Given that the NY Times Upshot has written a very interesting piece about the geography of eviction and given that I am teaching graduate urban economics this fall at USC, permit me to make a few points about the economics of housing eviction.
First we need to make some assumptions. Jill owns a house and Matt wants to rent her house. Jill has an opportunity cost. She can live in her own house or rent it out to someone else. Matt has an opportunity cost. He can rent or buy another house. If Matt and Jill agree on a one year rental contract, then this deal must make both of them better off than if they don't sign the deal.
Case #1: Suppose that the contract states that Jill cannot evict Matt during his 1 year of entitled residence. Economists will worry that there will be several unintended consequences. First, Jill will raise the rent for Matt as a type of risk premium. She will also try (perhaps using Facebook) to screen out high risk people who may be more prone on average to default on monthly rent.
If you doubt this, recall the work by Acemoglu and Angrist on the unintended consequences of the Americans with Disabilities Act.
If Matt knows that he cannot be evicted, this creates a moral hazard effect such that he will be even less likely to pay his monthly rent. If Jill anticipates this, she will be less likely to rent her place to Matt because she anticipates that she will collect little rent from him.
Case #2: Suppose the contract says that Matt can be evicted by Jane with 1 week's notice if he is late in paying his monthly rent. If Matt knows this and believes this contract will be enforced, he will self protect himself from risks such as sickness or short periods of unemployment by engaging in risk pooling with his friends and family (see Robert Townsend's work on risk pooling in India).
If Matt has no friends or family to engage in such risk pooling and Matt is unable to find work, then this would be a case of Milton Friedman's housing vouchers. Friedman would support having housing vouchers to provide a basic level of housing for the poor. Tax dollars would be used to provide these housing vouchers.
The NY Times is implicitly asking the property owners to provide social insurance by collecting $0 rent from those who experience a negative shock. I am very sympathetic that those who experience a surprise shock to their health and labor market status deserve support but right now we are asking the property owners who trusted them with their private property to "nationalize" their property to protect the poor during their time of need.
This sounds like a distorting tax.
Everyone should sit down and watch Milton Friedman's video on education vouchers or read Peter Ganong's 2018 co-authored piece.
An alternative proposal would be to pay the owner of the apartment the contract price and for the individual who rented the apartment to use her own funds, borrowed funds and the state's provided voucher to jointly fund the rental unit.
The threat of eviction actually creates incentives to encourage property owners to rent out their places. If we remove this threat, where will many people live? Will homelessness rise further?