BY THE MARYLAND ACCESS TO JUSTICE COMMISSION
“ Skyrocketing unemployment.”
“ Food insecurity.”
Dire terms, all perfectly appropriate, have frequently filled discussions of the COVID-19 pandemic and its enduring impact. As the Access to JusticeCommission analyzed these pressing social concerns—through the Attorney General’s COVID-19 Access to Justice Task Force and the Access to Counsel in Evictions Task Force, several things became abundantly clear.
First, that Marylanders of color were experiencing the worst effects Eviction tsunami. from the pandemic at a disproportionately high rate. Second, that most of these experiences were not newly spawned by COVID-19; they were rather longstanding and systemic troubles merely exacerbated by the pandemic. And finally, that all of these “life issues” were tied to the civil justice system.
What the pandemic laid bare for everyone to see is that race inequities pervade our health, economic and criminal justice systems. What is less well known, but equally plain, is that the civil justice system both causes new and exacerbates existing racial inequities that affect every aspect of a person’s, including housing, health, hunger, personal safety and economic security.
In most instances, even though the right to counsel movement in civil legal cases is catching steam, an individual facing a case in the civil justice system does not have a right to an attorney if they cannot afford one. Yet, research continues to demonstrate how individuals who cannot afford a lawyer in civil legal cases face worse outcomes in not only their cases, but in their lives, the effects of which also spill over to community health and well-being. As the pandemic persists, more and more Americans from low-income communities, and particularly communities of color, have found themselves entwined in a civil justice system, with many facing homelessness, joblessness, and civil legal cases that involve basic human needs. Unfortunately, even before the COVID-19 pandemic, nearly 80% of the civil legal needs of low-income individuals went unmet, even though “justice for all” is a core American value. And people of color make up nearly 74% of the individual clients of Maryland Legal Services Corporation (MLSC) grantees.
Homeownership, Evictions, and Housing Insecurity
Homeownership has long been viewed as the single most important means for building wealth for low-income families in the United States. Unfortunately a number of contributing factors add to the growing homeownership gap between low-income households, particularly households of color, and white households. Notably, systemic barriers like the racial wealth divide not only affect the ability to purchase homes outright, they also affect their ability to hold onto their homes once purchased.
One specific barrier that continues to disadvantage low-income and minority homeowners has to do with inequity in the property value assessment system. These inequities often lead to unfair tax burdens and give rise to tax liens and foreclosure sales. Research shows that property tax burdens disproportionately impact low-income residents, especially those of color. For example, in Baltimore County, 89% of the lowest value homes are overassessed in comparison to just 37% of the highest value homes according to a nationwide analysis conducted by researchers at the University of Chicago. What this means is that low-value properties, which tend to be owned by Black and brown low-income residents, face higher tax burdens than the owners of high-value properties.
How that plays into the civil justice system is when a homeowner falls behind or is unable to pay their property tax (in many cases due to unforeseeable illness or joblessness), tax-lien and foreclosure investors bid on and purchase foreclosed properties in tax foreclosure auctions for a fraction of the cost. The process not only robs homeowners of their best chance to build wealth for their families, it often leaves entire families homeless and without a place to live as new investors are empowered with the right to evict. In these instances having legal assistance can mean the difference between saving a family’s home and losing it to foreclosure. Unfortunately, for too many families already struggling to make ends meet, finding the financial resources to afford a lawyer is not an option, and help through legal services is limited, yet the consequences are generational.
Evictions and Housing Insecurity.
To date, national studies show that Black and Latinx renters in general, and women in particular, are disproportionately evicted from their homes. More recently, research from Maryland demonstrated similar disparities for minorities with one study reporting that between January 2018 and June 2019, the number of Black female-headed households evicted in Baltimore City was 296% more than evictions of households headed by white men and 2.3 times higher for Black male-headed households. African Americans and Latinos have also been disproportionately impacted by the housing and economic crises brought on by the COVID-19 pandemic—that have increased the specter of evictions for those communities.
For these families, and other low income households, a myriad of systemic barriers make fighting harmful evictionin rent court increasingly difficult. Complicated court proceedings and confusing court noticies combined with work and child care constraints, make it hard for some tenants to even attend court proceedings. Meanwhile, tenants that make it to court often end up fending for themselves, as only 1% of tenants have some type of representation, compared to 96% of landlords. As a result, many families suffer displacement and eviction that can have long term consequences on the family. This is why the Commission pushed for an Access to Counsel in Evictions law and is now pushing for funding of this law, as well as an eviction database that would allow for equity assessment in eviction cases.
