Michigan's ban on residential evictions ends — but new program can help tenants

LANSING — Michigan launched its $50-million Eviction Diversion Program Thursday after Gov. Gretchen Whitmer's moratorium on residential evictions for non-payment of rent expired at the end of the day Wednesday.

The eviction ban continues in Detroit, however, where the 36th District Court announced Thursday the freeze on residential evictions will continue through Aug. 15. Chief Judge William McConico said removing people from their homes during the current pandemic "could prove to be devastating."

Statewide, courts are facing a backlog of an estimated tens of thousands of residential evictions.

Advocates for tenants question whether the new eviction diversion program, administered by the Michigan State Housing Development Authority, will be sufficient to prevent large numbers of tenants from becoming homeless during the coronavirus pandemic.

Whitmer said Thursday that no other programs to address residential evictions are planned at this time.

The program is intended to help renters who have fallen behind on their payments because of COVID-19 and their landlords who want to recoup missed payments, the state said in a news release.

Tenants making up to 100% of area median income are eligible for the rental assistance. Participating landlords can receive up to 90% of a tenant’s unpaid rent in one lump sum. In exchange, landlords must dismiss all late fees, up to 10% of the amount due, and allow tenants to stay in their homes.

If a tenant is behind on $1,000 rent, the landlord can receive up to $900 and must forgive the remaining $100. If they get $450 for $1,000 rent, they must forgive $50, and the tenant would be responsible for paying the remaining $500 within a year. 

More:As Michigan's eviction moratorium lifts Thursday, advocates tell tenants to seek legal aid

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“At a time filled with a lot of uncertainty, the Eviction Diversion Program offers some peace of mind for tenants and landlords,” said Kelly Rose, MSHDA’s chief housing solutions officer.

“We understand how important housing is as a foundation for success in many other areas of life. That’s why we’re committed to leveraging the EDP to preserve tenant housing in as many cases as possible across the state.”

More information about the program is available at www.Michigan.gov/EDP.

The state Legislature appropriated money for the program from federal coronavirus relief funds.

Whitmer's moratorium on residential evictions for non-payment of rent, imposed in March, expired despite calls by tenant groups for Whitmer to extend it.

"The wave of evictions will be so strong that the measures that the court has taken and then the new housing program that the state has created won’t be enough to fully blunt that wave," said Jim Schaafsma, an attorney with the Michigan Poverty Law Program.

Jeremy Piper, a Flint attorney who represents landlords, said the state program is "a welcome development to most landlords," and reopening the court system is long overdue.

"Landlords are not a monolithic group comprised of the independently wealthy or hedge funds," and "tenants are not all unemployed," Piper said. "The reality is somewhere in the middle and that is why there are district court judges, to serve as referees and fact finders. It is time to let the system work as designed."

In Detroit, where the 36th District Court began its eviction moratorium related to coronavirus prior to Whitmer's initial order, McConico said the eviction ban will also continue longer.

"We want to ensure that as our number of positive COVID-19 cases continue to rise, no one is left facing homelessness at this critical time," McConico said.

"Removing people from their homes right now could prove to be devastating, as our efforts to control this virus depend upon the ability of all to self-isolate, practice social distancing, and exercise frequent hand-washing."

In June, the Michigan Supreme Court issued an order setting priorities for processing cases based on the length of time rent has not been paid, urging additional use of remote proceedings, highlighting the availability of a dispute resolution program to help resolve cases, and expanding the use of conditional dismissals.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4.  Read more on Michigan politics and sign up for our elections newsletter.