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 80% of their income to less than half, a new
Zillow® analysis shows. While the extra assistance helps on a
monthly basis, millions behind on their rent still face an
incredible challenge in catching up on payments that have piled up
before temporary eviction moratoriums expire.
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 81.2% of
that income on rent. The additional $300 a week from the current stimulus package
will bring the typical rent burden down to
43%ii.
That is a huge improvement, but still well above the 30%
threshold at which a household is officially "rent burdened."
Previous research from Zillow and collaborators at the
University of Pennsylvania and
Boston University found that
homelessness rates in a community rise sharply once typical rent
burdens climb above 30%. The additional $600 a week in unemployment insurance payments
from the CARES Act passed in late March brought the rent burden
down to 29.5% for unemployed renters paying the typical rent.
"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."
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 $6,000 in back rent and utilities by this month.
While unemployed renters remain significantly rent burdened, the
additional $300 payments may help
reduce the debt they will eventually owe when eviction moratoriums
expire.
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
29.6% of their income on rent, a small improvement from 29.8% in
Marchiii. Rent growth has shown the first signs of
a bounceback, potentially reversing the small gains employed
renters made in 2021 and making it more difficult for the millions
who have fallen behind on payments.
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 53.1% of their income on rent in
2019iv, and Zillow research from before the pandemic and
resulting recession showed that only 51% of renters said they could
afford an unexpected $1,000
expensev.
Another potential cliff looms on March
14 when the current $300
weekly supplement expires.
Metropolitan
Area*
|
Typical Rent
(November
2020)
|
Rent Burden -
Unemployed
Renters w/o $300
Weekly Boost
|
Rent Burden -
Unemployed
Renters w/ $300
Weekly Boost
|
Rent Burden -
Unemployed Renters
w/ $600 Weekly
Boost (April 2020)
|
United
States
|
$1,734
|
81.2%
|
43.3%
|
29.4%
|
New York,
NY
|
$2,528
|
92.9%
|
53.9%
|
38.1%
|
Los Angeles-Long
Beach-Anaheim, CA
|
$2,579
|
110.5%
|
62.4%
|
43.2%
|
Chicago,
IL
|
$1,661
|
83.0%
|
45.0%
|
30.8%
|
Dallas-Fort Worth,
TX
|
$1,570
|
82.2%
|
45.1%
|
30.7%
|
Philadelphia,
PA
|
$1,610
|
79.5%
|
43.0%
|
29.3%
|
Houston,
TX
|
$1,492
|
74.1%
|
41.4%
|
28.6%
|
Washington,
DC
|
$2,039
|
115.7%
|
64.6%
|
44.8%
|
Miami-Fort
Lauderdale, FL
|
$1,935
|
138.3%
|
65.5%
|
42.5%
|
Atlanta,
GA
|
$1,607
|
83.5%
|
45.5%
|
30.7%
|
Boston, MA
|
$2,270
|
102.4%
|
58.3%
|
41.2%
|
San Francisco,
CA
|
$2,985
|
125.0%
|
74.9%
|
53.6%
|
Detroit,
MI
|
$1,322
|
64.3%
|
34.8%
|
23.5%
|
Riverside,
CA
|
$2,206
|
96.5%
|
