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Lessons for Designing Local Eviction Diversion Programs

Just Diversion: Designing Eviction Mediation to Address Incentives and Inequities
Deanna Pantín Parrish
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In the wake of strong renter support during the COVID-19 pandemic, some localities have begun to stand up their own permanent eviction diversion programs. However, without federal intervention, localities face a larger challenge to developing and sustaining programs that solve the complex issue of housing instability than programs that have some federal support.

This article examines the federal government’s role in promoting mortgage foreclosure mediation programs during the Great Recession and how this model can be applied to eviction programs. The researcher examines literature related to the Troubled Asset Relief Program and Home Affordable Modification Program, the role of the Federal Housing Finance Agency (FHFA), and eviction research to suggest policy recommendations for developing strong eviction diversion programs.

Key findings:

  • The design and outcomes of foreclosure mediation programs were shaped by the federal government’s involvement in the mortgage foreclosure crisis, which rewarded mortgage servicers for reducing or mitigating foreclosure sales.
  • The FHFA served as the federal enforcement mechanism for these conditions, as they had authority to direct mortgagors Fannie Mae and Freddie Mac to rewrite or modify loans.
  • Legislative requirements and court orders can compel parties to participate in eviction diversion, but building awareness and buy-in for programs is also important. This can be achieved by including landlords and tenants in the program design process.
  • Reducing the potential costs for tenants through record sealing and prefiling mediation can encourage tenant participation.
  • Holistic programs that provide a wide range of services, such as legal and financial supports, are more successful for tenants and may promote landlord participation.

Policy implications:

  • To help eviction mediation programs meet their intended purpose of settling cases and increasing housing stability, it’s crucial that they are thoroughly and systematically assessed.