September 15, 2020
Deep Financial Woes Portend Rent Crisis
The economy shows some signs of improving. More than 1 million people went back to work last month, pushing the unemployment rate down to 8.4 percent.
But housing experts say a sure sign of trouble ahead is the crisis unfolding among the third of U.S. households who are renters. Things can only get worse for them, because so many were already vulnerable prior to the pandemic after many consecutive years of rising rents that strained their budgets.
Prior to the pandemic, Harvard’s Joint Center for Housing Studies estimates that more than 40 percent of U.S. renters paid more than 50 percent of their incomes for rent – far more than is affordable for most workers. And these rent-burdened households aren’t confined to the lower-income brackets; they extend into the middle class.
The end of the federal government’s $600 weekly supplement to unemployment benefits in July will increasingly strain renters too, said Whitney Airgood-Obrycki, a researcher at the center.
COVID-19 and the resulting recession “is piling on top of an existing affordability crisis,” she said.
This gloomy assessment is backed by other evidence that residents of the four largest metropolitan areas – New York, Los Angeles, Chicago, and Houston – are running out of resources and face “serious financial problems,” warns a report by NPR and Harvard’s T.H. Chan School of Public Health.
Over a third of the households in these four cities have already plowed through most or all of their savings to cover rent, mortgages, credit card bills and necessities, raising concerns they will not be able to “weather long-term financial and health effects of the coronavirus outbreak.” The situation is particularly bad for low-income families. …Learn More