Rent debt will be a persistent threat to the housing security of millions of renters, along with eviction, as 28 percent of renters are starting the year with unpaid rent bills from previous months, amassed while the economy buckled under the coronavirus pandemic, according to the latest Apartment List survey.
For minority renters, the missed-payment crisis has been even more damaging. In the fall of 2020, the missed-payment rate for non-white renters was nearly 50 percent higher than that of white renters. This is just one of many ways that minority groups are burdened with an outsize share of the pandemic’s economic fallout; beyond housing, people of color have disproportionately experienced loss of employment, loss of health insurance, loss of food security, and more severe health impacts.
“As we did throughout much of 2020, our team collected data on housing, race, and financial outcomes using a nationally-representative survey of over 4,000 respondents taken during the first week of January 2021. The findings highlight how the persistent and unequal effects of 2020’s housing crisis are spilling over into the new year,” Apartment List said in the survey.
Rent Debt Is Driving Concerns About Eviction
There has been some rent debt improvements but those have been concentrated among just the wealthiest set of renters. Since October, the rate of rent debt has nearly halved for households making over $100,000, but fallen just a few percentage points for those earning less than $50,000.
This slight decline in rent debt, coupled with federal and local eviction moratoriums, have allayed some broad concerns about renters being evicted from their homes.
As of January, 51 percent of renters say they are “not at all concerned” about an eviction, up from 39 percent six months ago. But eviction protection does not equal rent forgiveness, and unpaid debts will become due when the federal moratorium expires. This will expose the millions of renters with unpaid bills who aren’t protected by additional state or local laws.
“With that in mind, and considering what we now know about where rent debt is concentrated in America, it comes as little surprise that evictions pose a much greater threat to minority renters,” Apartment List said in the report, as 31 percent of Black renters are “very” or “extremely concerned” about losing their homes, more than any other group and at more than twice the rate of white renters.
Rent debt and eviction concerns are highly correlated
More than 80 percent of renters who are extremely concerned about an eviction owe their landlords money, and on average, they owe much more than less-concerned groups; 45 percent owe more than $1,000, compared to just three percent of those who are not worried about losing housing. This highlights how eviction moratoriums may be short-term safety nets, but not sufficient solutions to deep inequalities. For renters coming into the new year with steep debts, these moratoriums may only be delaying the inevitable: a surge of evictions that will disproportionately displace already-vulnerable groups.
Unpaid Rent Causes Additional Downstream Financial Sacrifices
Rent debt – and the looming threat of eviction – are forcing many renters to change the way they spend and save their money, often exacerbating their financial troubles.
“Our survey asks renters what financial sacrifices they have made in response to the pandemic, and in the chart we split the results by whether or not they have accumulated rent debt going into the new year.
“The discrepancies show that for debt-burdened renters, the financial hole can be much greater than just unpaid-rent bills. By creating an immediate need for cash, rent debt leads to new forms of debt and limits short- and long-term savings,” Apartment List says in the report.
This year the pandemic will remain a persistent threat to the health, finances, and housing security of our nation’s renters.
“And pre-existing economic inequality is compounding the problem for minority renters. People of color, who tend to work in occupations that are more prone to disease exposure and more susceptible to pandemic-related layoffs, are coming into 2021 with greater rent debt and more salient concerns about losing their housing once eviction protections expire,” Apartment List says.
The Looming Debt Trap Facing Renters