New Report Links Foreclosures and Homelessness

“Local reports indicate that homelessness is on the rise and this report [Foreclosure to Homelessness] gives us insight into the role that foreclosures may be having on that increase,” said Nan Roman, president of the National Alliance to End Homelessness.

The Foreclosure to Homelessness: The Forgotten Victims of the Foreclosure Crisis report released last week provides insight into how foreclosures have affected homeless populations around the country. Based on surveys completed by 178 organizations across the U.S. that provide services to individuals and families experiencing homelessness it was determined that the nation’s homeless population has been directly impacted by foreclosure and that the is likely to increase along with the number of foreclosures. Nearly 80 percent of the respondents reported that at least some of their clients became homeless due to foreclosure. The leading self-reported reasons for homelessness, however, remain financial obstacles like job loss, addiction and evictions, according to additional information gathered by the Alliance to End Homelessness.

“The results of this survey make clear that foreclosures are a major factor in the increase of homelessness in the United States,” National Low Income Housing Coalition (NLIHC) President Shelia Crowley said.

Conducted earlier this year between January 15 and February 21, the data collected by the survey reflects the previous 12-month period. Other key findings include:

Housing providers (including emergency, transitional and permanent housing) estimated that 5 percent of their clients experienced homelessness as a result of foreclosure compared to 10 percent of all respondents.

34 percent of responding organizations indicated none of their clients were homeless as a result of foreclosure however 14 percent of those surveyed estimated that most of their clients were homeless due to foreclosure.

Those experiencing homelessness due to foreclosure tended to be renters – not owners.

Most of those facing homelessness because of foreclosure, whether renters or owners, did not seek legal advice in foreclosure proceedings.

The most common living situations among those made homeless by foreclosure included staying with family or friends and emergency shelters.

“We’re grateful that since the time this data was collected, federal actions have provided communities with resources to prevent and end homelessness, in the form of stimulus dollars and renter protections.”

The 40-page report was released by the Alliance along with the National Coalition for Homelessness, the National Health Care for the Homeless Council (NHCHC), the National Association for the Education of Homeless Children and Youth (NAEHC), the National Law Center on Homelessness and Poverty (NLCHP), the National Low Income Housing Coalition (NLIHC) and the National Policy and Advocacy Council on Homelessness (NPACH).

Another study, Renters in Crisis by Shelia Crowley and Danilo Pelletiere of the National Low Income Housing Coalition and Maria Foscarinis of the National Law Center on Homelessness & Poverty, that is also cited in the Foreclosure to Homelessness report, revealed the following facts regarding renters and foreclosures:

In 2008, one of every five properties in foreclosure were rental properties. Many had multiple units.

An estimated 40 percent of families facing eviction due to foreclosure are renters.

Seven million households living on very low incomes (31 to 50 percent of the Area Median Income) are at risk of foreclosure.

Renters received important new federal protections when President Obama signed the Helping Families Keep Their Homes Act in May 2009. The Act states that tenants must be given at least 90 days notice to vacate once a property has been foreclosed on and have the right to occupy the premises until the end of any term entered into under a bona fide lease agreement made prior to the notice of foreclosure is given unless the property will become the owner’s primary residence. Further, the Act protects renters receiving Section 8 assistance by preventing eviction during the term of their lease just so the new owner can sell the property. These and other provisions, while helpful, will not completely solve the problems renters and tenants face during foreclosure.

To assist tenants facing foreclosure, NLIHC has teamed up with the National Housing Law Project (NHLP) to create a toolkit for renters facing eviction due to foreclosure. The toolkit, which is available on the NLIHC website, includes a copy of the law, a one page explanation of its provisions, a question and answer document for tenants, sample letters to send to landlords, judges and public housing agencies and a webinar explaining the new law.

“Under the law, these blameless victims of the foreclosure crisis are now protected,” said Crowley. “The toolkit provides tenants and their advocates with the information necessary to protect families from being evicted unlawfully.”

Some activists and advocates for the homeless have promoted the idea of moving homeless families and individuals into empty properties that are in foreclosure. In April 2009, Real Estate Pro Articles detailed some of the efforts to allow homeless persons to occupy vacant homes occurring around the country. The New York Times also explored this issue back in February 2009. Since April, however, stories about this alternative have largely vanished from media and the blogoshpere although the release of this new report may revitalize interest.