Eviction Reflects Deeper Financial Stress

Eviction gained national attention in 2016 with sociologist Matthew Desmond’s Pulitzer Prize-winning book “Evicted: Poverty and Profit in the American City”.

Husker economist Daniel Tannenbaum heard Desmond speak and was blown away by the problem’s magnitude – roughly 2.5 million evictions, or about four each minute, are filed annually in the U.S. He and colleagues noted the absence of economists studying the problem.

To determine whether eviction causes financial difficulties, household relocations and other problems, Tannenbaum’s team launched a study linking 17 years of eviction court records from Cook County, Illinois, to financial data.

It’s the first research using administrative data – payday loans and credit reports – to trace long-term outcomes for people who appear in eviction court. This innovative approach gives Tannenbaum’s team a long-range perspective unavailable through traditional methods.

“It would be very difficult to do this using survey data,” said Tannenbaum, assistant professor of economics. “We would have to wait years, then follow up and try to find people who are experiencing housing difficulty. Using administrative data, we can circumvent that.”

The team found that eviction court appearances reflect deeper, preexisting financial distress. Though eviction reduces credit access and the ability to purchase durable goods like appliances, cars and electronics, those effects are modest compared to pre-court economic strain.

“Eviction is an inflection point,” Tannenbaum said. “We see declining earnings, falling credit scores and a surge of payday loans in the two years leading up to eviction court.

”Win or lose, tenants experience significant housing instability after court, the team found. This suggests that while court outcomes are important, the real culprit may be the financial distress that lands a tenant in court in the first place.

Public policy-wise, Tannenbaum said, early interventions to help tenants avoid court may be ideal. He suggested policies such as emergency financial assistance for struggling renters should be evaluated.

Next, Tannenbaum will access additional data through the university’s Central Plains Federal Statistical Research Data Center to assess other eviction outcomes. He also will study eviction’s effects on children’s education.

The National Science Foundation, The Spencer Foundation, the Laura and John Arnold Foundation and the Kreisman Initiative on Housing Law and Policy fund this work.