Reed, Divringi, Household Rental Debt During COVID-19 (Philadelphia Fed Community Development report, 2020-10)
Summary
A Federal Reserve Bank of Philadelphia report, Household Rental Debt During COVID-19, by Davin Reed and Eileen Divringi, dated October 2020. It estimates the number of households with rental debt, and the amount owed, resulting from employment losses attributed to COVID-19, with estimates from March 2020 through March 2021. The authors state that by December 2020, 1.34 million renter households will owe $7.2 billion in rent, around $5,400 each. They also state that if every unemployed worker received UI with the CARES supplement and stimulus payments, only 125,000 households would have any rental debt by December 2020. The report is organized into sections on data and methods, national results, results by race/ethnicity and household type, and state-level results.
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“Reed, Divringi, Household Rental Debt During COVID-19 (Philadelphia Fed Community Development report, 2020-10).”
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Federal Reserve Bank of Philadelphia
HOUSEHOLD RENTAL DEBT
DURING COVID-19 DAVIN REED AND EILEEN DIVRINGI
OCTOBER 2020
The views expressed in these papers are solely those of the authors and do not necessarily
reflect the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
2 HOUSEHOLD RENTAL DEBT DURING COVID-19
1. Introduction eligible for April stimulus payments or UI, and many
who are eligible may still not receive them. Second,
COVID-19 and associated economic shutdowns all eviction moratoriums enacted thus far make
have led to unprecedented job losses, with up to clear that any rental debt2 accrued during the
20 million households and 24 million individuals moratorium would still be due when the moratorium
experiencing an unemployment spell between expires. Yet data limitations have made it difficult to
March 2020 and August 2020.1 The scale of form a complete picture of how many households
these losses, their disproportionate impact on might be unable to pay.
lower-income workers, and the uncertain timeline
This report provides new estimates of the number
of economic recovery have raised concerns about
of households with rental debt — and the amount
the ability of households to maintain rent payments
of debt owed — resulting from employment losses
while out of work. Helping households stay in their
attributable to COVID-19. We present these
homes is important for public health reasons and
estimates from March 2020 through March 2021 to
because eviction is associated with many negative
directly inform how many renter households may
outcomes, particularly for disadvantaged
be at risk of eviction because of COVID-19 when
households (Desmond 2012, Desmond and Bell
the national moratorium expires. It also informs
2015, Desmond and Kimbro 2015), and in particular
the amount and forms of additional help that could
causes lost earnings, financial strain, homelessness,
help reduce this risk. We begin with data on the
and health emergencies (Collinson and Reed 2019,
incomes and rents of a nationally representative
Humphries et al. 2019). Beyond the effects on
sample of millions of households working in March
renters, the inability to repay rental debt could
2020. We add in observed monthly changes
create cascading financial challenges for smaller
in employment by industry at the state level,
landlords and significantly disrupt local housing
individual-specific UI income replacement amounts
markets (Choi and Young 2020, Brennan et al. 2020).
from Ganong et al. (2020), and state-specific UI
Many policies have been implemented since March recipiency rates (the share of all unemployed
to protect households from income losses and individuals receiving UI). We then simulate
help them remain in their homes. The Coronavirus individual job losses (and gains) over time and
Aid, Relief, and Economic Security (CARES) Act forecast any resulting shortfalls in households’
expanded eligibility for unemployment insurance ability to pay rent in each month. We consider
(UI), increased the number of weeks UI can be different policy scenarios — such as whether
received, substantially increased the amount of individuals receive standard state UI, CARES UI,
UI benefits received (by an extra $600 from April and Economic Impact Payments — to understand
through the end of July), and made one-time how effective these policies have been and for
payments of up to $1,200 per adult and $500 per which households. We also show results separately
child to eligible households in April. More specific by demographic characteristics such as race/
to housing, state and local governments enacted ethnicity and household type to better understand
a patchwork of eviction moratoriums, and in the distributional effects of COVID-19 on rental
September the Centers for Disease Control and debt. Our scope is national, although we include
Prevention (CDC) ordered a national moratorium results by state to help inform policymaking at
on residential evictions for nonpayment of rent that level.
through the end of December 2020.
We have four main conclusions. First, many renter
However, many households may still remain at households are likely in need of additional support
heightened risk of eventual eviction, for two key beyond what has been made available so far. Of 32
reasons. First, not everyone who lost a job was million renter households with at least one worker
1
Authors’ calculations from Current Population Survey, Current Employment Statistics, and 2
Throughout this report, we use “rental debt” to refer to any form of back rent that may
IPUMS data. Details are provided in the data and methods sections. eventually be owed, regardless of whether it is formal debt.
FEDERAL RESERVE BANK OF PHILADELPHIA 3
in February 2020, 7.5 million (23.5 percent) have some rental debt by December 2020.5 The total
experienced some unemployment between rental debt accrued by that time would be
March 2020 and August 2020. We estimate that by $18 billion.
December 2020, 1.34 million renter households (4.2 Third, in the overall scenarios, greater shares
percent of all renter households and 18 percent of of households of color and female-headed
those experiencing some unemployment) will owe households will experience rental debt by
$7.2 billion in rent, which is around $5,400 each. December 2020. This is consistent with findings
These 1.34 million households contain 3.9 million from previous studies showing that COVID-19
individuals: 2.8 million adults and 1.1 million children. has disproportionately affected these households,
This scenario assumes that 90 percent of all house- which primarily reflects their overrepresentation
holds received Economic Impact Payments and that in jobs lost during the pandemic.6
nationally, 50 percent of workers who have lost a job
Finally, there is substantial variation in rental
since March 2020 received CARES UI (from state or
outcomes by state. This reflects differences in
federal sources), and 50 percent did not receive
employment losses by state, differences in income
any UI.3 These estimates are reasonably robust to
and rents by state, differences in UI recipiency rates
alternative UI recipiency rates.
by state, and differences in UI income replacement
Second, we show that policies designed to replace rates by state. We provide results for all states in
lost income for unemployed workers — such as stan- Section 5.
