Crowdfunding is nothing new. The idea of “passing the hat” or asking friends and family for contributions to support a venture or pay down a debt is as old as civilization itself; in fact, I’ve argued that value exchange – trading one thing of value for another thing of value, often called “the market” – is the essential ingredient of civilization or at least a necessary condition for it. But crowdfunding today is understood usually as the online collection of resources through various platforms and social media. For a history of its development, it’s worth looking at Fundable’s timeline of crowdsourcing including passage key legislation, the JOBS Act in 2012 which changed the regulatory framework for online crowdfunding. Last month I heard from GoFundMe, a crowdsourcing platform founded in 2010 about an increase in fundraising campaigns for rent money to prevent eviction.
I had an exchange with Margaret Richardson, Chief Corporate Affairs Officers at GoFundMe about a 40% increase in eviction fundraisers from pre-pandemic levels. In March and April of this year, GoFundMe saw a 20% rise in campaigns related to an eviction. I was curious about these figures and what they might mean. In the end, the best solution for eviction caused by lack of money to pay the rent is fast, cash assistance, not changes to tenant landlord laws. Over the years, an obsession with eviction has formed, blaming it for everything from sexually transmitted disease to poverty itself and death. I’ve had to say over and over again that evictions don’t cause poverty and its resulting consequences, but poverty causes evictions. The obsession with punitive measures has diluted and distracted real efforts to more efficiently get help to people who need it. Crowdfunding has filled in that need. Here’s the exchange and my comments are in italics.
In general, how does the 40% increase compare to other fundraisers for personal needs? What was the baseline over time? I’d like to see the trend since the earliest point of measurement to gauge the changes.
The 40% increase in the number of eviction fundraisers started on GoFundMe compared to levels during the same period pre-pandemic marks a substantial, ongoing shift in unmet housing needs. For context, since the start of the year, we have seen more than 14,000 eviction fundraisers started. Just last month, eviction fundraising increased by 30% on the platform signaling that this is an ever-increasing need. When we look at how much these fundraisers are raising, we have seen a 75% increase in the total amount raised pre-pandemic to today. What is encouraging is how individuals and communities are showing up for each other, collectively donating millions of dollars to support those facing eviction.
And imagine if we had a simple to use platform that allowed government to use its subsidy powers to use the banking system to direct cash to families in need. If we shifted resources in the billions of dollars being used for low income housing tax credits (LIHTC) to this sort of relief, the benefits would be widespread.
From GoFundMe’s perspective, what does this data mean? Does it validate the notion that some have that we have an “eviction crisis” or does it represent broader economic trends? The original message indicated a relationship between the uptick and recovering from the pandemic? Is it inflation?
Behind these numbers are the stories of individuals and families who are feeling the real effects of our nation’s housing crisis. While it does indicate that evictions and unmet housing concerns are on the rise, we know these experiences are not happening in isolation – and where GoFundMe can step in is to provide a place where people can ask for the help, they need from those who are in a place to give.
Richardson wisely avoided speculating on this controversial issue. The truth is that completed evictions are still a rare event when considered across the entire rental housing economy. Even during the epidemic, the “tsunami” of evictions never materialized, but billions in federal rent relief went unspent or was lost. It is unpopular to call out the paucity of real data on evictions and the truth that while painful for real people, evictions because of job loss or other personal crises could be largely avoided if we had sensible cash based programs in place.
What does the qualitative data tell us? That is, there might be an uptick in fundraisers but what’s the typical narrative around them? Is it unemployment, illness, or other life events?
When it comes to the increase in eviction fundraisers, we are seeing thousands of deeply moving stories that underscore just how profoundly the growing housing crisis is affecting individuals and families throughout our communities. For example, Gustavo Martinez and his family have lived in their Los Angeles apartment for the past 37 years. Now, they are facing a no-fault eviction after their landlord gave them a 60-day notice, and are struggling to find options for affordable rent.
We know that about 35% of American adults do not have $400 available to help cover an unexpected expense. For those experiencing eviction or the threat of eviction on such short notice, GoFundMe is available as a resource of support, providing those facing immediate needs with a fast and effective way to share their story with those who are ready to help.
It’s right there: a third of Americans “do not have $400 available.” The eviction notice is this case came with the sale of a building in a very expensive real estate market, Los Angeles, where buyers are spending money to rehabilitate buildings which requires spending significant money which current residents can’t afford. In some cases, it is a single-family home rental being sold to an owner occupier. The difficulty here for Gustavo is that as he says, “With the current rental market in Los Angeles being very expensive, we are struggling to find affordable housing options that fit within our budget.”
Los Angeles voters passed measure HHH back in 2016 which allocated $1.2 billion for affordable housing. Yet, in 2024 Gustavo and his family and many others are still struggling. What’s needed in Los Angeles is not more money for affordable housing, but more housing so that it is affordable. Until then, many families will have to rely on “passing the hat” using platforms and social media. Policy makers at all levels should ask, “Why?” The answer is families like Gustavo’s need cash, not grandstanding legislation or massively expensive LIHTC projects.
