A California Housing Crisis Mystery: Rents Are Way Up This Decade, But Eviction Filings Are Way Down

Speaker 1: 00:00 Anyone who pays rent in California knows how hard it can hit your bank account. The state's housing crisis means sky high prices, whether you're buying or renting. Data collected by researchers at UCLA shows while the median rent in California has increased 23% between 2011 and 2018 the number of times California landlord sued their tenants to evict them, dropped by nearly 40% over roughly the same period. So what is going on? Joining us to try and answer that question is Matt Levin housing and data reporter with the public interest journalism organization. Cal matters. Matt, welcome. Thanks for having me. So anyone who rents or has tried to rent a place in San Diego knows that rents are sky high. And yet, as I mentioned, instances of landlord suing tenants to evict them are way down. Generally speaking, what do experts think is going on here? Speaker 2: 00:54 So they're not 100% sure what the reason is. It's such a counterintuitive finding, right? You would expect as rents increase, that tenants would have increasing difficulty actually paying the rent. That's the number one reason a landlord tries to kick you out, tries to evict you, is you can't afford the rent anymore. Um, so it's a counterintuitive finding, not only for academics but also for tenants groups and even landlords. Speaker 1: 01:20 And when we talk about eviction, we're not just talking about a landlord going to court to get someone out. I mean there are different kinds of evictions. Right, Speaker 2: 01:28 exactly. And so that 40% drop that you referenced earlier, that's when landlords actually Sue a tenant to get rid of them from their property, which is relatively rare. There are plenty of other ways and landlord can get rid of a tenant. They could simply, um, harass them into leaving. There's things like cash for keys where basically they pay the tenant to get, uh, to have them leave the property. Um, not to mention if they simply put a eviction notice on your door and say you have three days to pay your rent or you're out and you decide to leave in those three days, that isn't going to show up in any data that the state collects. But it's still a, as I said before, incredibly counterintuitive. The data that we do have shows a significant drop Speaker 1: 02:11 and it's become much easier these days for landlords to screen tenants. Uh, you can find out all sorts of things about a person by paying a third party investigative service. So is the fact that it's so much easier to screen tenants maybe part of the reason for this? Speaker 2: 02:26 Yeah, so this is really, really interesting, especially considering some of the homelessness numbers that we've seen escalate in recent years. So I talked with a lawyer who basically does evictions for landlords and he was saying, look, part of the reason we're seeing this drop is landlords have just gotten a lot better at screening tenants who might miss rent payments. Um, basically it costs 50 bucks now to get a pretty thorough report on, um, what exactly the risk that a tenant might miss a rent payment in the future. So it used to just be, you got a credit report, right? And that was basically it. But now you get criminal history, now you get a history of their tendencies, you get a whole wealth of information that landlords can use to say, okay, maybe I would have rented to this person 10 years ago, now I'm not going to do so. Speaker 1: 03:20 Mmm. And new laws went into effect at the beginning of this year. That limit landlord's ability to increase rent or evict certain tenants. Are those laws anticipated to have any effect on those statistics? Speaker 2: 03:32 Yeah, there's an irony here. I'm one of the most controversial provisions of this new law is uh, an elimination of what's called no cause evictions. So prior to this year, in most parts of the state, landlords could basically say, okay, you got 60 days to get out of here if you're on a month to month lease. And I don't really have to tell you why. Now with this new law, landlords have to state a specific reason why that person is violating the terms of their lease basically. Um, what that means is that you might actually see an increase in tenants fighting these evictions in court. So the numbers actually might go up. Now that doesn't mean evictions overall are going up, but it is a ironic wrinkle to that new law. Speaker 1: 04:17 Okay. And, um, evictions are down in other expensive places to live as well. So could some of this just be people moving into cheaper housing further away from the expensive housing, thereby eliminating the need to evict? Speaker 2: 04:31 Yes. Um, this is not a uniquely California phenomenon. You see declining official evictions in Seattle. You see a client declining official evictions in Washington, D C both of those places have seen explosions in rent over the last decade. Um, and what researchers there say is, well, people are just kind of leaving, right? If you're lower-income and you can't afford those places anymore, you're just going to cheaper suburbs. What's interesting in California is you see declines in eviction filings in even cheaper places. So the Bay area saw eviction declines, San Diego sigh, eviction declines, but the central Valley also saw significant eviction filing decline. So Sacramento, Fresno, um, other places like that where you would think the lower income populations of these more expensive coastal places are moving. So it's not a yes, um, that's part of the explanation here, but it's not completely satisfactory. Speaker 1: 05:29 And you talked to a landlord that said it's now much more expensive to go to court to evict someone. It sounds like that could be part of this puzzle as well. Speaker 2: 05:39 Yeah, that's right. Um, so a lawyer that again does evictions on behalf of landlords said, look, uh, a decade at co it would cost my clients $1,000 to go to court. Now the state and local governments have put a lot more resources into um, uh, eviction defenses for low income tenants. And if a eviction lawsuit actually goes to a jury trial, which is what landlords really, really want to avoid, it could be 15 grand. And so the, the calculus there for landlords is, well, you know, if, do I really want to push this to the point of actually going to the courts and take the risk that this is going to be really, really expensive for me? Maybe I won't Sue to evict my tenant. And if you're not looking for a place to rent, why should you care about this issue? Oh, a for lots of reasons. Speaker 2: 06:35 Um, if you care about homelessness, there's increasing evidence that evictions are tied to homelessness. Um, once you get an eviction on your record in California and in most other parts of the country too, it is really, really difficult to find another place to live. So from that perspective, the fact that these official eviction filings are declining, Mike kind of be good news. Um, it doesn't fully explain why you might see an increase in homelessness numbers. There's, there's explaining this phenomenon I think is, um, kind of essential to understanding the broader dynamics of homelessness and gentrification in California. I've been speaking with Matt Levin of Cal matters. Matt, thank you so much for joining us. Thank you for having me.