dard state UI, the supplementary $600 per week
CARES Act UI benefit available from April through Comparison with Previous Studies
the end of July, and the Economic Impact Payments
Many previous studies have estimated the number
(which we will refer to as stimulus) sent to
of households that may need additional housing
households in April — have been very effective at
assistance during COVID-19. Early studies
preventing rental debt for those households that
identified at-risk jobs based on assumptions
receive them. For example, if every unemployed
about which occupations or industries were most
worker received UI with the CARES supplement and
likely to be impacted by efforts to mitigate the
stimulus payments, only 125,000 households (0.4
spread of COVID-19. These early analyses varied
percent of all renter households) would have any
in whether and how they incorporated assumptions
rental debt by December 2020.4 By contrast,
about the offsetting impact of UI and the federal
if no unemployed households received UI or
CARES Act but generally found that such supports
stimulus payments, 3.4 million (10.6 percent of all
would substantially mitigate rent and mortgage
renter households and 45 percent of unemployed
shortfalls.7 Our study differs in that our goal is to
renter households), would have accumulated at least
estimate the actual numbers of households with
rental debt when the national eviction moratorium
expires on December 31, 2020, and to do so with
3
We calculate state-specific UI recipiency rates from the Census Bureau’s Household Pulse realistic inputs for incomes, rents, other costs,
Survey, which yields a national rate of 50 percent. Although this rate suggests a large share savings and UI replacement rates for various
of unemployed workers have not received benefits, it is much higher than state recipiency
rates before COVID-19 and is similar to the levels reached in the first few months of the policy scenarios. We consider a range of rental
Great Recession. An alternative approach calculates UI recipiency rates from continuing UI debt outcomes, such as average debt accumulated
claims data and unemployment estimates, though this approach has its own drawbacks,
such as that the number of claims does not necessarily correspond to the number of unique
individuals actually receiving benefits.
5
These 2.5 million households represent around 7.25 million individuals.
4
The protectiveness of UI with CARES provisions is not surprising given that the extra $600
per week in UI payments through CARES was chosen precisely so that total UI benefits 6
Lower-income, minority, and female workers are more likely to work in jobs requiring close
would replace 100 percent of pre-tax wages for the average worker. It is also consistent physical proximity and in jobs that are not easily done from home, which have been most
with results from the National Multifamily Housing Council’s Rent Tracker showing that rent affected by social distancing requirements (Mongey et al. 2020).
payments have been more stable than employment losses alone would suggest and from
Bhutta et al. (2020) showing in the Survey of Consumer Finances that UI is highly protective 7
For example, see Strochak et al. (2020), “How Much Assistance is Needed to Support
for most households. Renters Through the COVID-19 Crisis?,” which focuses on addressing rent burdens.
4 HOUSEHOLD RENTAL DEBT DURING COVID-19
for those with any debt, to inform efforts to provide level. At the household level, we observe whether
emergency rental assistance. We also emphasize the household rents or owns, the monthly rent or
the monthly dynamics of policies and rental debt mortgage payment, the type of household, and the
outcomes, differences in outcomes by demographic number of adults and children in the household.
characteristics, and forecast all outcomes out to We restrict the sample to individuals who are
March 2021. employed and have positive incomes. The data
Other previous studies rely on survey data on include self-employed workers, freelance workers,
individuals’ confidence that they will be able to pay and anyone else who self-identifies as employed
rent now or in the future. These studies assume when surveyed by the Census Bureau. Thus, we
that low confidence in ability to pay rent is are able to capture a sample of all workers, not
evidence of rental debt and then estimate total just those in payroll employment.
rental debt using summary statistics on rents for The most recent PUMS data available includes
the survey respondents. This approach typically this information for individuals and households
yields much higher estimates of rental debt than surveyed in 2018. We therefore adjust the data
other approaches, for at least two reasons. First, to match the state of the world in February 2020
low confidence in ability to pay rent may not as follows. First, because the survey is nationally
translate one-to-one into actual inability to pay representative, we assume individuals in the data in
rent, even though it may still signal general financial 2018 are similar to individuals living and working in
distress. Second, these studies typically do not February 2020 in terms of their characteristics,
distinguish low confidence in ability to pay incomes, and rents. Second, we adjust the
because of COVID-19 from preexisting low number of working households to match the
confidence. Thus, they may capture preexisting number of working households observed in the
financial distress that, while important, is not the Current Population Survey (CPS) in February 2020.8
specific focus of this report. The final data set provides a snapshot of working
The rest of this report is organized as follows. renter households just before COVID-19 began to
Section 2 describes the data and methods we use affect the economic situation in the United States.
to simulate job losses and forecast rental debt. The second input is monthly changes in payroll
Section 3 describes national results for the different employment from the CES. These capture the effect
policy and overall scenarios, and Section 4 breaks of COVID-19 on our sample of workers from IPUMS.9
out the overall scenarios by race/ethnicity and by Employment data are available by state, industry,
household type. Section 5 describes state-level and month for March 2020 through August 2020.10
results, and Section 6 concludes. We apply percent changes in payroll employment in
each month from the CES to total employment at the
2. Forecasting Rental Debt
a. Data
Our analysis relies on five main data inputs. 8
We do this by inflating the individual and household weights in the PUMS 2018 by the ratio
The first is individual-level survey data for a of employed workers age 16 or older in the CPS in February 2020 to employed workers 16
or older in the PUMS 2018. The ratio is about 158 million to 149 million, or 1.06.
nationally representative sample of millions of
households drawn from the Census Bureau’s 9
We assume that all employment changes beginning in March are because of COVID-19. An
alternative approach would use year-over-year changes in employment (or some other form
American Community Survey Public Use Microdata
of seasonal adjustment) to better isolate employment changes specific to 2020. Given the
Sample (PUMS) accessed via IPUMS. For each scale of job losses in 2020 compared with 2019 and the many other approximations we have
individual in a household, we see employment to make, this adjustment would not affect our main conclusions. CES data are available in a
seasonally adjusted form but have much more suppression at the state by industry by month
status, income, weeks worked, industry, level than the unadjusted data.
occupation, state, and demographic 10
We prefer measuring employment changes with the CES rather than the CPS because it is
characteristics such race/ethnicity and education available at a more disaggregated level (by month, state, and industry).
