Estimated Economic Impact of an Eviction Right to Counsel in Detroit

Estimated Economic Impact of an Eviction Right to Counsel in Detroit

Stout was engaged by Rocket Community Fund to analyze the cost and benefits associated with a right to counsel for low-income tenants in eviction proceedings in Detroit and the cost savings that Detroit may realize by enacting such a right. Stout found that with an annual investment of approximately $16.7 million in a right to counsel, Detroit may recognize economic benefits of at least an estimated $58.8 million. The fiscal benefits are related to housing programs, health care, foster care for households experiencing homelessness, and the value of retaining residents who otherwise would have left the city following displacement.

The costs that would be avoided and benefits that would be enjoyed by Detroit include, but are not limited to, the education / juvenile justice costs associated with children experiencing homelessness, the effects of stabilized employment and income, and the cost of providing public benefits when jobs are lost due to eviction or the eviction process.

Additional benefits of having a right to counsel in eviction proceedings likely include more favorable outcomes for tenants (including decreased displacement) in legal proceedings, increased housing stability and ability to re-rent among tenants, and a decreased risk of population decline arising from housing instability.

As a part of this report, Stout quantified the specific economic value lost due to people migrating out of Detroit related to displacement from eviction. This included calculating the value of an individual resident of Detroit (largely derived from federal funding received for individuals) and then estimating the amount of people who would migrate from Detroit due to disruptive displacement. This totaled an estimated value of $28.7 million dollars that would be lost by the city due to migration out of the city linked to displacement from eviction. The report examined an eviction right to counsel (ERC) as a potential solution to retaining a portion of these residents.