From [HERE] An estimated 28 million renters in the U.S. are facing evictions over the next three months, as states begin lifting their COVID-19 related eviction moratoriums.

According to WKRC nationally whites own 82.8 percent of rented property. [MORE]  While 73.1% of white Americans owned homes as of the second quarter of 2019, a record low of 40.6% of black Americans had achieved homeownership and 46.6% of Hispanic Americans.

The resulting 32.5 percentage-point gap in homeownership between black and white Americans is 3.6 points wider than it was at the beginning of 2010, according to a new report by real estate brokerage Redfin. Ralph McLaughlin, deputy chief economist at CoreLogic, a real estate and data analytics provider said, “African American households tend to be overwhelmingly renters,” [MORE] and [MORE]. Approximately 70 percent of renter households had incomes below the national median and more than 40 percent had incomes in the bottom quartile. Half of African-American and Hispanic renters had close to $0 in net wealth. [MORE] and [MORE]

In April, most U.S. states imposed some manner of lockdown to control the spread of the virus, restricting most workers to their homes. Unemployment rates shot to 14.7 percent, according to the Bureau of Labor Statistics. More than one-third of renters did not pay their rent that month, according to data from the National Multifamily Housing Council.

Many states enacted eviction moratoriums, banning landlords from evicting a tenant due to non-payment of rent. But as those moratoriums expire in August, 20 to 28 million renters are facing evictions, said Emily Benfer, visiting professor and director of the Health Justice Clinic at Wake Forest School of Law and co-creator of the COVID-19 Housing Policy Scorecard with the Eviction Lab at Princeton University.

The Congressional CARES Act, which provides 120 days of eviction relief for tenants in federally-backed housing, is set to expire July 25.

“50 million renters today live in households that suffered COVID-19 related job loss or income loss. And 40 percent of that occurred in especially low income households,” said Benfer, at a July 17 briefing on evictions, organized by Ethnic Media Services. [MORE]

Attorney Peter Sabonis writes, Over the next few weeks, the doors to eviction courts will open wide again and we in Maryland will be able to witness structural racism in action.

The highest cost-burdened renters come disproportionately from communities of color. For the last four months, the ones experiencing rental arrearages have been protected by an eviction moratorium issued by Court of Appeals Chief Judge Mary Ellen Barbera.

The state moratorium will give way to what Attorney General Brian Frosh called a “tsunami” of evictions. While housing advocates called for $153 million in eviction assistance funds to meet the flood of cases, Gov. Larry Hogan could manage only $30 million, roughly 1% of the $2.3 billion the state received in federal CARES aid.

The low-wage service sector employs a disproportionate number of Black workers. An analysis of employment patterns by Associated Black Charities showed African-American employment concentrated in service-related occupations, which account for 24% and 29% of their employment in Baltimore City and its metro area, respectively.

June’s labor data were recorded before the COVID-19 resurgence. Yet they show the leisure and hospitality sector, a key employer of minorities, with an unemployment rate of 28.9%,while permanent job losses soared.Unemployment insurance, despite a federal expansion and supplement benefit, has an arcane legal structure where benefits are determined by the amount and timing of past wages. The system has struggled to keep pace with demand, avoid fraud, and determine who is eligible.  Undocumented immigrants, who pay an estimated $308 million in state and local taxes per year are excluded.  If annualized, the $600 weekly federal supplement, for those who actually receive it, is only 120% of the federal poverty level for a four-person household.

The system at work

The market statistics are relevant because the market is granted the same cultural assumption that most also give to our legal system: It’s neutral.

But the inequities in our economy that the COVID-19 pandemic has exposed and exacerbated are not the unexpected byproducts of Adam Smith’s “invisible hand” or Chief Justice John Roberts’ neutral “umpires.”  They were codified by law and public policy years ago, and we operate in their footprints today.

The gap between Black and white homeownership is now larger than it was when the Federal Housing Administration was created in 1934. Back then, we had just outlawed racial zoning, but were about to enter into four decades of “redlining,” block-busting, racial covenants, and FHA mortgage insurance for covenant communities, all of which kept Black households from becoming part of a post-World War II “middle class,” with its attendant wealth, education, and political power.

This is well documented in Richard Rothstein’s book, “The Color of Law.”

While the Fair Housing Act in 1968 prohibited discriminatory housing practices, they did not disappear.  Redlining continued, requiring passage of the 1977 Community Reinvestment Act. By this time, however, our economy shifted from manufacturing to service jobs, with stark inequalities based upon education levels.

As local property taxes play a key role in financing primary education, and children of homeowners are more likely to go to college, Black households, imprisoned by law and policy on property with little value, fell further behind whites.

“Predatory Inclusion” then followed racial exclusion. Black households were targeted by “sub-prime” mortgage loans that were securitized to inflate a swelling housing bubble. Black homeownership rose to  record levels, then collapsed when the bubble burst, pushing rates back to levels that were seen prior to the passage of the Fair Housing Act.

Since then, new barriers to Black homeownership have been created.  Reveal analyzed Home Mortgage Disclosure Act data in 2015-2016, controlling for nine economic and social factors, and found that Blacks were refused mortgage loans at higher rates than whites in 48 states. Latinxs were turned away similarly in 24 states. One commentator aptly called this the “coloring of risk.”

The challenge of Black homeownership is a key to understanding what lies ahead in Maryland over the next few weeks.  The distinction between tenant and homeowner is monumental, economically and legally.  Homes are our most likely wealth asset.

The Maryland legal system expanded protections during the foreclosure crisis, increasing homeowner opportunities to avoid displacement. A case cannot be docketed until 90 daysafter default, and residents have a right to mediation.

The legal system for tenants is quite the opposite. Nonpayment of rent is a summary ejectment process that can evict a household in 16 business days following rent nonpayment. These cases are fast-tracked and appeals require payment of surety.

In short, the historical subjugation of Black households in our housing policy and law makes them more likely than whites, over the next few months, to be facing summary ejectment in rent court rather than an extended foreclosure process.  As lawyers and judges, we can rationalize the distinction by citing different possessory interests.  But the fact is each group will face different due process and displacement risk because of race.