FEDERAL RESERVE BANK OF PHILADELPHIA 5
beginning of each month from IPUMS to generate The fifth major input is an estimate of essential
total employment losses in each month.11 costs other than housing. Unfortunately, PUMS
The third input is the amount of standard state UI does not include questions about these. We
benefits that each worker in a given state would therefore approximate nonhousing costs by
receive while unemployed. We obtain these assuming that each person in each household
estimates using a program made publicly available requires $8,000 per year in expenses other than
by Ganong et al. (2020). Their program takes as housing. This is about halfway between a
inputs individual incomes and weeks worked and bare-bones budget that includes only food and
returns the amount of income that UI would provide personal necessities (around $4,000 per person
for a worker in a given state based on each state’s per year) and costs that are typical for the average
specific formula for calculating UI benefits. Our household without a job loss and before COVID-19
inputs are the income, weeks worked, and state (around $12,000 per person per year).13 This
of residence of each worker in the IPUMS data. essentially assumes that after a job loss and after
COVID-19, the average unemployed household
The fourth input is an estimate of the share of all can reduce their nonhousing expenses by about
unemployed workers who actually receive UI, 33 percent.
called the recipiency rate. There is little information
about how many unemployed workers have The final input is initial household savings, which
actually received UI benefits since the beginning are also not available in PUMS. We therefore
of the COVID-19 pandemic, particularly broken out assume that households have 5 percent of their
by geography or demographic characteristics.12 initial household income in savings, which we
We therefore estimate state-specific UI calculate using data on median family savings
recipiency rates using data from the Census and median family incomes for renters in the 2019
Bureau’s Household Pulse Survey (Pulse Survey), Survey of Consumer Finances.14 For example, a
pooling responses from June and July. Recipiency household with a pre-COVID-19 income of $50,000
rates are calculated as the share of respondents would have $2,500 in initial savings in accessible
with a COVID-19-related reason for being out accounts such as savings and checking accounts.
of work that reported using UI benefits to meet This is equal to about two months of the median
their spending needs within the last seven days. rent for households in our data.
This yields a national recipiency rate of just over
b. Simulation Methods
50 percent, which is consistent with recent work
examining benefit receipt during the pandemic We use these data inputs to simulate job losses and
(Bitler, Hoynes, Schanzenbach 2020), as well as the forecast resulting rental debt as follows. We begin
authors’ tabulations of the July 2020 supplement with all working individuals (both renters and
to the Survey of Household Economics and owners) in February 2020, which is around 150
Decisionmaking. Mastri et al. (2015) also find using million people. The CES data tell us how many
administrative data that the national recipiency workers lose their jobs in March in each state
rate ranged from 50 to 60 percent in the first few and in each industry. Because we do not know
months of the Great Recession. exactly which individuals lose jobs, we simulate job
losses by assigning a certain share of workers job
losses. For example, if the CES says 10 percent of
workers in an industry and state lose jobs in March,
11
This assumes that percent changes in employment among payroll workers in a month,
state, and industry are the same as the percent changes in employment among
nonpayroll workers. 13
The first estimate is a back-of-the-envelope calculation using information in the MIT Living
Wage Calculator, and the second estimate is a back-of-the-envelope calculation using
12
It is not straightforward to determine using administrative data sets. Efforts to estimate information for the average household from the Consumer Expenditures Survey.
UI receipt based on claims data are likely to significantly overstate the rate of households
receiving assistance, as applications do not necessarily correspond to unique individuals. 14
Available at www.federalreserve.gov/econres/scf/dataviz/scf/chart/.
6 HOUSEHOLD RENTAL DEBT DURING COVID-19
we assign 10 percent of those initially employed described previously for each household in
in that industry and living in that state a job loss April.16 When household income after a job loss
in March. To reflect the economic implications of is less than rent and other costs, households
social distancing requirements, we ensure that the draw down this stock of savings to avoid going
workers who work in close physical proximity to into a rental deficit until the stock is gone. The
others and with low ability to work from home are stimulus payment amount reflects the number of
the first to lose their jobs.15 Mongey et al. (2020) adults and children in the household up to some
show that lower-income households are more income limit, as defined in the CARES Act. The
likely to work in such occupations, and this helps typical household receives $1,200 per adult and
us generate the now well-established pattern that $500 per child.
lower-income households, households of color, and 4. CARES UI (without stimulus): When
female-headed households have been more likely recalculating household income after a job loss,
to lose jobs during the COVID-19 pandemic (Saenz we add back in income replaced by standard
and Sparks 2020; Chetty et al. 2020). state UI plus an additional $600 per week that
For everyone who loses a job in March, we assume is only available from April until the end of July.
their monthly income is one-twelfth of their annual We also add in the $300 per week FEMA UI
earnings, which lets us recalculate their household’s supplement for the month of August for all
new monthly income after their job loss. We can states.17 We also extend the number of weeks
compare this income with their monthly rent individuals can receive UI by 13 weeks.
(from PUMS) and monthly other costs (as described 5. CARES UI and Stimulus: Households receive
previously) to determine whether they would both the Stimulus and CARES UI scenarios.
experience an income deficit in March.
We now have a March income deficit for each of
Policy Scenarios these scenarios. For example, a household might
lose a job and then have an income deficit in the
We then model five different policy scenarios: Nothing scenario. However, they might not have an
1. Nothing: This is the simplest scenario, income deficit in the Standard UI scenario if enough
described in the previous paragraph, without of their lost income is replaced by UI. In each
any source of replacement income for workers scenario, if there is an income deficit then we
who lose jobs. attribute the amount that would have gone to rent as
the rental deficit.18 If a scenario results in a positive
2. Standard UI: When recalculating household
income surplus, the entire surplus goes toward
income after a job loss, we add back in income
paying off any debt accumulated so far and, once
replaced by standard state UI, which we
all debt is gone, into a stock of savings. This is
calculate for each worker in each state as
important because stimulus payments and CARES
described previously. We add this income
UI both resulted in many households having higher
beginning in the first month of job loss (March
incomes after job loss than before, and we want to
in the current example) and extending for the
reflect this.
number of weeks UI is available in that state
(26 weeks for most states).
