COVID-19

Report warns of a worsening affordability crisis for renters

Amy Scott Nov 19, 2020
Heard on: Marketplace
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Banners against tenant evictions hang from a rent-controlled building in Washington, D.C., in August. Eric Baradat/AFP via Getty Images
COVID-19

Report warns of a worsening affordability crisis for renters

Amy Scott Nov 19, 2020
Banners against tenant evictions hang from a rent-controlled building in Washington, D.C., in August. Eric Baradat/AFP via Getty Images
HTML EMBED:
COPY

The economic fallout from the pandemic is hitting the lowest-income renters especially hard.

That’s one finding from the new State of the Nation’s Housing report from the Joint Center for Housing Studies at Harvard University.

More than half of renters who earn less than $25,000 a year lost wages between March and September, according the report, compared to 41% of all households. As of late September, around 1 in 5 renters in that income group were behind on their rent. Households of color were more likely to be struggling to make payments.

Chart showing unequal financial impacts of the pandemic on ability to keep up with rent or mortgage payments based on income levels
Chart courtesy of the Harvard Joint Center for Housing Studies, copyright 2020

“While 15% of white renters at that income level are behind, 25% of Black and Hispanic renters are behind,” said Chris Herbert, the center’s managing director. “This reflects the fact that Black and Hispanic workers are more likely to be the sectors of the economy that have had shutdowns from the pandemic and so have lost wages.”

Meanwhile two policies that have helped renters stay in their homes — a national moratorium on evictions from the Centers for Disease Control and Prevention and extended unemployment benefits — are set to expire next month.

Chart showing unequal financial impacts of the pandemic created by loss of employment income based on household income levels
Chart courtesy of the Harvard Joint Center for Housing Studies, copyright 2020

“January could be a very difficult month for millions of renters,” Herbert said.

Even with a federal moratorium, evictions haven’t stopped during the pandemic, said Carol Ott, tenant advocacy director with the Fair Housing Action Center of Maryland. Judges may interpret the rules differently, she said.

“We are seeing people being evicted through the courts,” Ott said. “We’re also seeing illegal evictions where the landlord will go and change the locks on the tenant and not follow the proper procedure.”

While evictions can be devastating for individual families, a wave of filings could also increase costs for homeless shelters, emergency rooms and child welfare services, said Dan Threet, a research analyst with the National Low Income Housing Coalition.

In a new report with the University of Arizona’s Innovation for Justice program, the coalition estimates the public costs to health and social service systems could range from $62 billion to $129 billion.

“Importantly, that doesn’t encompass all of the downstream costs that we are likely to face, if there is a wave of evictions,” Threet said, including lost rental revenue for landlords and damage to the broader economy.

The solution, he said, is direct payments to help both tenants and landlords. The Federal Reserve Bank of Philadelphia has estimated Americans will owe roughly $7.2 billion in unpaid rent by December.

COVID-19 Economy FAQs

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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