No Place to Call Home

The Unintended Consequences of Good Causes

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On the outskirts of East Austin, there’s a quirky, quaint little neighborhood called Community First! Village. Reflecting its missional nature, the village has street names like Peaceful Path and Goodness Way, all lined by mobile homes, RVs, and tiny homes. The single-room tiny homes—which make up two-thirds of all residences in the village—rely on shared kitchen and bathroom facilities. These “substandard” residences, which I’ve toured, are tidy and quite nice, and each has its own porch. More importantly, they’re home to 430 formerly homeless Austinites, now living with a measure of independence, and paying average rents of about $385/month.¹

The community is located just off Hog Eye Road beyond Austin city limits—where there’s no zoning, a workaround made necessary after its founders failed to overcome neighborhood opposition. Another factor that makes the model viable: its ability to evict problem tenants—41 in 2023.

The takeaway: if zoning determines where low-cost housing can go, operating rules like eviction law determine whether it can function at all.

Last week, I wrote about the destruction by design of the single-room occupancy (SRO) sector—the “banished bottom” rung of affordable market-rate housing that once housed millions of low-income Americans. The essay generated a lot of thoughtful feedback, including responses from Christian Britschgi in his Rent Free newsletter and from Samuel Hooper, who’s working on model SRO legislation. On X, Matthew Yglesias agreed with the broad argument but flagged a crucial omission: “if you’re going to have ultra-cheap market rate housing you do also need to be able to evict problem tenants, which cuts against a lot of recent policymaking.”

He’s right—and he’s highlighting a shift that has reshaped the SRO operating model.

Historically, many SROs functioned under “hotel” or “lodger” rules rather than full tenant law. Lodgers were treated as temporary occupants, and owners could terminate a stay quickly—sometimes immediately—without going to court. In the late 20th century, however, cities increasingly reclassified SRO residents as full tenants, folding these buildings into standard eviction procedures and rent-regulated regimes. Once that happened, removing a resident required the same legally defined notice periods, filings, and court proceedings as any apartment eviction. That shift made the old SRO operating model—based on rapid severability—far more legally complex and economically fragile, especially as these buildings came to house people with severe mental illness, addiction, or complex service needs.

That severability was precisely what prompted calls for stronger protections. In New York City, the 1980s wave of SRO conversions—driven by redevelopment incentives and stricter code enforcement—depended on this ability to remove residents quickly and at scale. The backlash helped fuel a tenants’ rights movement aimed at bringing SROs under full tenant-law protections. Today, the few SROs that remain are treated like any other apartment: residents can only be removed through a formal legal process overseen by the courts. New construction of SROs remains illegal in New York, however.²

It’s worth noting that Community First benefits from Texas’s comparatively fast, flexible eviction process, which has short notice periods, quick hearings in Justice of the Peace courts, and relatively streamlined procedures. In other words, the operating environment that allowed SROs and other low-cost housing to function historically is still somewhat intact in places like Texas, but has been largely eliminated in the blue cities where SROs are most needed.³ That loss of operating flexibility has raised costs and rents—and in some cities has made SROs financially unviable.

Tenant protections against arbitrary removal are completely legitimate and morally necessary: a lease is a contract that defines each side’s rights, and ending it requires a legally valid cause. Most states recognize two categories for evictions. “At-fault” causes include nonpayment, substantial lease violations, nuisance, illegal use, or refusal of access—with nonpayment of rent being the most common factor. “No-fault” causes include owner move-in, major renovations or demolition, or withdrawal of the unit from the rental market; these typically require longer notice and sometimes relocation assistance. Every state in America already requires a landlord to have a lawful reason to terminate a tenancy before the lease ends. “Self-help” evictions—in which the landlord harasses the tenant, shuts off the utilities, changes the locks, or throws out a tenant’s belongings—are generally illegal.

What’s changed in recent years is that many states and cities have adopted so-called Good Cause laws that go beyond this baseline—adding longer notice periods, limiting non-renewal, and capping rent increases to prevent “renewal denial by rent hike.”⁴ To be clear, the absence of a Good Cause statute—the default in most states—does not mean landlords can evict tenants “at will.” What Good Cause laws change is whether landlords may decline to renew a lease at its natural expiration without legal justification.

Good Cause has become a cause célèbre of the modern tenants’ rights movement—and understandably so. An eviction doesn’t just remove someone from their home. It ruins their credit, triggers tenant-screening blacklists, disrupts work and schooling, damages health, and often pushes people toward homelessness. An eviction should not be granted lightly. Many evictions result from circumstances often beyond the tenant’s immediate control, like job loss, medical emergencies, divorce, or domestic violence. Others arise from addiction and mental illness, while some reflect genuinely bad behavior—people who destroy property or endanger others. The question that Good Cause advocates pose is this: is society willing to send a single mother into homelessness because temporary hardship impaired her ability to pay rent?

