Insurance Against Homelessness
The Homelessness Problem
In Massachusetts there are roughly 15,000 people experiencing homelessness at any given time. As of mid-2015, for example, there were 4,500 homeless families receiving emergency assistance (“EA”), of which 1,250 were in overflow hotel rooms, with some individuals in shelter and the balance unsheltered. The numbers bounce around, but they are chronically non-zero.
The Commonwealth pays around $3,000 per family per month to provide shelter. The average stay is 10 months.
Now consider this: On any given day, private landlords in Massachusetts have enough vacant units to take all of these families out of shelter and hotels. And these units could be rented for on average just $1,000 per family per month.
Landlords don’t typically vie for homeless applicants because they have minor CORI (criminal histories) and a very unstable housing history. What can be done to encourage landlords to take in the homeless?
A Solution: Insurance Against Homelessness
Hundreds of MassLandlords members (and counting) are intrigued by the possibility of “insurance against homelessness” or a “landlord tenant guarantee”. The idea is to insure a private landlord (up to some limit) for damage, unpaid rent and attorney’s fees if they take a tenant out of shelter or motel housing. This guarantee eliminates the perception of risk. Supportive services and permanent rental subsidy are still necessary to keep the family or individual stably housed.
The Seattle Landlord Liaison Project is a role model for Massachusetts. They have successfully housed hundreds of families over the last five years for far less than the cost of motels. Similar programs are in place in parts of Pennsylvania and Virginia.
The way the program is being implemented in select Massachusetts municipalities:
- Landlords receive $10,000 insurance for unpaid rent, damage, and attorney’s fees incurred in the first two years’ tenancy.
- Tenants are forgiven minor CORI and past homelessness on the rental application.
- The Commonwealth pays for a dedicated landlord adviser to mediate disputes and safeguard the state’s interest in the guarantee.
Such a program offers a win-win-win. It would supplement existing programs like HomeBASE, MRVP, and Section 8 to reduce the landlord’s perception of risk at the application stage. It would more quickly move the homeless out of hotels and into stable homes with kitchens. And because Seattle has been collecting data for five years, we can accurately predict that it would reduce the Commonwealth’s spending on a per-person basis.
MassLandlords made minor contributions to a Senate Commission Report published March 3, 2015. Although the wording in that report reflects partisan politicking and is not what our members respond to, the basic idea has been gaining traction since that time. A majority of our members would be likely to participate in a program as outlined on this page.
To see what Massachusetts landlords think about Insurance Against Homelessness, check out these two surveys:
- Related Article, MassLandlords member data: Insurance Against Homelessness Survey Results (October, 2015)
- Related Article: Insurance Against Homelessness Compromise Feedback (November, 2015)
For a comparison of programs in use elsewhere, see this comparison chart prepared by Peter Shapiro, long-time homeless advocate:
Summary Slides for United Way Grant (August 2016):
Latest Massachusetts Homelessness Statistics
Number of homeless families entering the system and in motels:
Number of Massachusetts residents experiencing homelessness in shelter and motels combined (DHCD EA Monthly Report):
Boston Homelessness: Landlord Tenant Guarantee Operational
Since 2016, Boston has been quietly experimenting with a landlord-tenant guarantee in the model advocated for here. The program was first started by Lydia Edwards when she was at the Department of Neighborhood Development, but after she decided to run for City Council in District 1, there was no longer a DND champion. It is believed that the City has set aside approximately $40,000 for guarantees but that only three guarantees have been issued as of October 2018.
Worcester Homelessness: Landlord Tenant Guarantee Planned
The City of Worcester’s Task Force for Sustaining Housing First Solutions recommended a landlord-tenant guarantee along the lines proposed here, among other proposals. Worcester City Council unanimously endorsed the recommendations of the Task Force on July 17, 2018. The city manager had funded the guarantee program as of October 2018 at $25,000. MassLandlords is providing the landlord liaison and housing search function. The Central Massachusetts Housing Alliance administers the continuum of care for prospective renters.
The City of Worcester has a “Housing First Coordinating Council” and is looking for grants to expand the program. Contact the Department of Health and Human Services.