Evictions are an unpleasant and often traumatic experience. Whatever the cause – nonpayment of rent or violations of a rental agreement – evictions can have a lasting and detrimental effect which often results in housing becoming even more difficult to obtain, or even worse outcomes like housing instability or homelessness. 

During the COVID-19 pandemic, the CDC instituted an eviction moratorium under the theory that an eviction was a public health issue. When the Supreme Court struck down the moratorium, holding the CDC lacked the authority to institute a moratorium without Congressional authority, people warned of a coming “eviction tsunami” when it ended in August 2021.

The tsunami never happened due to unprecedented levels of emergency rental-assistance funds from the federal government and hard work at the state and local level to get the funds to people in need.  For the first half of this year, there have been fewer eviction filings in Denver between January and June than for the same time in 2019. However, that has not stopped a right to counsel in an eviction measure from being placed on the ballot.

This November, Denver voters will vote on Initiated Ordinance 305 which would levy a new tax on landlords, $75 per residential rental unit, to fund universal tenant legal representation for those facing an eviction or threat of eviction in the city. According to the city, such a program would raise approximately $15.5 million, $6.3 million more than the city thought it would take to implement.

At the Common Sense Institute, we had a similar analysis using historical rates of evictions. In addition to collecting more than can reasonably be spent to cover the costs for eviction defense, the measure does not include any provisions to reduce the tax on landlords to ensure that the total taxes collected remains in-line with costs. Without a way to right-size the program, the reserve will continue to grow, putting undue burdens on both landlords and renters who will undoubtedly pay for the new tax through increased rents and larger security deposits. 

Proposed Ordinance 305 makes no distinction between tenants who cannot afford an attorney and those who can. It also allows the use of for-profit firms and private attorneys. Similar measures in cities like Philadelphia and New York limit eligibility by income as well as require service providers to be non-profit lawyers. 

The proposal does not acknowledge that Denver and the state already have programs that support tenants in eviction cases. These programs focus on eviction diversion that aims to keep a tenant from facing an eviction in the first place. They aim to help renters stay in their homes and provide support services well before an eviction is filed as opposed to legal defense programs for tenants who are already facing eviction. By assisting renters early on, both the landlord and tenant can avoid the costly and adverse outcomes of an eviction procedure. 

Evictions harm all parties involved. The landlord who has their own obligations to meet such as mortgage payments, property taxes and building upkeep and repairs. Most rental properties are owned by individuals who typically own just one or two properties according to 2018 Census data. Individual investors own about 71.6% of properties nationally, which means small business owners comprise the largest group of landlords. Therefore, focusing solely on the tenant in an eviction proceeding is injecting instability and cascading impacts in the housing market as landlords try to meet their own obligations.

The proposed measure actually misses the forest for the trees. Evictions are a consequence of a severely broken housing supply value chain that fails to meet the demand needs of its community. Colorado has a deficit of nearly 200,000 homes. As a result, rents have risen faster than incomes across the state. Even a strong job market has failed to keep up with rising housing costs. The severe lack of housing means even less options for renters. When housing supply adequately meets demand, landlords compete for tenants which means lower rents, better maintenance and rental terms, and more choices for renters.  

Better options exist for renters. Free programs already exist that work to keep a tenant in their home before an eviction is filed, which leads to better outcomes for both the landlord and the tenant. Instead of implementing a well-intentioned but ineffective program, the city should focus on the root of the problem and work on fixing its broken housing supply chain.

Evelyn Lim is a Mike A. Leprino Fellow at the Common Sense Institute.