52.8%
|
35.7%
|
Phoenix,
AZ
|
$1,558
|
124.8%
|
54.7%
|
34.4%
|
Seattle,
WA
|
$1,891
|
97.5%
|
58.3%
|
41.2%
|
Minneapolis-St Paul,
MN
|
$1,546
|
84.6%
|
45.4%
|
30.9%
|
San Diego,
CA
|
$2,355
|
129.2%
|
69.4%
|
46.9%
|
St. Louis,
MO
|
$1,154
|
67.4%
|
34.0%
|
22.4%
|
Tampa, FL
|
$1,581
|
108.3%
|
51.2%
|
33.0%
|
Baltimore,
MD
|
$1,663
|
74.8%
|
43.8%
|
30.6%
|
Denver, CO
|
$1,743
|
94.2%
|
55.0%
|
38.4%
|
Pittsburgh,
PA
|
$1,186
|
47.7%
|
28.2%
|
19.9%
|
Portland,
OR
|
$1,665
|
80.5%
|
48.0%
|
33.4%
|
Charlotte,
NC
|
$1,533
|
81.5%
|
42.8%
|
28.6%
|
Sacramento,
CA
|
$1,948
|
91.4%
|
52.0%
|
35.5%
|
San Antonio,
TX
|
$1,336
|
77.0%
|
40.7%
|
27.3%
|
Orlando,
FL
|
$1,595
|
125.0%
|
59.4%
|
38.4%
|
Cincinnati,
OH
|
$1,309
|
47.6%
|
28.6%
|
20.3%
|
Cleveland,
OH
|
$1,140
|
59.1%
|
31.5%
|
21.2%
|
Kansas City,
MO
|
$1,205
|
73.0%
|
37.5%
|
24.8%
|
Las Vegas,
NV
|
$1,483
|
82.9%
|
44.6%
|
30.0%
|
Columbus,
OH
|
$1,333
|
77.4%
|
39.8%
|
26.4%
|
Indianapolis,
IN
|
$1,273
|
69.4%
|
35.8%
|
23.7%
|
San Jose,
CA
|
$2,958
|
142.9%
|
85.8%
|
61.3%
|
Austin, TX
|
$1,539
|
81.8%
|
47.5%
|
33.3%
|
Virginia Beach,
VA
|
$1,397
|
74.3%
|
41.1%
|
28.1%
|
Nashville,
TN
|
$1,597
|
105.4%
|
50.2%
|
32.6%
|
Providence,
RI
|
$1,609
|
71.8%
|
38.0%
|
25.7%
|
Milwaukee,
WI
|
$1,213
|
64.7%
|
34.5%
|
23.4%
|
Jacksonville,
FL
|
$1,400
|
101.5%
|
48.2%
|
31.0%
|
Memphis,
TN
|
$1,320
|
81.7%
|
38.8%
|
25.0%
|
Oklahoma City,
OK
|
$1,103
|
42.1%
|
26.3%
|
18.8%
|
Louisville-Jefferson
County, KY
|
$995
|
59.6%
|
31.2%
|
20.8%
|
Hartford,
CT
|
$1,391
|
67.6%
|
37.7%
|
25.9%
|
Richmond,
VA
|
$1,330
|
74.2%
|
40.1%
|
27.3%
|
New Orleans,
LA
|
$1,409
|
98.0%
|
44.0%
|
28.2%
|
Buffalo,
NY
|
$1,123
|
60.6%
|
31.8%
|
21.3%
|
Raleigh,
NC
|
$1,526
|
83.4%
|
44.7%
|
30.0%
|
Birmingham,
AL
|
$1,104
|
71.4%
|
34.1%
|
22.0%
|
Salt Lake City,
UT
|
$1,416
|
76.7%
|
43.1%
|
29.5%
|
*Table ordered by
market size
|
About Zillow Group
Zillow Group, Inc.
(NASDAQ: Z and ZG) is reimagining real estate to make it easier to
unlock life's next chapter.
As the most-visited real estate website in the U.S., Zillow® and
its affiliates offer customers an on-demand experience for selling,
buying, renting or financing with transparency and nearly seamless
end-to-end service. Zillow Offers® buys and sells homes directly in
dozens of markets across the country, allowing sellers control over
their timeline. Zillow Home Loans™, our affiliate lender, provides
our customers with an easy option to get pre-approved and secure
financing for their next home purchase. Zillow recently launched
Zillow Homes, Inc., a licensed brokerage entity, to streamline
Zillow Offers transactions.
Zillow Group's affiliates and subsidiaries include Zillow®,
Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow
Closing Services™, Zillow Homes, Inc., Trulia®, Out East®,
StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal
Housing Lender, NMLS #10287
(www.nmlsconsumeraccess.org).
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