Evictions Cause Increases in Residential Mobility, Homelessness, and Hospital Use and Decreases in Financial Health

The National Bureau of Economic Research released a new paper, “Eviction and Poverty in American Cities,” evaluating the consequences of evictions for tenants in two urban areas: Cook County, IL, and New York City, NY. The report finds that prior to a tenant’s involvement in housing court, they face a decline in earnings and employment and an increase in financial distress and hospital visits. In the two years following an eviction order, tenants face an increase in residential mobility, homelessness, and hospital use while also experiencing a decrease in earnings and employment. Evicted tenants also experience worsened financial health beyond the initial two-year period. Female and Black tenants face particularly significant negative impacts, which drive the observed effects on labor market outcomes, residential mobility, and homelessness.

Researchers constructed a new data set linking Cook County housing court records spanning 2000-2016, New York City housing court records spanning 2007-2016, and several longitudinal administrative data sets. The administrative data measure earnings and employment, residential address histories, homelessness services usage, and credit scores. The researchers were also able to link court data to hospital visit records in New York City. These linked data allow researchers to analyze a variety of outcomes several years before and after an eviction case. The researchers note that this study focuses entirely on the pre-pandemic period and encourage caution in applying these results to pandemic-era policies. 

The report finds that tenants linked in the housing court data differ substantially from randomly chosen tenants within the same neighborhood. Tenants involved in housing court proceedings tend to have lower earnings, lower levels of employment, less access to credit, and more debt in collections compared to their neighbors. Tenants involved in housing court proceedings are more likely to be female and more likely to be Black. Regardless of eviction case outcomes, tenants involved in housing court proceedings experience a substantial drop in financial health (earnings, employment, and credit score) and an increase in hospital visits, unpaid bills, and payday loan inquiries in the two years before the eviction filing.

Researchers observed that in the year following an eviction filing, evicted tenants have an increased likelihood of residential mobility and a sharp increase in the likelihood of using emergency shelter. While the effects of an eviction on shelter use are concentrated within the first year, evicted tenants are more likely to use homelessness services compared to non-evicted tenants in the second year of filing. The report finds that while homelessness remains rare for tenants involved in housing court, evictions resulted in more than 3,600 adults staying in emergency shelters in the year after filing and 2,500 adults using homelessness services the following year across the two evaluated locations.

In the two years following an eviction case, evicted tenants experience a further deterioration in earnings and employment. Analysis finds that an eviction lowers earnings in both the first and second years following an eviction filing. Beyond the initial two-year period, evicted tenants experience a reduced credit score, which can lead to increased borrowing costs and difficulty securing new housing. The deterioration of financial health – particularly in terms of its impact on labor market outcomes – is especially acute among female and Black tenants.

Researchers found that for tenants in New York City, an eviction also increases the number of hospital visits and mental health-related conditions in the year following a court filing. They did not evaluate the health outcomes of tenants in Cook County.

These results suggest that eviction diversion policies may yield considerable benefits for tenants, particularly for the most vulnerable groups: Black and female tenants. Additionally, policies aimed at eviction diversion may help local governments reduce the high cost of providing healthcare and homelessness services, as well as other spillover costs.