3. Stimulus (without any UI): We add Economic 16
We do this for all households in April regardless of whether they are currently unemployed,
as these payments were not conditional on unemployment.
Impact Payments to the initial stock of savings
17
While timing of actual adoption of these extra benefits differed by state, we assign all of
this extra benefit to August for simplicity.
15
We do this using occupation-level data on physical proximity and ability to work from home
from Mongey et al. (2020). Specifically, when assigning a certain number of job losses 18
For example, if a household has a monthly rent of $1,000 and an income deficit of $300, we
within a month, state, and industry, we first rank jobs by their combined risk (from close attribute all $300 to the rental deficit. If they have an income deficit of $1,500, we attribute
physical proximity and inability to work from home) and start assigning jobs to the highest only $1,000 to the rental deficit, and the rest will be other types of debt. This ensures that
risk jobs first until all job losses are assigned. our final rental debt outcomes capture only rental debt caused by a job loss, not all debt.
FEDERAL RESERVE BANK OF PHILADELPHIA 7
scenarios in addition to the five policy scenarios.
For these, we always assume that 90 percent of
households receive the Stimulus scenario. For our
main overall scenario, we then assume that the
share of households receiving UI in each state is the
recipiency rate calculated from the Pulse Survey.20
Because the national rate in the Pulse Survey is 50
percent, we call this scenario Recipiency 50. We
then also show two additional overall scenarios to
understand how robust the overall results are to
The process then continues to the next month. reasonable differences in the UI recipiency rate.
Each month begins with each individual’s and each Recipiency 60 adds 10 percentage points to each
household’s employment and debt status at the state’s Pulse Survey rate (yielding a national rate of
end of the previous month. The CES again tells us 60 percent), and Recipiency 70 adds 20
the number of workers who lose jobs in each state percentage points.21
and industry in April. If there are more job losses,
we assign workers new job losses as described c. Caveats
previously. If there are job gains, we assign There are a few important caveats to our approach.
unemployed workers job gains in a similar way.19 First, as mentioned before we do not observe
We then recalculate household incomes after job household savings or nonhousing costs. We
losses (or gains) and compare them with rents and therefore estimate these from available sources,
other costs for the different scenarios, and these although they are important inputs and different
yield income deficits or surpluses for each values can yield different results. Second, at the
household. These then affect rental debt as time of writing, employment data from the CES are
described previously. only available through August 2020. We hold em-
We continue this process for all scenarios for each ployment fixed at its August level in all subsequent
month through March 2021. This yields information months, meaning any changes in the pace of the
from which we can calculate our four related debt recovery will affect debt estimates in December
outcomes in each month: the number of renter 2020 and March 2021.22 We hope to update
households with any accumulated debt, the share our results in the future to reflect changing
of all renter households with any accumulated employment and any major policy changes.
debt, the total dollars of accumulated debt, and Third, we do not account for financial strain
the average accumulated debt for households caused by hour or wage reductions that do not
with any debt. result in employment changes measured by the
CES. Fourth, we study how many households are
Overall Scenarios specifically in rental debt that has resulted from job
losses since March 2020. The PUMS data show that
While we model the five debt scenarios separately,
the overall debt picture nationally and by state will 20
State recipiency rates calculated from data in the Pulse Survey are included in the last
reflect a blend of households receiving different column of Table 6.
policies. We therefore provide three overall 21
For a specific example, assume a state has a recipiency rate of 55 percent in the Pulse
Survey. Then the Recipiency 50 scenario assumes that for workers in that state, 55 percent
of workers received the CARES UI and Stimulus policy scenario, 10 percent received the
19
When unemployed workers regain jobs in a given month, we recalculate their household Nothing scenario, and the remaining 35 percent received the Stimulus Only scenario. In this
income with the new income. If there is still a monthly deficit (because the new income is example, 90 percent of households received stimulus payments (regardless of UI receipt)
sufficiently low), they continue to accumulate rental debt each month as when they were and 45 percent of households do not receive UI (regardless of stimulus receipt).
unemployed, just more slowly. If the new household income yields a monthly surplus,
all of the monthly surplus is used to help pay off the stock of accumulated rental debt. 22
Most COVID-19-related job losses, and subsequent gains, have occurred by August. Thus, in
After enough months, the debt can be paid off completely and the household is no longer our results most households falling into rental debt have done so by August. This suggests
counted as in rental debt. Thus, someone can lose a job in April, go into rental debt, gain a that any changes to debt outcomes that we miss because we lack employment changes after
job in June, and be back out of rental debt by October. August may be small relative to the overall level of the debt outcomes.
8 HOUSEHOLD RENTAL DEBT DURING COVID-19
TABLE 1: NATIONAL SUMMARY STATISTICS
Ever Unemployed Never Unemployed All
Renter Households 7,509,255 24,449,184 31,958,439
Median Annual Household
47,633 49,750 49,183
Income Before Job Loss ($)
Median Annual Head of Household
28,565 35,862 33,516
Income Before Job Loss ($)
Median Monthly Rent ($) 1,055 1,059 1,058
Average Monthly Other Costs ($) 1,932 1,623 1,696
Average Adults per Household 2.1 1.7 1.8
Average Children per Household 0.8 0.7 0.7
Notes: Sample is all renter households with at least one member working before March 2020. Other costs, adults per household, and children per household shown as averages instead of medians
because there is less variation in these at the household level. The precision of these estimates should not be overinterpreted, and they are likely only accurate to one or two significant digits.
