Basic funding principles

How eviction RTC will be funded is a big question that should be one of the top considerations throughout the process. Without sufficient, sustainable, and permanent government funding, there is a risk of passing a law that can’t be effectively implemented for lack of funding. Determining how much funding is available (and at what point) both helps determine the scope or coverage of the eviction RTC as well as determine how the eviction process is phased in. 

Funding must ultimately come from the government.

This helps ensure that the government has a stake in the policy and is committed to making it work. But also, while private funding might be used temporarily to help get a RTC off the ground, it’s not stable enough to sustain eviction RTC long term. Private funders might shift priorities or have different goals/plans, and they can’t be expected to fund the program forever.

• Example: In Cleveland, private funding has been used as a temporary bridge because a) the City pushed back on making a major investment right away due to the cost savings mostly going to the County; and b) the shutdown of the main organizing group in Cleveland just prior to the campaign launch made it impossible to apply grassroots pressure for greater City funding.  The United Way of Greater Cleveland invested $3 million plus accepted the City’s request for it to oversee the program.  However, while the City only invested $300k of its own funds at first, it increased its investment in 2023 to $1 million over 2 years plus added $1 million of money from the American Rescue Plan Act.

The funding source and amount must be identified before a vote on an eviction RTC law is seriously considered.

Funding the program through different sources (e.g. general revenue appropriations vs. housing developer fees) requires different advocacy strategies.  Try to identify various sources of funding that could meet the scope of what you want to accomplish.  Note that even though the campaign must work with the government to identify the funding, the specific funding mechanism is typically not named in the final ordinance or law establishing eviction RTC (unless a new funding source is created), and may be dealt with in a separate appropriations process. 

Providing funding for attorneys is a necessity. 

Sometimes policymakers will ask if pro bono (free) attorneys can be used to meet the need so as to avoid the government having to allocate resources.   Attorneys should not be expected to work for free, as that can lower the quality of the services provided, and pro bono attorneys often do not have the skills or training to provide effective representation for eviction cases.  Also, the number of pro bono attorneys available has never been anywhere close enough to meet the amount of need.  However, some eviction RTC programs have some number of pro bono attorneys in the mix who are supervised by a legal services provider.

Funding should supplement, and not supplant, current legal services funding.

An eviction RTC program cannot use the existing funding of a legal services provider, which often comes from a variety of sources and is used for a variety of purposes. To provide representation under an eviction RTC program, providers need specific, additional, sustainable, and permanent funding mechanisms and should not be required to reroute their current funding to provide eviction RTC.  They understandably will not want to do so and in any case may not be permitted to do this under grant requirements / existing contract terms. 

Funding must be sustainable.

If the initial funding is temporary (such as federal emergency funds or bridge-funding through a philanthropic partner), it’s important to understand where permanent funding will come from after the temporary funding ends. 

• Example: In Louisville, the RTC was initially funded by Emergency Rental Assistance Program (ERAP) dollars.  One year after enactment, and with evidence the program was working, the City Council voted to switch to using general revenue.  

• Example: In Connecticut, the right to counsel was initially funded with $20 million in federal Fiscal Recovery Funds. Knowing that this was temporary, advocates in Connecticut raised funding from foundations for an evaluation of RTC so as to build evidence and make the case for the legislature that the state needs to allocate its own funds once the federal funds are exhausted.

Even if the funding source is not temporary (like general revenue), the government might not formally commit to any funding beyond the first year. If that’s the case, advocates need to have assurances that the government will continue to fund (and will increase funding as the program grows) beyond the first year.  Without that assurance, it is very dangerous to pass the eviction RTC as it can wind up never expanding or losing its funding despite the law technically remaining on the books.

Tapping some funding sources may face opposition.

Some stakeholders may be opposed to a new tax to generate eviction RTC revenue depending on who is expected to pay for it. Some tenant groups may be opposed to increasing the eviction filing fees in order to fund the program for fear that the increased fee will be passed down to tenants in the form of higher rent, while other communities may be okay with such an increase because the risk of increasing an eviction judgment by $80 or $90 can be outweighed by the value of tenants having counsel (especially since counsel can help reduce or eliminate money judgments). And some funding sources may face competition: for instance, there may be calls by different advocacy groups to use certain kinds of housing funds for a variety of different kinds of housing reform.  

Be careful what you call the funding source, as your wording may implicate legal or messaging issues.

For example, in Denver, the funding mechanism in the ballot initiative was specifically called a “tax” because the word “fee” may have run into legal issues. However, calling it a “tax” meant advocates had to be careful in how they talked about it in RTC messaging. 

Get creative in looking for funding.

Organizers in Multnomah County, Oregon worked with an economist to develop the idea of funding eviction RTC with a .75% capital gains tax. The economist determined the tax would bring in about approximately $15 million per year for the program.

Funding needs are likely to change.

As the RTC scales up, so will the funding needs, both because most RTC programs have a multi-year rollout and because more tenants will hopefully participate in the eviction proceedings (thereby needing counsel) instead of defaulting. Alternatively, eviction RTC might cause eviction filings to go down. A change like the institution of remote hearings could increase eviction RTC program costs due to greater participation or decrease them due to decrease travel costs for attorneys. Or there may be other, unexpected developments that affect the funding needs.

• Example: In NYC, when the campaign was launched, Stout estimated the RTC would cost $199 million.  However, this turned out to be too low when the housing courts refused to slow down the pace of evictions after eviction protections expired, a nationwide attorney shortage made hiring more difficult, and legal services programs provided new cost-per-case figures.  After city-wide implementation, advocates estimated that the full cost of an eviction RTC in NYC was closer to $350 million.

If you’re working at the local level, there may be more than one government to look to.

If you’re trying to get an eviction RTC in a city, then the county government may be in play: in some places the city takes up a significant portion of the county.  And counties may be the ones who are paying for certain services (such as homelessness services) as opposed to the city, so they are the ones that may reap the benefits of eviction RTC, making it logical that they commit financially.