While the stimulus package approved by Congress at the end of last year will aid millions of renters who remain unemployed due to the COVID-19 pandemic, extreme housing cost burdens still remain. According to a new Zillow analysis, the additional payments will bring typical rent burdens from more than 80% of renters’ income to less than half. While the extra assistance helps on a monthly basis, millions of renters who are behind on their housing payments face the challenge of catching up on rent that has piled up before temporary eviction moratoriums expire.
Zillow estimates at least 3 million renters who were employed in March 2020 had lost their jobs and were still unemployed as of November, including more than a million in the accommodation and food services industries.
Federal and state unemployment insurance is the primary source of income for these unemployed renters. According to the analysis, a typical unemployed renter living alone in November spent 81.2% of that income on rent. The additional $300 a week from the stimulus package will bring the typical rent burden down to 43%. However, a household that pays more than 30% of their income on housing costs is considered cost burdened.
“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 80% of their unemployment benefits out the door on the first of the month. Temporary eviction moratoriums and unemployment insurance alone may not be enough to keep some renters who have steadily accumulated debts in their homes long term. Housing vulnerability for renters will be a top issue for the incoming administration.”
Although 93.8% of renter households in almost 11.3 million professionally managed multifamily units had made a full or partial rent payment by the end of December, according to the National Multifamily Housing Council’s Rent Payment Tracker, a study by Moody’s Analytics had estimated that nearly 12 million renters would owe an average of about $6,000 in back rent and utilities by this month; however, the evictions moratorium was extended through the end of the month in the stimulus package.
According to Zillow, the next potential cliff for unemployed renters will be March 14, when the $300 weekly supplement expires.
