Ingrid Gould Ellen and Katherine O’Regan are co-directors of the NYU Furman Center. Amy Ganz is deputy director of the Aspen Economic Strategy Group.

The covid-19 pandemic has pushed tens of millions of Americans to the brink of eviction, revealing a gaping hole in our social safety net. The Cares Act, a federal eviction moratorium, and state and local renter protections have thus far held back a catastrophic wave of eviction and homelessness. But this crisis is forcing policymakers to reckon with the systemic risks posed by widespread housing instability. Previous crises have prompted the creation of the “automatic stabilizers” we take for granted — such as unemployment insurance and nutritional assistance — which protect individuals and prevent broader economic collapse. In that vein, we propose a new federally funded, locally administered rental assistance program providing short-term emergency funds to keep people in their homes and reduce the costly collateral damage of forced moves, evictions and homelessness.

While forced moves exact high tolls, many are cheap to prevent; renters regularly owe only a few hundred dollars when facing eviction. But once people become homeless, the cost to taxpayers can amount to tens of thousands of dollars per person per year. Even before the pandemic, some cities began offering emergency programs to prevent homelessness by providing short-term assistance that can be applied to back rent, utilities and other qualifying renters’ expenses. An evaluation of one such program, Chicago’s Homelessness Prevention Call Center, found the intervention reduced the likelihood of homeless shelter use by 76 percent. The Homebase program in New York cut the number of nights families spent in shelters by 70 percent.

Yet while local governments are well positioned to administer emergency rental assistance, only the federal government has the necessary resources to provide adequate funding. We estimate a national program would cost $4.5 billion in a typical year, though — as with other automatic stabilizers — the amount would be higher in times of crisis. That is a modest amount compared to the roughly $75 billion that taxpayers “spend” on subsidizing homeownership through capital gains exclusions from home sales, property tax deductions and the mortgage interest deduction, all of which disproportionately benefit higher-income Americans.

The economic shock caused by covid-19 is unique in its size and widespread impact, but the reality is that millions of American households — nearly 60 percent according to one Pew Charitable Trusts survey — faced serious financial shocks in 2014. These shocks have many causes: job loss, injury or illness, unexpected car or home repairs. But they can derail low- and moderate-income households, whose housing costs have far outpaced income growth over the past several decades. We estimate that after paying rent, the average renter in the bottom national income quintile in 2016 had only $400 remaining each month — a 20 percent decline in real terms since 2000. These razor-thin margins leave families almost nothing to cover other essential expenses, much less to save for a rainy day.

When unexpected income loss or expenses result in forced moves and evictions, the costs are sizable both to renters and to society as a whole. Research shows that formal evictions elevate the risk of homelessness and emergency-room use both immediately and over time; they are also associated with worse health outcomes, job instability and poor academic performance among children.

There have been signs of bipartisan support for the emergency rental assistance program we propose. In 2019, Sens. Michael F. Bennet (D-Colo.) and Rob Portman (R-Ohio) introduced the Eviction Crisis Act, which would have provided short-term, emergency assistance to extremely low-income families. In 2013, the Bipartisan Policy Center also proposed one-time emergency assistance for renters as part of a broader suite of housing reforms. We discuss these proposals in one chapter of an Economic Strategy Group policy volume Securing Our Economic Future, to be released on Dec. 10. We also argue that short-term rental assistance should complement, rather than substitute for, longer-term and deeper rental subsidies, which serve a fundamentally different purpose.

As numerous localities around the country have learned this spring and summer, having even a small, preexisting program makes it far easier to provide scaled relief in a broader emergency. Thus, while our proposal is intended to address unexpected financial events in individual renters’ lives, it could mitigate harm during a common shock, such as a natural disaster or pandemic, much as the unemployment insurance system has been used to respond to covid-19.

The pandemic has placed into sharp relief the existing holes in our federal safety net. One of them is the need to promote housing stability. Let us heed the lessons of this crisis so that we are not only better prepared for the next one but also for the everyday crises that so many Americans face.

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