A better question is: does Good Cause actually work?

Eviction prevention laws are not costless and come with tradeoffs. In particular, Good Cause can add considerable expense to landlord operating costs, thanks to longer unpaid rent periods, increased legal fees, and ongoing operating costs—which ultimately translate into reduced availability and higher rents. Operators of large apartment buildings, especially those at the higher end of the market, can more easily absorb these costs. But for mom-and-pop landlords, the additional costs may make small-scale, lower-rent apartment buildings economically infeasible; that goes for all housing types that rely on thin margins—SROs chief among them. More, these laws often saddle landlords with tenants they are not equipped to support, or who pose safety hazards to other residents. The Los Angeles Times has recently chronicled the troubles of LA’s Skid Row SRO operators, which have cited the difficulty of problem tenants as one of several factors driving their financial collapse.

The unintended consequences of eviction prevention policies are documented in recent empirical work (see here, here, and here). This research shows that stronger eviction restrictions tend to raise rents, lower vacancy rates, and encourage more selective screening of prospective tenants. The studies also find that eviction prevention policies can unintentionally increase homelessness by making landlords less willing to rent to higher-risk tenants. The evidence also shows that rental assistance programs prevent more homelessness than eviction-prevention laws—and at lower public cost—because they address missed rent before it becomes grounds for eviction.

Good Cause policies are intended to protect tenants, but the anecdotal and empirical evidence suggests they might instead be jeopardizing the most vulnerable by reducing the viability of the most affordable housing. Like New York’s rent stabilization regime—enacted more than 80 years ago in response to its never-ending housing emergency—these rules are products of extreme housing scarcity—brought on in no small part by the illegalization and destruction of cheap housing like SROs. It’s no coincidence that the jurisdictions with the strictest versions of these laws also have the deepest housing shortages and the highest homelessness rates. In scarcity environments, tenant protections tend to preserve access for a lucky incumbent few while making housing harder to find for everyone else. Where supply is abundant, landlords must compete for renters, and their interests naturally align with those of tenants. Where supply is constrained, tenants must compete with each other—and those with the most money win. The problem is not an epidemic of bad landlords; it is the simple arithmetic of too little housing.

Good intentions haven’t produced good outcomes.

That doesn’t mean anything is likely to change: in the cities most in need of SRO-style housing, rolling back Good Cause or reinstating a separate lodger category would be political nonstarters. Tenant-protection coalitions are powerful and often reflexively skeptical of anything that seems to expand landlord discretion. But the evidence suggests these efforts are misplaced, especially when programs like rental assistance are shown to be more effective and less costly. As Matt Yglesias argued this week, “affordability means hard choices.”

The choice that scarcity cities have been making is between ensuring that nobody ever gets evicted, rather than ensuring that everybody gets housed. This has not produced broad-based affordability—and it has kept the banished bottom out of reach.

Community First! Village shows that single-room, shared-facility housing can give people who’ve spent years in tents, beneath underpasses, or out in Austin’s greenbelts something they haven’t had in a long time: dignity, stability, and a front porch of their own. Sure, residents complain about the availability of bathrooms, while others chafe at rules about cleanliness, quiet hours, guests, and substance use. Not everyone can handle it, and so some residents leave, while others are forced to. It was never meant to be utopia, which literally means “no place.” Today, 770,000 Americans have no place to live—but outside Austin, 430 formerly homeless people now do.

There is no future in which we solve homelessness or affordability without a massive expansion of housing—which means we must redirect our efforts toward ending scarcity conditions instead of applying bandaids to old, self-inflicted wounds.⁵ The question for policymakers and advocates is whether we are willing to accept “substandard” conditions and the operational practices—including evictions—that make deep affordability possible at scale—or do we continue to accept the unacceptable status quo?

After all, when we make housing illegal to build or impossible to sustain, eviction protection is meaningless for people who end up with no place to call home.

1. Community First is a project of the nonprofit Mobile Loaves & Fishes, which funded the project initially through private philanthropy, with later expansions receiving county support. The project also secured a rare HUD waiver allowing residents to use federal housing vouchers in units without private bathrooms, normally deemed “substandard” and ineligible.

2. For more on New York, see: B.J. Sullivan, “Single-Room Occupancy Housing in New York City: The Origins and Dimensions of a Crisis.”

3. While Austin has programs to support those facing eviction, eviction law is set at the state level and administered via county courts.

4. In both California and New York, for example, annual rent hikes are restricted to the lower of 10% or 5% plus inflation.

5. I’ve written about other land-use reforms like reducing minimum lot size requirements, legalizing family-sized apartments, ending local vetocracies, and allowing homes in commercial areas.