Sources: IPUMS 2018, CES, and CPS.
many working households struggled to meet hous- February 2020.24 There are 32 million such
ing and other costs even before job loss. We include households. Of these, 24.5 million maintain
these households in our simulation, but we do not consistent employment from March through
include these initial (pre-job loss) income deficits August. This leaves 7.5 million, or 23.4 percent,
when calculating rental debt or any nonhousing debt who are ever unemployed during the same period.
accrued after a job loss.23 While these are important, Pre-COVID median annual household income is
they are not the focus of this report. slightly lower for those who experience
unemployment from March to August compared
3. National Results with those who do not. The income difference is
more pronounced when looking at the median
Table 1 presents summary statistics of our sample of annual incomes of individual householders: $28,500
renter households with at least one adult worker in for those in households experiencing
23
Initial deficits may reflect problems in the survey data, outliers in terms of the nonhousing 24
The precision of all estimates in this report should not be overinterpreted, particularly given
costs we do not observe, households going into debt, or other types of preexisting financial the many assumptions required to generate them. Estimates are likely only accurate to one
insecurity. or two significant digits, and we discuss them accordingly
FEDERAL RESERVE BANK OF PHILADELPHIA 9
FIGURE 1: NATIONAL DEBT OUTCOMES FOR DIFFERENT POLICY SCENARIOS
A. Share with Debt B. Total with Debt
10 4.0
Households (millions)
8
3.0
Percentage
6
2.0
4
1.0
2
0 0
2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15
C. Total Debt D. Average Debt if Any
25 8,000
Dollars (billions)
20
6,000
Dollars
15
4,000
10
2,000
5
0 0
2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Nothing CARES UI and Stimulus CARES UI
Stimulus Standard UI
Figure notes: Sample is all renter households with at least one member working before March 2020. Months 13, 14, and 15 refer to January, February, and March 2021, respectively.
Sources: IPUMS 2018, CES, and CPS.
unemployment (which is often the householder) a. Different Policy Scenarios
versus $36,000 for those who are not. These Figure 1 shows our four debt outcomes by month
differences reflect the well-established finding for the five different policy scenarios described in
that lower-income workers have been more likely to the previous section.25 Each panel summarizes a
experience job loss because of COVID-19 (Chetty different debt outcome. Within each panel, each
et al. 2020). A smaller difference at the household line represents that outcome for a different policy
level may imply that households experiencing scenario. For example, Figure 1, Panel A, shows the
unemployment have more earners, and in fact we share of all 32 million renter households with any
see in Table 1 that they have more adults. Median rental debt in each month. Each line represents
monthly rent is similar across employed and a different policy scenario, such as the Nothing
unemployed households at around $1,050 per scenario and the CARES UI and Stimulus scenario.
month. Average monthly other costs are higher Panel B shows total households with debt, Panel C
for households experiencing unemployment,
reflecting more people in those households. 25
Here and throughout the report, month 3 corresponds to March 2020 and month 15
corresponds to March 2021.
10 HOUSEHOLD RENTAL DEBT DURING COVID-19
shows millions of dollars of debt, and Panel D show order to show how effective each component
average debt per household in debt. of these policies has been. Standard UI is a useful
These panels show that rental debt outcomes are benchmark. While outcomes in this scenario are
markedly different between the scenarios that certainly better than in the Nothing scenario, they
incorporate the CARES Act provisions and those are actually closer to the Nothing scenario than
that do not. In the Nothing scenario, the number of either the CARES UI or CARES UI and Stimulus
households in debt increases dramatically in April, scenarios. This suggests that the extra $600
reflecting the magnitude of employment losses per week in UI benefits provided by CARES was
in that month, and stays there through the end of instrumental in keeping households out of rental
the year. Total and average debt rise steadily each debt. The Stimulus scenario shows that Economic
month. By contrast, in the CARES UI and Stimulus Impact Payments alone were about as protective
scenario, in which everyone receives these policies, from rental debt as standard state UI typically is.
the number and share of households in debt stay However, comparing CARES UI with CARES UI and
low through the end of the year, only rising after Stimulus reveals little difference in any outcomes
December when most state UI benefits begin between them. This implies that stimulus payments
to expire. provided little additional benefits, in terms of these
In between these two extreme scenarios, we also outcomes, beyond receiving state UI plus the
show results for different intermediate scenarios in additional $600 per week from April to July. The
FEDERAL RESERVE BANK OF PHILADELPHIA 11
TABLE 2: NATIONAL DEBT OUTCOMES FOR DIFFERENT POLICY SCENARIOS
NOTHING STIMULUS ONLY
Share of Total Renter Share of Renter Total Renter
Renter House- Households Millions of Average Households Households
Month holds in Debt in Debt Dollars of Debt Debt If Any in Debt in Debt
3 0.4 134,819 78 578 0.4 134,819
4 6 1,914,087 1,316 688 0.3 98,036
5 9 2,880,800 3,689 1,281 2.9 919,422
6 9.8 3,129,446 5,684 1,816 4.8 1,540,796
7 10.1 3,233,644 7,656 2,368 5.9 1,875,215
8 10.3 3,279,797 9,566 2,916 6.4 2,050,966
9 10.4 3,317,020 11,643 3,510 6.8 2,184,571
10 10.5 3,346,003 13,809 4,127 7.1 2,280,902
11 10.5 3,368,579 16,033 4,760 7.4 2,355,180
12 10.6 3,392,346 18,298 5,394 7.5 2,410,321
13 10.7 3,410,150 20,593 6,039 7.7 2,455,595
14 10.7 3,425,014 22,911 6,689 7.8 2,493,226
15 10.8 3,439,394 25,248 7,341 7.9 2,524,836
Notes: Sample is all renter households with at least one member working before March 2020. The precision of these estimates should not be overinterpreted, and they are likely only accurate to
one or two significant digits.
Sources: IPUMS 2018, CES, and CPS.
