Keep Information Free: Oppose the HOMES Act
A critical part of doing business in the modern economy is access to information. When deciding which car to purchase, people typically compare several models based on their cost, safety, capacity, fuel efficiency, and a variety of other features. When deciding where to go out to eat, one can check out thousands of customer reviews commenting on the quality of the food, the service, and the ambiance before choosing a restaurant. There is also a remarkable variety of sources for this kind of information–for any given category of product or business, you can find some combination of expert professional reviewers and aggregators of user feedback competing to provide the most accurate and up-to-date data on the subject.
In an economy as large and complex as the one we inhabit today, access to this kind of information is key to making sufficiently informed decisions for markets to function appropriately. Otherwise, it would be trivially easy for bad actors to take advantage of a naïve public by selling substandard goods or services and suffering no consequence. The more information there is available on the past behavior of each market participant, the more incentives all parties have to engage in cooperative, prosocial behavior and not abuse the system.
A bill currently before the Massachusetts State Legislature, H.4505[1], disregards this principle by allowing rental property tenants to have the court records of their past evictions sealed and by preventing any further use of these records for tenant screening or any other commercial purposes. Will this make life easier for tenants with eviction records? Potentially, but only at great cost to landlords and other tenants. In this excellent article[2], MassLandlords.net explores some of the negative side effects that this bill would likely create. A condensed summary of these effects can be found below:
Prevents screening abusive tenants: While most tenants just want to play by the rules and enjoy a safe, maintained place to live, others are willing to abuse the system by refusing to pay rent (even when they can afford it) or creating an unpleasant, hazardous living environment for their fellow tenants. It is unfair both to landlords and to the majority of tenants to prevent property owners from investigating the records of prospective tenants to determine who is likely to cause problems for the broader community.
Further disadvantages low-income tenants: If eviction records are no longer usable as a tool for screening renters, housing providers will have to rely more heavily on other metrics for tenant screening. This will likely mean greater emphasis on income and credit scores, making it significantly harder for low-income tenants without eviction records to find a place to live. It would also increase the burden on female, black, and Hispanic renters, who on average have lower income[3] and credit scores[4] than the general population.
Hinders dispute resolution: Court records can be a useful resource for both tenants and housing providers who wish to resolve inconsistencies between multiple parties’ accounts. For instance, a housing provider contacted as a reference for a tenant’s application to a new apartment stated that the tenant still owed him $1600 in back rent; the tenant denied this, saying she didn’t owe any money. By consulting court records, the new housing provider was able to establish that the tenant was telling the truth and approved her application. Under the eviction sealing bill, the new housing provider may not have been able to access these records and could have easily decided that the tenant wasn’t worth the risk and denied her application.
Prevents tenants from evaluating landlords: Open court records aren’t just useful for housing providers evaluating tenants; they can be used in the other direction as well. Not all housing providers have the same criteria for eviction; some are willing to expend considerable effort to work with tenants who fall behind on payment, but others are less forgiving and more likely to take renters to court. Tenants who have less stable income sources or other extenuating circumstances may prefer the former, but this kind of selection would be difficult or impossible under the proposed eviction sealing bill.
Creates opportunities for corruption: Even in Massachusetts[5], courts don’t always live up to the promise of dispensing justice in a neutral, impartial manner. In the absence of transparent access to records, it is easier for judges to favor wealthy and/or well-connected insiders, depriving everyone else of equal access to justice. Under the system that would be imposed by this bill, the same dynamics could be introduced to the legal processes around eviction.
Participants in the rental housing sector already have significantly less access to information than participants in other economic sectors. It is much harder to find detailed, relevant information on a given housing provider or tenant than it is to find information on the quality of a restaurant, a movie, or a rideshare driver (or passenger). Removing one of the few sources of information that does exist–the official record of a tenant’s eviction history–will not improve this situation. Indeed, as described above, it would likely exacerbate existing issues and create a host of new problems for both housing providers and tenants.
by Chris Lehman
