Renters Struggle as Income Stagnates, Unemployment Remains High
Renters’ median income growth stopped last year, and more than three million renters who face COVID-19 unemployment carry extreme housing cost burdens, analysts said.
Following a two-year upward trend, renters’ median incomes stopped growing in 2020, reported Rent Café, Santa Barbara, Calif. Median renter income increased 1.5 percent in 2018 to $36,552 and 5.1 percent in 2019 to $38,400. But renters’ salaries stagnated last year.
For millions of renters who remain unemployed during the COVID-19 pandemic, the recently finalized fiscal stimulus package is “desperately needed relief,” said Zillow, Seattle. The additional funds should bring their typical rent burdens from more than 80 percent of their income to less than half, a Zillow analysis found.
“This analysis shows how much even relatively modest amounts of financial assistance can mean to struggling renters,” said Zillow Senior Economist Chris Glynn. “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 percent of their unemployment benefits out the door on the first of the month.”
Glynn noted 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,” he said.
Renters have incurred significant financial burdens throughout the pandemic in part because of dramatic job losses in high-contact industries that are often staffed by renters. Zillow estimated at least three 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-19.
Federal and state unemployment insurance now provides the primary income for these renters who have lost their jobs. Zillow said a typical unemployed renter living alone spent 81.2 percent of that income on rent in November. The additional $300 a week from the current stimulus package will bring the typical rent burden down to 43 percent.
Zillow noted another potential cliff looms on March 14 when the current $300 weekly supplement expires.