12 HOUSEHOLD RENTAL DEBT DURING COVID-19
STIMULUS ONLY CARES UI AND STIMULUS
Share of Renter Total Renter
Millions of Average Debt Households Households Millions of Average Debt
Month Dollars of Debt If Any in Debt in Debt Dollars of Debt If Any
3 78 578 0 9,190 3 313
4 85 865 0 86 0 285
5 840 914 0 319 0 1,529
6 2,153 1,397 0 901 2 1,831
7 3,723 1,985 0 1,574 4 2,505
8 5,391 2,629 0 6,244 13 2,064
9 7,277 3,331 0.1 16,806 38 2,246
10 9,297 4,076 0.1 36,412 89 2,447
11 11,405 4,842 0.2 69,561 181 2,601
12 13,575 5,632 0.4 125,323 341 2,717
13 15,791 6,431 0.7 235,847 636 2,698
14 18,044 7,237 1.2 381,382 1,109 2,908
15 20,326 8,051 1.7 539,229 1,768 3,278
FEDERAL RESERVE BANK OF PHILADELPHIA 13
CARES scenarios’ effectiveness in preventing rental as more jobs are lost and unemployed households
debt reflects that the extra $600 was chosen to spend all of their stimulus payments meeting rent
replace 100 percent of lost pretax income for the obligations. The shares and totals then continue
average worker, which resulted in it replacing more rising, although more slowly given smaller
than 100 percent of lost income for 76 percent of employment changes, through March 2021.
unemployed workers (Ganong et al. 2020). Table 3 provides additional details on the patterns
Table 2 shows the values of the monthly debt described for Figure 2. In the Recipiency 50
outcomes depicted in Figure 1 for three of the scenario, 1.34 million households (4.2 percent
five policy scenarios: Nothing, Stimulus Only, of all renter households) will have accumulated
and CARES UI and Stimulus. If every household rental debt by the time the CDC eviction
experiencing unemployment were to receive moratorium expires in December. This would
CARES UI and Stimulus, then by December 2020 total $7.2 billion, or $5,400 for each household
approximately 125,000 renter households would with debt. These numbers would be slightly lower
have rental debt and would owe around $2,800 if recipiency rates are 10 or 20 percentage points
each. At the other extreme, if no households higher, although they are generally similar,
received any of these policies, 3.4 million suggesting the estimates are reasonably robust
households would owe $5,400 each. to other values of the recipiency rate.
The dramatic differences in debt outcomes Our results for total households in debt and millions
between the CARES UI scenarios and other of dollars of rent owed are similar to — but lower
scenarios shown in Figure 1 and Table 2 imply that than — some widely cited estimates published
whether a household experiencing unemployment previously.26 Our analysis differs from these efforts
actually receives UI is the biggest determinant in several meaningful ways, as described in the
of its likelihood of accumulating rental debt. introduction. We believe our choices provide
Consequently, they also imply that the share of all results that are most specific to our research
such households that actually receive state or question: how many households are likely to owe
federal UI — the recipiency rate — is key to rental debt, and thus be at risk of eviction,
understanding the overall picture of rental debt. because of pandemic-related job losses.
The next section shows these overall scenarios for
different likely values of the recipiency rate. 4. National Results by Race and Ethnicity
and Household Type
b. Overall Scenarios with Different Recipiency Rates
Figure 2 shows results for the three overall We now look at differences in rental debt outcomes
scenarios described in Section 2.b. Recipiency by race and ethnicity and by household type.
50 is our best approximation of the overall rental Previous research has documented that COVID-19
debt picture. Because each scenario is a different has had disproportionate negative impacts on
blend of the same specific policy scenario inputs health and employment in communities of color,
(Nothing, Stimulus, and CARES UI and Stimulus), suggesting that rental debt after job loss may
the patterns over time are mechanically very similar follow similar patterns. Furthermore, unlike
for the Recipiency 50 percent, 60 percent, and previous recessions, women’s employment has
70 percent scenarios. In the 50 percent scenario, been disproportionately impacted, with effects
the share of households with any rental debt rises
modestly to 0.7 percent by April, reflecting that the
26
See, for example, Aspen Institute, “20 Million Renters Are at Risk of Eviction; Policymakers
large employment decline in April was largely offset Must Act Now to Mitigate Widespread Hardship,” available at www.aspeninstitute.org/blog-
by the stimulus payments received by 90 percent of posts/20-million-renters-are-at-risk-of-eviction/ and National Coalition of State Housing
Agencies, “Analysis of Current and Expected Rental Shortfall and Potential Eviction Filings
households in this scenario. The share of households in the U.S.,” available at www.ncsha.org/resource/current-and-expected-rental-shortfall-
with debt then jumps more sharply in May and June and-potential-eviction-filings/.
14 HOUSEHOLD RENTAL DEBT DURING COVID-19
FIGURE 2: NATIONAL DEBT OUTCOMES FOR DIFFERENT RECIPIENCY RATES
A. Share with Debt B. Total with Debt
5 1.5
Households (millions)
4
Percentage
3 1.0
2
.5
1
0 0
2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15
C. Total Debt D. Average Debt if Any
10 8,000
Dollars (billions)
6,000
5 Dollars 4,000
2,000
0 0
2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Recipiency 50 Recipiency 60 Recipiency 70
Figure notes: Sample is all renter households with at least one member working before March 2020. Months 13, 14, and 15 refer to January, February, and March of 2021, respectively. Recipiency
rates are calculated from the Census Household Pulse Survey and described in detail in the text.
Sources: IPUMS 2018, CES, and CPS.
FEDERAL RESERVE BANK OF PHILADELPHIA 15
TABLE 3: NATIONAL DEBT OUTCOMES FOR DIFFERENT RECIPIENCY RATES
RECIPIENCY RATE 50 PERCENT RECIPIENCY RATE 60 PERCENT
Share of Renter Total Renter Millions Share of Renter Total Renter
Households Households of Dollars Average Debt Households Households
Month in Debt in Debt of Debt If Any in Debt in Debt
3 0.2 71,230 40 558 0.2 58,667
4 0.7 229,514 164 715 0.7 219,719
5 2 642,387 688 1,071 1.7 550,476
6 2.8 908,120 1,385 1,525 2.4 754,131
7 3.3 1,050,337 2,185 2,080 2.7 862,973
8 3.5 1,126,196 3,019 2,681 2.9 921,723
9 3.7 1,187,828 3,962 3,335 3 971,051
10 3.9 1,238,474 4,979 4,020 3.2 1,014,025
11 4 1,286,334 6,056 4,708 3.3 1,057,772
12 4.2 1,337,766 7,196 5,379 3.5 1,109,267
13 4.4 1,413,209 8,426 5,962 3.7 1,191,234
14 4.7 1,503,544 9,764 6,494 4 1,292,360
15 5 1,597,944 11,212 7,016 4.4 1,399,383
Notes: Sample is all renter households with at least one member working before March 2020. Other costs, adults per household, and children per household shown as averages instead of medians
because there is less variation in these at the household level. The precision of these estimates should not be overinterpreted, and they are likely only accurate to one or two significant digits.
