Number of U.S. renters who fell behind on payments doubled during pandemic
FORT WORTH, Texas — Twanesha Harrison, 33, was barely making ends meet this year when a historic winter storm hit Texas in February and sent her over the edge.
Harrison had been living paycheck to paycheck since she lost her second job last summer, after the pandemic forced her family-run insurance company to shut down. So when record low temperatures sent her electricity bill soaring, Harrison's budget fell into the red. She has not been able to catch back up.
“I've picked up extra shifts and asked family and friends for help,” she said in a recent interview. “But ultimately I had to make a decision of paying my rent or the electricity.”
Harrison was short on rent for the second month in a row at the end of June. She applied for the federal Emergency Rental Assistance Program in May with the help of the staff at her apartment complex, but as of July 1, she had not been approved.
“I pray that we'll be OK,” said Harrison, who's raising her 11-yearold daughter on her own. “I'm not sure who would take us both in if we have to leave our home.”
There are more than 43,000 households that owe some $146 million in rent in Tarrant County, Texas, where Harrison lives, according to the National Equity Atlas, a data and policy tool maintained by the University of Southern California Equity Research Institute and the research firm PolicyLink.
According to PolicyLink estimates, the nationwide total rent debt is upward of $20 billion, with more than 5.8 million renters, or 14%, in arrears.
That's twice as many as in 2017, according to the most recent prepandemic estimate from the U.S. Census Bureau's American Housing Survey.
In recent months, the nation's share of renters with debt has trended downward as the economy has recovered, but in some states the share of renters in debt has increased. As of June 7, 13% of Texas tenants owed back rent, down from 21% on May 24.
But in 22 states, the share of renters in debt increased during the same period, according to the latest census data analyzed by PolicyLink.
In Alabama, Arkansas and Georgia, at least 1 in 4 tenants was behind on rent as of June 7.
Sara Treuhaft, vice president of research at PolicyLink, said the increase is entirely a consequence of the pandemic's economic fallout. Nearly 7 in 10 of those who are behind on rent lost employment income at some point during the pandemic, she said. The majority were low-wage workers and disproportionately people of color, according to Treuhaft. In Texas, people of color made up 80% of those behind on rent compared with 66% nationally.
“This year we had a reckoning around structural racism in this country and now we see that Black and Latinx renters were most impacted by the pandemic,” Treuhaft said. “We must clear these debts if we are to have an equitable recovery and prosperous country.”
Wiping out those debts could take years because the state and local agencies tasked with distributing the tens of billions of dollars allocated by Congress were not prepared for the demand.
Housing experts don't know how long it will take for renter debt to return to pre-pandemic levels, but many worry tenants will be paying the consequences for years.
Michael Carroll, director of the Economics Research Group at the University of North Texas, said communities with a large share of renter debt could see lower consumer spending, a decrease in property values and a rise in rental costs.
“The question is, are these renters going to be able to afford to live anywhere if they have this huge backlog of debt and a history of being evicted,” Carroll said in an interview. “Will future landlords actually take them in and if they do, will it be at a higher price, and will that push rent up for everybody?”
Dozens of state and national consumer rights organizations are urging the U.S. Consumer Financial Protection Bureau to protect the credit records of tenants facing economic hardship because of the pandemic.
Rental debt and eviction records often are the basis for landlords to automatically reject applicants, and negative entries can remain on a credit report for seven years.
“We can't think about the COVID-19 period as something that is indicative of someone's ability to be a good tenant,” said Ariel Nelson, a staff attorney at the National Consumer Law Center, one of the signatories of the letter.
“People lost their jobs and it wasn't their fault, and because of the snowballing effect of that, they have rental debt, or they have an eviction record.”
States that allowed eviction moratoriums to expire had more COVID19 infections and deaths than those with standing eviction pauses, according to a pre-print study in the Social Science Research Network.
To curb the coronavirus spread, the federal Centers for Disease Control and Prevention issued a national eviction hold in September. It has been extended four times since, and now is scheduled to end July 31.