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Study: Major Benefits Seen in Investing in Counsel for Low-Income Tenants Facing Eviction

Author: Joseph A. Sullivan

1/11/2019
Study: Major Benefits Seen in Investing in Counsel for Low-Income Tenants Facing Eviction

Reprinted with permission from the January 11, 2019 issue of The Legal Intelligencer. © 2019 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

On Nov. 13, 2018, the Philadelphia Bar Association’s Civil Gideon and Access to Justice Task Force released a landmark cost-benefit study that addressed in detail the benefits to low-income tenants — and to the city of Philadelphia — of providing legal representation to tenants facing eviction in court proceedings. The study, conducted over the course of more than a year by Chicago-based Stout Risius Ross, LLC (Stout), drew a remarkable conclusion: If the city of Philadelphia invested $3.5 million per year to fund counsel for low-income tenants, the city would save $45.2 million per year in other costs and expenses.

The $45 million in annual savings consists of the following:

  • $26 million in shelter costs for newly homeless persons
  • $7.5 million in in-patient hospital costs
  • $1 million in emergency room treatments
  • $7.5 million in mental health costs.

In developing these conclusions, Stout personnel examined thousands of court records and extensive related studies and materials, covering a wide range of direct and indirect expenditures relating to the eviction or “disruptive displacement” of tenants who do not have lawyers to represent them in court proceedings.

The Stout study also summarized the results of the cost-benefit analysis this way: The city would achieve a financial benefit of $12.74 for every dollar invested in providing counsel.

The findings in the Stout report, conducted by financial, budgetary and demographic researchers, concluded that, in practical terms, if the city invests $3.5 million in funding each year for counsel for low-income tenants, approximately 14,000 people (in 4,400 households) will be assisted in avoiding disruptive displacements each year.

Legal Representation Makes a Critical Difference

The Stout study adds a new economic dimension to the long-standing views of many lawyers and other advocates that having legal representation is essential to leveling the playing field in court proceedings generally, and in eviction, mortgage foreclosure and other housing court proceedings, in particular.

The report also found that from 2010 to 2015, approximately 1 in 14 Philadelphia tenants had an eviction complaint filed against them, and that the eviction rate in the city in 2016 was 3.48 percent, or nearly 150 percent of the national rate.

The study revealed the difference legal representation makes to outcomes: From 2007 to 2016, 80 percent of landlords in Philadelphia were represented by counsel as compared to just 7 percent of renters who had counsel to assist them. During roughly the same time period, the study also showed that the disparity in representation is paralleled in actual eviction rates: 78 percent of tenants without lawyers were disruptively displaced, while a far smaller percentage (just 5 percent) of tenants who went into proceedings with lawyers at their side were displaced.

Put another way, when a tenant has a lawyer, the tenant has a 95 percent chance of avoiding homelessness, having to move into apartments with relatives or to an overcrowded shelter, or facing other disastrous consequences.

How the Effort to Level the Playing Field Got Started

Nearly 10 years ago, then-Chancellor Sayde Ladov of the Philadelphia Bar Association formed its Civil Gideon and Access to Justice Task Force (task force) with the mission of investigating and considering the development of concrete and practical proposals to advance access to justice for those without the financial means to hire a lawyer. This followed the Philadelphia Bar Association’s early support of the American Bar Association’s 2006 resolution to promote the right to counsel in civil cases involving basic human needs, such as housing and family rights.

In the short term, the task force has developed a number of measures, in collaboration with the city of Philadelphia, the First Judicial district courts, the public interest legal community and the public to address aspects of the “justice gap” in a society where many individuals do not have the resources to hire their own legal advocates. A number of measures have been implemented, including creating legal help centers in Philadelphia Municipal Court and Philadelphia Family Court and the Elder Justice and Civil Resource Center in City Hall, and using court “navigators” to help unrepresented litigants find legal forms and information. The task force subcommittees have also recommended various procedural and substantive changes to court rules to make them easier for nonlawyers to understand.

But the Stout report is the first study in Philadelphia to specifically analyze the benefits received and the financial costs saved by investing in legal counsel. Such investments, according to the Stout report, will allow greater access to the courts, sharply reduce evictions or disruptive displacements, and avoid substantial costs otherwise needed to provide evicted low-income families with other programs and social services — services largely funded by the city.

The report was commissioned by the Philadelphia Bar Association, but conducted independently on a pro bono basis with no preconceived outcomes in mind, under the direction of Neil Steinkamp, who leads Stout’s strategic systems consulting practice as well as Stout’s pro bono practice. Stout is a premier global advisory firm that specializes in investment banking, valuation and financial opinions, and dispute consulting. In addition to these services, Stout’s professionals have expertise in strategy consulting involving a variety of socio-economic issues, including issues of, or related to, access to justice and the needs of low-income individuals and at-risk communities. Stout is a recognized leader in the civil legal aid community and the report’s conclusions have a high degree of credibility and reliability.

The Pennsylvania Constitution, in Article I, Section I, recognizes the “inherent and indefeasible rights” that all residents have in “acquiring, possessing and protecting property and reputation” and many statutes outline due process rights designed to protect the interest in housing stability for all residents. “Housing is a fundamental human need which most of us take for granted. Providing legal counsel to low-income tenants who face the threat of losing their homes, and the potentially devastating consequences, will level the playing field in eviction cases and will serve to ensure fundamental fairness and equal access to justice,” said Philadelphia Bar Association Chancellor Rochelle M. Fedullo.

The Stout report presents concrete objective evidence that ensuring fundamental fairness in the courts through legal representation is not only the right thing to do, but can lead to better results both for the parties and for the city of Philadelphia and the public-at-large. The Stout report is available on the Philadelphia Bar Association’s Civil Gideon Corner at www.philadelphiabar.org.

The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

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