Unemployed renters stand to lose the weekly federal $600 payments which, along with eviction moratoriums, have been a lifeline for many renters out of work, a Zillow analysis shows. Expiration dates loom for both measures.
More than 32 million people collected an extra $600 a week in unemployment benefits at the end of June as part of the Federal Pandemic Unemployment Compensation (FPUC) program, helping to keep missed rent payments only slightly higher than last year, according to a Zillow analysis.
Unemployed renters suffer financially
Expanded unemployment benefits have had an incredible impact on unemployed renters households suffering financially from the coronavirus pandemic. However, missed rent payments have grown — 12.4 percent of renter households paid no rent during the first two weeks of July, up from 9.9 percent the previous year — but by much less than might be expected given record levels of unemployment.
“The boost to unemployment benefits from the federal government has played a crucial role in keeping renters afloat, and has helped insulate the rental market as a whole,” said Zillow economist Jeff Tucker in a release.
“The rate of missed rental payments hasn’t risen nearly as much as expected, and eviction moratoriums are keeping many of those unable to make payments in their homes. But those temporary measures are mostly expiring soon, so without some form of extension to the unemployment benefits boost or eviction moratoriums, we could see a widespread eviction crisis as summer turns to fall,” he said.
Evictions in Milwaukee up 17 percent
The additional federal benefits are set to expire around the same time that many eviction moratoriums will end, potentially causing a wave of double problems.
Early signs of this wave have been seen in areas where evictions have resumed — evictions in Milwaukee in June were 17 percent higher than average, though some of that could be attributed to a backlog built while they were largely halted in April and May with a moratorium.
Contact-intensive workers are 28 percent of renters
Zillow’s analysis illustrates the potential difficulties unemployed renters might face. Contact-intensive workers — those in jobs that require a high degree of face-to-face and close physical interaction, such as healthcare professionals and front-line service workers — are present in about 28 percent of renter households, and have been vulnerable to both job loss and a risk of illness during the pandemic.
With the assistance currently provided, an estimated three percent of renter households with at least one earner in a contact-intensive occupation who is receiving all available benefits would spend more than half of their income on rent. If benefits from the FPUC program were to cease altogether, 41 percent would face this severe housing cost burden. Even if FPUC benefits were extended at half their current scale — $300 per week — just 14 percent would.
Renters with contact-intensive jobs who rent their homes typically have lower incomes than their homeowner counterparts — $32,000 is the median income for renters in these jobs, compared to $49,800 for homeowners.
These renters are also more likely to be the primary earners, so income shocks usually have a greater effect on overall household income.
Contact-intensive workers contribute 72 percent of household income in African-American households, compared to 53 percent in white households, even though the median household income of African-American households with a contact-intensive worker is 15 percent lower than that of similar white households. This means African-American renters are more vulnerable to the widespread income loss prevalent in these industries.