households are experiencing housing cost burden; and
• More than 25,000 formal evictions were filed in Mecklenburg County courts during the past year (which is an undercount since courts were closed between April and June 2020).

At the other end of the continuum, a lack of permanent, affordable housing leads to increases in homelessness; longer stays in emergency shelter; and the need for greater resources to help households regain housing. It is notable that these resources exceed what would be necessary to prevent homelessness in the first place. Here’s more data from the 2020 SoHIH Report on the current state of things:

• Roughly 3,000 people, on average, are actively experiencing homelessness (this does not include all of the households experiencing homelessness in doubled up situations with family and/or friends and all of the households paying to stay week to week in hotels and motels); and
• The average length of stay in emergency shelter is nearly 4 months; and
• The average length of stay has increased by 52 days during the past 5 years.

Longer stays in shelter create a negative feedback loop for households, adding barriers and complications to access housing and employment.  This also means that shelters serve fewer people in the community, overall, leading to tent encampments and other manifestations of unsheltered homelessness.

POSTPONING THE INEVITABLE

Based upon data and research conducted since the start of the pandemic, without widescale interventions the trends identified by the 2020 SoHIH Report will not change. The negative impacts on individuals and the community will be most acute where cracks in the foundation already exist, widening gaps and worsening disparities. Prior to the federal moratorium recently enacted by the U.S. Centers for Disease Control and Prevention (CDC), it was estimated that between 19 and 23 million renters could face eviction in the United States by September 2020. That projection was based upon unemployment rates, household income, savings, temporary assistance, and housing cost burden. A new report by the National Council of State Housing Agencies (NCSHA) projects that 8 million renter households (or, 20 million renters) will likely face eviction on January 2021, when the CDC-imposed eviction moratorium is set to expire. In addition, the report projects a national rental shortfall of between $25 billion and $34 billion. The NCHSA also forecasts cuts to local property tax revenue of between $3.5 billion and $4.8 billion; decreased revenues mean decreased resources for the most vulnerable.

While the new CDC eviction moratorium is not perfect, it provided a pause for many communities grappling with how to safely keep households in their homes. After the eviction moratorium was enacted, three lawsuits were filed in Atlanta, Memphis, and Columbus. The Columbus lawsuit raised questions of the authority of the CDC to impose a national eviction moratorium.  It was originally scheduled to be heard today (October 15), but was dismissed just as a new FAQ regarding the eviction moratorium was issued by the CDC late last week.

There are three important components of the FAQ for communities to understand. First, the language in the FAQ does not prevent a landlord from starting the eviction filing process.  The moratorium may keep the eviction from physically taking place until January 1, 2021; however, many tenants may lose their housing from fear of outcomes or an inability to defend themselves in court. This inability could even stem from a lack of access to tools to appear virtually. Essentially, this sets up a queue for evictions as soon as courts convene in the new year. Secondly, the FAQ empowers landlords to challenge the veracity of a tenant’s declarative statement without providing procedures for tenants to prove their statement or ways a decision will ultimately be made. Finally, the FAQ informs landlords that they do not have to inform tenants of the information in the CDC moratorium. Despite the changes reflected in the FAQ, all local and state laws must still be followed regarding how and when and eviction filing can take place.

SO, WHAT

All of this serves only to underline the urgent need of a uniform, national moratorium that continues throughout the pandemic. To be transformative, the moratorium must be coupled with the financial assistance to pay past due rents and cover totals owed. These actions would help both tenants and landlords, while also bolstering both economic recovery and public health.

At the local level, communities are trying to plug holes where possible. New CARES Act funding has been used to incentivize landlords to accept new tenants. Communities have also used the CARES Act funding to subsidize rental units to prevent more households from falling into homelessness as well as re-house households who have lost their housing. Examples exist from around the United States. Florida allocated $120M to cover six months of rental arrears from July to December 2020. Los Angeles County targeted $100M to assist 9,000 households living in the ZIP codes at highest risk of negative impacts from COVID-19. Like the steps taken early in hopes of flattening the infection curve, the use of CARES Act dollars can help communities to reduce the incoming wave of households newly facing housing instability and homelessness.

In addition, communities can continue to pilot innovative approaches, especially with the increased funding flexibility in the wake of COVID-19. Last week, Foundations for Social Change and the University of British Columbia shared the preliminary results from a new effort that is considered the world’s first direct cash transfer program to address homelessness. Called “The New Leaf Project,” the program gave 50 individuals experiencing homelessness the U.S. equivalent of $5,700 (7,500 dollars Canadian) and then tracked the recipients for twelve to eighteen months. Researchers compared the outcomes of the 50 individuals receiving cash assistance to a control group whose members did not receive any payment. Preliminary findings showed that individuals who received the upfront, cash, lump sum were able to find stable housing faster; obtain the food they needed to live sooner; and maintain greater food security throughout the year. Additionally, recipients spent less on goods like alcohol, cigarettes, or drugs; and even set aside savings. Most significantly, the researchers showed the cost savings of providing cash assistance directly: the community saved $307,800 (405,000 dollars Canadian) over the course of that year.

Without over-committing resources, other communities can also test this approach. For example, two scenarios tailored to Charlotte-Mecklenburg, accepting that a 2-bedroom unit at Fair Market Rate is $1,063 per month:

• Option A: Give 50 individuals $9,000 in one lump sum (70% of $1,063 x 12 months); compare with control group who does not receive lump sum. Total cost = $450,000; or
• Option B: give 25 individuals $9,000 total, in two 6-month increments ($4,500 per increment); give another 25 individuals $4,500 in one lump sum; and compare with control group who does not receive either direct assistance. Total cost = $337,500.

The cost of this program can be compared to the cost to house an individual in shelter, or even to incarcerate them. Using the data and methodology employed in the Housing First Charlotte-Mecklenburg Research & Evaluation Project, one night in emergency shelter for one person in Charlotte-Mecklenburg runs around $24; to host 50 individuals in a shelter for 365 nights equates to $438,000.  The cost to house an individual in the Mecklenburg County Jail is roughly $179.19 per night; over the course of a year, that cost to the community for 50 individuals is greater than $3.27M.

Where would the dollars go further? You can do the math.

To share information from the 2020 SoHIH Report, including how to use the data; raise awareness; and ways to inform solutions, click this link to access the full report, toolkit and handouts.