As Unemployment Numbers Rise, Renters Are Particularly Vulnerable

Supermajority Education Fund

April 3, 2020

With unemployment on the rise as cities and towns across the United States virtually shut down due to the coronavirus health crisis, tenants’ rights advocates say more needs to be done to assist Americans struggling to pay their monthly rent due to sudden job loss. A March 25 analysis by the Urban Institute detailed the how renters — a group that includes 44 million Americans — are particularly vulnerable during economic downturns. 

“We find that renters have both a higher unemployment rate and that their income fluctuates from month to month,” Jung Hyun Choi, a research associate with the Housing Finance Policy Center at the Urban Institute, told Supermajority News. Renters are more likely to be hourly workersThe 2018 American Community Survey by the Census Bureau found 23 percent of renters worked in industries like retail, hospitality, and restaurants. As Choi noted, “those kinds of jobs are more susceptible to unemployment.”

Renters also tend to have limited access to credit and are more likely to struggle to pay their housing expenses immediately after a layoff or furlough. 

But while renters are more likely to have lost their jobs in recent weeks, “there are limited programs available right now for the renters,” Choi said. Landlords of multifamily buildings with government-sponsored enterprise mortgages with demonstrated hardship will also be provided with up to three months of mortgage relief if they guarantee they would not evict tenants for not paying rent. This is a sharp contrast to the relief provided to homeowners with mortgages, with Fannie Mae, Freddie Mac, and the Federal Housing Administration all announcing that evictions and foreclosures would be suspended for 60 days. 

The experts at the Urban Institute say promising not to evict tenants is not enough if renters are still responsible for eventually paying off their balances. The Institute’s analysis calls on the government to provide short term rent relief for renters as the economic crisis continues. Choi notes that without rent relief, the financial burden of the rent crisis will be passed on to the landlords, who may then be unable to make their mortgage payments.

But Choi says she is encouraged that more policymakers and elected officials are focusing on the vulnerability of renters and the need to provide assistance. “We have experience following the great recession of helping out the homeowners,” she said. “But renters are getting more attention day by day.”