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CoronavirusReal Estate

Government resources are leaving renters behind

61% of households won't receive assistance beyond unemployment

Despite stimulus checks, the paycheck protection program and other government resources, nearly 61% of households in the U.S. remain vulnerable, according to housing market research from Amherst.

Although middle- and low-income renters are among those most affected by the pandemic, government assistance has mostly been geared toward homeowners.

As the report noted: “While current government assistance is currently somewhat helpful for low and middle income households facing acute levels of unemployment, current stimulus measures are temporary and many provisions are ending as soon as July.

“In light of the impact of COVID-19 and absent additional intervention, our analysis indicates there is a risk of a number of evictions and foreclosures in excess of the levels we saw in the wake of the Great Recession.”

Between 20% and 25% of workers with a pre-COVID-19 income of $30,000-$75,000 – and 25% of workers with incomes below $30,000 – had lost their jobs by early April, according to the report.

If current economic conditions were to persist, up to 28 million renters, or 22.5% of all U.S. households, are at risk of eviction or foreclosure.

Many metros have enforced an eviction moratorium, but what about after that’s lifted?

The data shows that there are nearly 44 million renters in the U.S., or 35% of America’s population, which is an increase of more than 4 million people since the 2008 financial crisis.

Meanwhile, 40% own their home with a mortgage or loan, 23% own free and clear and 2% occupy without payment of rent.

It’s the renter population that’s particularly vulnerable in an economic downturn. In fact, 60% of renters have incomes that are less than 80% of the area median income, while only 44% of owners without a mortgage and 21% of owners with a mortgage fell below this threshold.

About a quarter of all renters said they spent more than 50% of their incomes on housing, while only 11% of owners with a mortgage said that.

According to the data, some states do not cover workers with hours reduced by less than 20%. According to the real-time labor market survey, about 12% of Americans reported a loss in income around 20% in April 2020 compared to March 2020.

To conduct their analysis, Amherst said they leveraged data from CPS/HVS (Housing Vacancies and Homeownership), 2018 ACS/PUMS (2018 American Community Survey), NHMC (National Multi Housing Council), CBPP (Center for Budget and Policy Priorities) and the Urban Institute, applying Amherst derived estimates.

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