Despite New Stimulus, More Than 3 Million Renters Facing COVID-19 Unemployment Bear Extreme Housing Cost Burden
A recent Zillow analysis highlights the financial challenges faced by renters due to the COVID-19 pandemic, revealing that many pay over 80% of their unemployment benefits on rent. The new fiscal stimulus package provides an extra $300 weekly, reducing this burden to approximately 43%. However, despite this relief, millions remain behind on rent, accumulating an average debt of $6,000. The analysis also points out that once rent burdens exceed 30%, homelessness rates increase significantly. Housing vulnerability is likely to be a pressing issue for the incoming administration.
- The $300 weekly stimulus payments significantly reduce rent burdens for unemployed renters, improving their financial situation.
- Zillow's analysis underscores the importance of financial assistance for struggling renters during the pandemic.
- Many renters remain unable to pay their debts, with an estimated average of $6,000 owed in back rent and utilities.
- The financial relief may be temporary, with potential increases in rent growth affecting future affordability.
SEATTLE, Jan. 12, 2021 /PRNewswire/ -- For millions of renters who remain unemployed during the COVID-19 pandemic, the recently finalized fiscal stimulus package is desperately needed relief. The additional payments will bring their typical rent burdens from more than
Renters have carried much of the financial burden throughout the COVID-19 pandemic, in large part because of dramatic job losses in high-contact industries that are often staffed by renters. Zillow estimates at least 3 million renters who were employed last March had lost their jobs and were still out of work in November, including more than a million in the accommodation and food services industries that have been devastated by restrictions aimed at limiting the spread of COVID-19i.
Federal and state unemployment insurance is now the primary source of income for these renters who have lost their jobs. In November, a typical unemployed renter living alone spent
That is a huge improvement, but still well above the
"This analysis shows how much even relatively modest amounts of financial assistance can mean to struggling renters," said Chris Glynn, senior economist at Zillow. "Even though supplemental assistance has resumed, there are financial wounds to heal from the three-month period when some renters were sending more than
A federal eviction moratorium remains in place to keep those unable to pay in their homes, though industry estimates show only small drops in the share of renters making payments in full compared to a year earlier. But the rent owed continues to accrue even without the looming threat of an eviction. A study by Moody's Analytics estimated that nearly 12 million renters will owe an average of about
Renters who maintained stable employment in 2020, however, saw their rent burdens stabilize during the pandemic due to slowing rent growth for much of the year. In November, the typical U.S. renter who did not receive unemployment benefits paid an estimated
Catching up any debts accrued will likely prove difficult for many who did not have much financial breathing room to begin with. Low-income renters typically spent
Another potential cliff looms on March 14 when the current
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About Zillow Group
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i Unemployment estimates are based on an analysis of the Current Employment Statistics data from the U.S. Bureau of Labor Statistics, with estimates constructed from industry-level data and the share of workers in each industry classified as a renter from the American Community Survey.
ii Calculations assume that household income is the maximum possible amount of federal and state unemployment insurance payments for one person, and the household pays the typical rent in a given area.
iii Calculations assume that household income is the median U.S. renter household income, no unemployment insurance payments were received, and the household pays the typical U.S. rent.
iv U.S. Census Bureau, 2019 American Community Survey: https://www.census.gov/programs-surveys/acs/news/data-releases.html
v Zillow Research, Sacrifices People Make to Afford the Rent: https://www.zillow.com/research/sacrifices-to-afford-the-rent-25956/
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SOURCE Zillow
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