In Nebraska, a significant challenge emerges for former public housing tenants even after eviction: the looming involvement of debt collectors. Crystal Hoss, a single mother of four, experienced this firsthand when she fell $250 short on her rent while living in a Southside Terrace row house in Omaha. Her eviction not only forced her family to relocate but also initiated a financial reverberation that would further impede her efforts to secure stable housing. The debt she owed to the Omaha Housing Authority (OHA) exponentially expanded to $1,372 by the time it landed on her credit report, significantly tarnishing her financial reputation.
From 2019 to 2023, the OHA referred the debts of at least 284 former tenants to Credit Bureau Services, a Fremont-based collection firm. This action is not unique to Omaha; several other housing authorities in Nebraska have adopted similar practices, even as some subsidized housing providers in the Midwest have begun to retreat from this approach. Critics argue that entrusting the financial obligations of already strained renters to debt collectors only exacerbates their poverty, creating an almost inescapable cycle.
In a notable pivot, OHA announced a shift in their approach towards managing former tenants’ debts. The agency has commenced collaboration with Clear Recovery, a debt collection firm based in Omaha, which has pledged not to report the debts of former tenants to credit bureaus. OHA’s CEO, Joanie Poore, stated the agency’s commitment to reconciling debts without adversely impacting the credit scores of its tenants.
This transition in debt collection practices came about after a critical audit and subsequent scrutiny by the U.S. Department of Housing and Urban Development (HUD) highlighted financial mismanagement within OHA during the 2010s. Efforts to redress these shortcomings included enhanced debt collection strategies. However, HUD spokesperson Brian Handshy clarified that employing a debt collection agency is at the discretion of the public housing agency’s leadership, with no federal mandates dictating this choice.
In 2023 alone, OHA referred 106 former tenants to collections. The precise financial recovery from these efforts remains unclear, although the agency annually writes off hundreds of thousands of dollars in unrecovered tenant debts. Nonetheless, this practice is not universally adopted across all housing agencies within the state. For instance, the Lincoln Housing Authority and Douglas County Housing Authority either pursue collection on a much smaller scale or not at all, reflecting varied approaches to managing tenant debt across Nebraska.
The ramifications of debt collection on former tenants extend beyond immediate financial strain. Collections can severely damage credit scores, complicating future attempts to secure housing or loans—challenges further exacerbated for those with an eviction on their record.
Notably, other public housing agencies across the country, including those in Chicago, Des Moines, and Kansas City, Missouri, have steered away from debt collection practices. They argue these efforts are often futile given the financial situations of the tenants involved. Instead, these agencies seek alternative methods to resolve outstanding debts, such as offering repayment plans when tenants reapply for subsidized housing or utilizing options to garnish state tax refunds.
The narrative of Jasmine Frampton, who faced eviction from Southside Terrace over a relatively small sum, underscores the human cost behind these policies. The financial demands levied on Frampton and others highlight a pressing need for a more compassionate and effective approach to handling tenant debts in public housing. While OHA’s recent policy shift offers a glimmer of hope, it also prompts considerations for broader systemic changes to ensure that those struggling with poverty are not further marginalized by the very systems meant to support them.