Consumer Debt and Debt Collection
Individuals and families with debts that end up in collections are oftentimes portrayed as having made poor personal financial choices, but what the pandemic has shown us is that consumer debt (e.g., credit card debt, medical debt, and student loan debt) can become difficult to manage for any household, especially when experiencing emergencies, surprise expenditures, or reductions in income. Unfortunately however, families in low-income communities, particularly individuals and households in communities of color, face a number of financially devastating obstacles including mounting high interest debt, consumer debt collection lawsuits, repossession and garnishment.
According to a study by the Maryland Consumer Rights Coalition, for example, the existing racial wealth gap contributes to non-white borrowers having more consumer debts in collection and higher debt loads. This is, in large part, due to lending practices that target consumers of color with high-interest debt products, such as auto-title loans and payday loans.
The racial wealth divide is not only a result “of limited access to financial resources, it is also a result of a number of systemic disparities that arise in the civil debt collection process. For example, more debt collection lawsuits are filed in counties that have large communities of color. These are families that traditionally have less financial resources to weather financial crises and that are less likely to be able to afford an attorney when hit with a debt collection lawsuit. A study by Pew Charitable Trusts estimates that fewer than 10% of defendants in debt collection lawsuits have legal representation, in comparison to nearly all plaintiff-debt collectors, and 90% of debt collections cases end in a default judgment against the defendant. The result is cyclical in that consumers, already facing financial instability, are left in an even worse financial position, as garnishment can allow plaintiffs to seize up to a quarter of a worker’s pay that is deposited in a consumer’s bank account. Between garnishment and repossession consumers are often left without essential income, cars, and household assets to get by.
Public Benefits: Unemployment
During the COVID-19 pandemic, unemployment benefits became a lifeline for many Marylanders—a lifeline that allowed individuals to keep their families fed and housed. Employment statistics show COVID-19’s impact on Black communities. In the first quarter of 2020, Black unemployment in Maryland was 6.1%, nearly twice the rate of whites. With historic levels of unemployment in the second quarter of 2020, the unemployment rate for Black people increased to 13% and remained about twice that of whites. Hence, the long delays in processing unemployment insurance (UI) applications disproportionately impacted Black families just as the global pandemic was causing disproportionately negative health outcomes in the same communities.
Another group that was similarly challenged and whose applications were delayed were those communities of color facing language access barriers to the civil justice system. Title VI of the Civil Rights Act of 1964 prohibits any recipient of federal funds to discriminate on the basis of national origin. Yet, the Maryland Department of Labor, Licensing and Regulation did not provide non-English web-based or telephone access for any language other than Spanish. And even in Spanish, access is very limited because UI documents are not available in translated formats, multilingual staffing is sparse, and UI appeals are not translated into Spanish.
These barriers intersected with other challenges faced by low-income populations, like technology barriers. Low-income individuals often lack sufficient access to, and familiarity with, electronic means for claims submission. For those who do have access, language barriers force some to rely on others to navigate and submit electronic applications on their behalf, which often led to the non-English speaking applicant to not be able to access the UI portal that contained all their application information and updates.
Civil legal aid organizations were critical partners in helping many black and brown Marylanders struggling to apply for or appeal wrongfully denied unemployment benefits.
https://s3.us-east-2.amazonaws.com/propertytaxdata. uchicago.edu/nationwide_reports/web/Baltimore%20 County_Maryland.html#5_who_is_over-assessed
https://www.federalreserve.gov/econres/notes/feds- notes/disparities-in-wealth-by-race-and-ethnicity-in- the-2019-survey-of-consumer-finances-20200928. htm
https://www.povertylaw.org/wp-content/up- loads/2021/07/Consumer_Law_and_Race_report_ v5-2.pdf
https://www.propublica.org/article/debt-collectors- have-made-a-fortune-this-year-now-theyre-coming- for-more
https://www.pewtrusts.org/en/research-and-analysis/ reports/2020/05/how-debt-collectors-are-transform- ing-thebusiness-of-state-courts