Sources: IPUMS 2018, CES, and CPS.
16 HOUSEHOLD RENTAL DEBT DURING COVID-19
RECIPIENCY RATE 60 PERCENT RECIPIENCY RATE 70 PERCENT
Share of Renter Total Renter
Millions of Average Debt Households Households Millions of Average Debt
Month Dollars of Debt If Any in Debt in Debt Dollars of Debt If Any
3 32 549 0.1 46,104 25 536
4 156 709 0.7 209,924 147 701
5 604 1,097 1.4 458,566 520 1,134
6 1,170 1,551 1.9 600,141 955 1,591
7 1,813 2,101 2.1 675,609 1,441 2,133
8 2,481 2,692 2.2 717,251 1,943 2,709
9 3,238 3,334 2.4 754,274 2,514 3,333
10 4,058 4,002 2.5 789,576 3,138 3,974
11 4,934 4,665 2.6 829,210 3,812 4,597
12 5,872 5,294 2.8 880,767 4,549 5,165
13 6,911 5,801 3 969,260 5,395 5,566
14 8,071 6,245 3.4 1,081,175 6,377 5,899
15 9,356 6,686 3.8 1,200,822 7,500 6,246
FEDERAL RESERVE BANK OF PHILADELPHIA 17
FIGURE 3: DEBT OUTCOMES BY RACE AND ETHNICITY
A. Share with Debt B. Total with Debt
8 800
Households (thousands)
6 600
Percentage
4 400
2 200
0 0
2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15
C. Total Debt D. Average Debt if Any
5 8,000
Dollars (billions)
4 6,000
Dollars
3
4,000
2
1 2,000
0 0
2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Asian White Other nonwhite
and non–Hispanic
Hispanic Black
Figure notes: Months 13, 14, and 15 refer to January, February, and March of 2021, respectively. Race/ethnicity categories are exclusive, such that Hispanic households may be of any race and all
other racial groups refer to non-Hispanic households. Debt outcomes are calculated using the state-specific recipiency rates estimated from the Census Bureau’s Household Pulse Survey, which yields
a national average of 50 percent.
Sources: IPUMS 2018, CES, and CPS.
likely compounded by the closure of many schools of the householder. Panel A shows that Hispanic
and childcare facilities. As a result, female-headed households are the most likely to experience any
households, particularly those with children, may debt (6 percent have rental debt by December),
be especially vulnerable to economic shocks and followed by Black and other nonwhite and
thus accruing rental debt. non-Hispanic households (4.3 percent). White and
Asian households are the least likely, at 3.5 percent.
a. Results by Race and Ethnicity
White households are a plurality of households in
Figure 3 shows the overall scenario of rental debt debt (Panel B) and total debt (Panel C), reflecting
outcomes broken out by the race and ethnicity that they are a plurality of all renter households.
18 HOUSEHOLD RENTAL DEBT DURING COVID-19
TABLE 4: SUMMARY STATISTICS AND DECEMBER DEBT OUTCOMES BY RACE AND ETHNICITY
Panel A: Summary Statistics for Households Ever Unemployed
Median
Median Annual
Annual Head of
Household Household Average
Income Income Median Average Average Children
Renter Before Job Before Job Monthly Monthly Adults per per
Households Loss Loss Rent Other Costs Household Household
Asian 385,649 53,000 28,690 1,312 2,167 2.5 0.7
Black 1,319,432 40,847 26,463 995 1,859 1.9 0.9
Hispanic 1,959,446 46,109 25,404 1,146 2,358 2.4 1.1
Other
non-Hispanic 242,684 46,000 27,084 1,035 1,884 2 0.8
and nonwhite
White 3,602,044 51,232 31,421 1,006 1,705 1.9 0.6
Panel B: Debt Outcomes in December 2020 for 50% Recipiency Rate
Share of Renter Total Renter
Total Renter Millions of Dollars Average Debt
Households Households
Households of Debt If Any
in Debt in Debt
Asian 1,909,452 3.5 66,206 420 6,351
Black 6,004,564 4.3 257,224 1,263 4,910
Hispanic 6,740,067 6.0 405,296 2,317 5,716
Other
non-Hispanic 1,024,606 4.3 44,109 231 5,238
and nonwhite
White 16,277,643 3.5 564,931 2,965 5,248
Notes: Sample is all renter households with at least one member working before March 2020. Months 13, 14, and 15 refer to January, February, and March of 2021, respectively. Debt outcomes
are calculated using the state-specific recipiency rates estimated from the Census Bureau’s Household Pulse Survey, which yields a national average of 50 percent. The precision of these estimates
should not be overinterpreted, and they are likely only accurate to one or two significant digits.
Sources: IPUMS 2018, CES, and CPS.
Table 4 shows summary statistics for renter Overall, households of color are generally larger
households ever unemployed (Panel A) by race and and more likely to have children present.
ethnicity and also the data points from Figure 3 for Although households of color make up just under
December 2020 (Panel B). Initial household and half of all renter households, they account for 58
householder incomes are lowest for households percent of households projected to have rent debt
that are Black, Hispanic, or some other race. by the end of December and 59 percent of all rental
Average household size is largest for Asian and debt accrued by that time. As noted previously,
Hispanic households, contributing to higher average Hispanic households are particularly likely to
monthly nonhousing costs for these households. experience rent shortfalls, representing 30 percent
FEDERAL RESERVE BANK OF PHILADELPHIA 19
FIGURE 4: DEBT OUTCOMES BY HOUSEHOLD TYPE
A. Share with Debt B. Total with Debt
6 600
Households (thousands)
Percentage
4 400
2 200
0 0
2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15
C. Total Debt D. Average Debt if Any
4 8,000
Dollars (billions)
3 6,000
2 Dollars 4,000
1 2,000
0 0
2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Family, female Nonfamily, male Nonfamily, female
Family, married Family, male Other
Notes: Sample is all renter households with at least one member working before March 2020. Months 13, 14, and 15 refer to January, February, and March of 2021, respectively. Debt outcomes are
calculated using the state-specific recipiency rates estimated from the Census Bureau’s Household Pulse Survey, which yields a national average of 50 percent. The precision of these estimates should
not be overinterpreted, and they are likely only accurate to one or two significant digits.
