SEATTLE, March 26, 2020 /PRNewswire/ -- American
renters who work in food and retail industries can find themselves
spending 40% of their annual income on housing costs if they are
unable to work for two months -- up about six percentage points
from their current rent burden.
As local governments limit or close businesses to stop the
spread of the coronavirus, different measures have been proposed to
alleviate the financial hardships facing employees. Zillow analyzed
how a short-term loss of income could affect renters' finances, and
what effect these proposals could have on housing affordability for
workers in some hard-hit industries if they are out of work for two
months.
Single earners working in food or retail could expect to spend a
median of 33.6% of their income on rent. Missing just two weeks'
worth of paychecks would raise that to 35% of their annual income.
And if they are out of work for two months, they could spend 40% of
their income on housing, absent any other source of money.
According to previous Zillow research, only 51% of renters say they
can afford an unexpected $1,000
expense, and most renters (66%) already make at least one sacrifice
to afford their rent1. The first sacrifice
renters make is cutting back on entertainment, followed by picking
up additional work -- which may not be an option right now.
As the economic impact of shutting down or severely limiting the
operations of restaurants, retail shops and other businesses grows,
plans to address the gap in income have been proposed, including a
one-time payment of $1,200 per single
adult and $500 per qualified child. A
one-time payment similar to this legislation would ease some of the
financial strain on renters who are out of work for two months,
lowering the share of annual income needed to cover the year's rent
from 40% to 35.8%.
Two months with no income would push food and retail workers to
spend more than half of their annual income on rent in San Diego, San Jose,
Calif., Denver,
Miami, Los Angeles, Riverside, Calif. and Sacramento. A one-time payment would keep
their rent burden under 50% in each of these markets except
San Jose.
In Las Vegas, 37% of the local
employee base works in food or retail, the highest share of any
market in this analysis. Rent typically takes up 34.2% of their
annual household income -- if they missed two months of work, that
would jump to 40.7% absent any other money. A one-time payment of
$1,200 for each adult and
$500 for each child would put their
median rent burden at 35.7% of their annual income.
"We're still in the early stages of understanding exactly what
effects the coronavirus will have on the housing market in the long
term, but many workers and families are living through an immediate
strain as their jobs are cut back and paychecks dry up," said
Zillow Senior Policy Advisor Alexander
Casey. "Renters across the country, and in the service
industries especially, are already often stretching their budgets.
They are likely to see their rent burden increase if paychecks
disappear, which also means they'll have less funds left after
paying housing costs for other essentials, which can quickly become
devastating. But without drastic measures now to slow the spread of
this disease, we risk it worsening, further delaying the economy's
return to business as usual and resuming the livelihoods for these
workers."
Metro
|
Annual
Income
Spent on
Rent
|
Annual
Income
Spent on
Rent - Two
Months with
No Pay
|
Annual Income
Spent on Rent -
Two Months with
No Pay + One-Time
Payment of $1,200
per Adult and $500
per Child
|
Share of
Workers
in Food/Retail
|
United
States
|
33.6%
|
40.0%
|
35.8%
|
20.1%
|
New York,
NY
|
40.0%
|
47.6%
|
41.0%
|
18.0%
|
Los Angeles,
CA
|
44.8%
|
53.3%
|
45.5%
|
21.0%
|
Chicago,
IL
|
33.5%
|
39.9%
|
34.4%
|
18.7%
|
Dallas, TX
|
34.3%
|
40.8%
|
35.1%
|
20.2%
|
Philadelphia,
PA
|
38.9%
|
46.3%
|
38.5%
|
18.2%
|
Houston,
TX
|
38.9%
|
46.3%
|
39.1%
|
19.3%
|
Washington,
DC
|
41.3%
|
49.1%
|
42.6%
|
16.1%
|
Miami, FL
|
44.8%
|
53.5%
|
46.1%
|
22.8%
|
Atlanta,
GA
|
34.9%
|
41.6%
|
35.8%
|
19.7%
|
Boston, MA
|
35.8%
|
42.6%
|
38.4%
|
17.9%
|
San Francisco,
CA
|
41.5%
|
49.4%
|
43.7%
|
17.5%
|
Detroit,
MI
|
32.6%
|
38.9%
|
32.1%
|
19.4%
|
Riverside,
CA
|
44.1%
|
52.7%
|
43.5%
|
22.4%
|
Phoenix,
AZ
|
31.6%
|
37.5%
|
31.6%
|
21.2%
|
Seattle,
WA
|
36.1%
|
43.0%
|
39.4%
|
19.0%
|
Minneapolis,
MN
|
35.8%
|
42.6%
|
36.2%
|
19.0%
|
San Diego,
CA
|
46.6%
|
55.4%
|
48.6%
|
21.5%
|
Saint Louis,
MO
|
30.8%
|
36.7%
|
31.9%
|
19.9%
|
Tampa, FL
|
36.5%
|
43.5%
|
37.2%
|
22.0%
|
Baltimore,
MD
|
36.4%
|
43.3%
|
37.4%
|
17.2%
|
Denver, CO
|
45.8%
|
54.5%
|
46.9%
|
19.5%
|
Pittsburgh,
PA
|
24.7%
|
29.4%
|
25.6%
|
19.8%
|
Portland,
OR
|
38.8%
|
46.2%
|
39.0%
|
18.9%
|
Charlotte,
NC
|
30.5%
|
36.2%
|
32.4%
|
20.4%
|
Sacramento,
CA
|
43.3%
|
51.6%
|
42.8%
|
20.7%
|
San Antonio,
TX
|
33.6%
|
40.0%
|
34.0%
|
22.8%
|
Orlando,
FL
|
39.6%
|
47.1%
|
41.3%
|
27.3%
|
Cincinnati,
OH
|
32.0%
|
38.1%
|
32.1%
|
19.4%
|
Cleveland,
OH
|
27.0%
|
32.1%
|
28.8%
|
19.7%
|
Kansas City,
MO
|
28.6%
|
34.0%
|
30.3%
|
18.7%
|
Las Vegas,
NV
|
34.2%
|
40.7%
|
35.7%
|
37.0%
|
Columbus,
OH
|
29.5%
|
35.2%
|
30.8%
|
20.3%
|
Indianapolis,
IN
|
36.0%
|
42.9%
|
35.0%
|
19.9%
|
San Jose,
CA
|
46.4%
|
55.3%
|
52.0%
|
14.6%
|
Austin, TX
|
35.6%
|
42.4%
|
36.7%
|
19.1%
|
Zillow Research
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1 https://www.zillow.com/research/sacrifices-to-afford-the-rent-25956/
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