As the clock ticks closer to the end of the national eviction moratorium, which bars landlords from evicting residents through December 31, 1.3 million renter households will owe $7.2 billion in unpaid rent by December, translating to about $5,400 each, according to a new 28-page report from the Federal Reserve Bank of Philadelphia that quantifies the immense financial strain that American renters who have lost their jobs due to the pandemic are under.
The staggering rent debt is in spite of government initiatives to supplement lost income for unemployed Americans–including the supplementary $600 per week benefit provided by the CARES Act from April through July 31, and the $1,200 stimulus checks sent to households in April–all of which the study finds were “very effective,” except that even many people who needed the relief weren’t eligible for it or couldn’t access it, the Fed notes.
The findings also show how disproportionately affected communities of color have been by the pandemic: Although households of color make up less than half of all renter households, they account for 58% of households projected to have rent debt by the end of December and 59% of all rental debt accrued by that time, the study says.
The study concludes that many renter households likely will need additional support in order to avoid eviction once the national moratorium expires.
The study also found high variation in the number of impacted American renters state by state, concluding that factors such as housing costs drove up rental debt in hardest-hit states like Florida and California, where 5.6% and 5.4% of renters, respectively, are estimated to be in debt come December.
“Like the patchwork of state and local moratoriums preceding it, the temporary [national eviction moratorium] has protected many renters from the threat of losing their homes in the middle of a pandemic. However, our analysis suggests that this stopgap measure has left millions of additional households, many owing thousands of dollars of back rent, at risk when the moratorium expires,” the Fed report concludes. “These households are primarily those with workers who lost jobs yet did not receive state or federal UI (and other associated CARES Act provisions).”
As many as 20 million households and 24 million individuals were forced into unemployment between March and August as the pandemic shuttered businesses and ravaged industries. To help curb the spread of Covid-19, the Centers for Disease Control and Prevention issued an unprecedented notice on September 4 effectively halting residential evictions through December 31. Though that’s kept financially burdened families from getting evicted, rental debt accrued during the moratorium will still be due when evictions can resume–a massive burden that broad policy initiatives have yet to address, as rent cancellation proposals, for example, have failed to gain nationwide traction, and negotiations over another stimulus bill have stalled in Washington.
7,509,255. That’s the number of American renter households–roughly 23% of the 32 million total–that experienced unemployment between March and August, the Fed’s Friday report says.
Another 787,000 people filed new unemployment claims last week, according to data released by the Labor Department on Thursday. That’s fewer than economists were expecting, and the lowest level since March, but it’s still incredibly high by historical standards.
Source: Forbes – Money