Sources: IPUMS 2018, CES, and CPS.
of households with rent debt in December despite emerging in the early months of the pandemic,
being only 21 percent of all renter households. particularly after stimulus payments are spent,
Although our simulation applies the same UI and slowly widening thereafter. Family households
recipiency rates across unemployed workers within headed by single adults, which include single
each state, state-level variation in UI eligibility and parents and multigenerational households, are the
benefit levels has been shown to be an important most likely to accumulate rent debt by December,
driver of racially disparate UI outcomes nationally with around 4.9 percent in rental debt. There
(Edwards 2020) and could contribute to our are 350,000 such households in debt, the vast
national results. majority of which (274,000) are headed by females.
Families headed by married couples represent
b. Results by Household Type the largest number of households with rent debt,
Figure 4 shows results for the 50 percent reflecting that they are the largest group overall. For
recipiency rate scenario broken out by household households with children headed by either single or
type. Again, we see a similar pattern of disparities married women, the added difficulties of accessing
20 HOUSEHOLD RENTAL DEBT DURING COVID-19
TABLE 5: SUMMARY STATISTICS AND DECEMBER DEBT OUTCOMES BY HOUSEHOLD TYPE
Panel A: Summary Statistics for Households Ever Unemployed
Median
Median Annual
Annual Head of
Household Household Average
Income Income Median Average Average Children
Renter Before Job Before Job Monthly Monthly Adults per per
Households Loss Loss Rent Other Costs Household Household
Family, female 1,337,564 36,095 23,356 1,026 2,102 2 1.1
Family, male 460,275 52,899 30,000 1,069 1,975 2.3 0.7
Family,
2,737,240 61,394 31,421 1,187 2,480 2.5 1.2
married
Nonfamily,
728,472 30,000 25,821 912 828 1.2 0
female
Nonfamily,
1,022,660 37,029 31,739 881 839 1.3 0
male
Other 1,223,043 53,349 26,641 1,047 2,074 2.3 0.8
Panel B: Debt Outcomes in December 2020 for 50% Recipiency Rate
Share of Renter Total Renter
Total Renter Millions of Dollars Average Debt
Households Households
Households of Debt If Any
in Debt in Debt
Family, female 5,572,949 4.9 273,988 1,363 4,974
Family, male 1,559,384 4.9 75,790 428 5,642
Family,
10,506,891 4.2 436,165 2,565 5,881
married
Nonfamily,
4,777,096 3.5 166,481 846 5,080
female
Nonfamily,
5,561,611 3.7 207,171 1,080 5,211
male
Other 3,980,508 4.5 178,171 915 5,135
Notes: Sample is all renter households with at least one member working before March 2020. Months 13, 14, and 15 refer to January, February, and March of 2021, respectively. Debt outcomes
are calculated using the state-specific recipiency rates estimated from the Census Bureau’s Household Pulse Survey, which yields a national average of 50 percent. The precision of these estimates
should not be overinterpreted, and they are likely only accurate to one or two significant digits.
Sources: IPUMS 2018, CES, and CPS.
childcare during the pandemic could continue to Table 5 shows summary statistics for renter
depress employment rates (not modeled here), households ever unemployed (Panel A) by
increasing the likelihood that more of these house- household type and also the data points from
holds will experience rental debts as UI benefits Figure 4 for December 2020 (Panel B). Prior to job
expire for most states in 2021 (Alon et al. 2020). loss, female-headed households (both family and
FEDERAL RESERVE BANK OF PHILADELPHIA 21
TABLE 6: DEBT OUTCOMES IN DECEMBER 2020 FOR 50% RECIPIENCY RATE, BY STATE
Share of Renter Total Renter
Households Households Millions of Average Debt State
State in Debt in Debt Dollars of Debt If Any Recipiency Rate
AK 3.1 2,163 14 6,470 56.9
AL 3.8 15,525 63 4,075 37.4
AR 3.4 9,877 38 3,810 48.4
AZ 4.2 29,779 147 4,925 37.3
CA 5.4 239,619 1,666 6,953 52.3
CO 2.7 15,853 83 5,215 50.4
CT 5 16,167 92 5,676 45.7
DE 4.7 3,822 19 5,090 51.4
FL 5.6 112,709 640 5,676 38.5
GA 3 31,667 141 4,440 49.9
HI 5.5 7,963 66 8,340 64.5
IA 3.1 7,917 31 3,854 44.6
ID 2.5 3,382 10 2,811 36.7
IL 3.5 42,308 204 4,818 50
IN 2.9 16,512 58 3,504 44.3
KS 3.1 8,783 35 3,966 48.8
KY 3.3 12,817 45 3,515 53.6
LA 4.4 19,152 86 4,487 53.5
MA 4.8 32,663 192 5,892 53
MD 3.5 19,896 125 6,268 55
ME 2.8 2,733 9 3,238 52.1
MI 5.4 42,669 175 4,110 57.7
MN 2.9 13,096 59 4,480 55.5
MO 2.7 15,614 63 4,015 50.5
MS 2.6 6,346 22 3,527 52.3
MT 1.9 1,836 5 2,828 48.7
22 HOUSEHOLD RENTAL DEBT DURING COVID-19
TABLE 6: DEBT OUTCOMES IN DECEMBER 2020 FOR 50% RECIPIENCY RATE, BY STATE
Share of Renter Total Renter
Households Households Millions of Average Debt State
State in Debt in Debt Dollars of Debt If Any Recipiency Rate
NC 4.4 44,745 196 4,371 44.9
ND 2.3 2,039 9 4,178 58
NE 2.3 4,478 17 3,708 42.1
NH 3.2 3,603 18 4,923 60.8
NJ 4.2 37,171 220 5,907 61.3
NM 2.9 5,608 23 4,154 50.5
NV 4.2 15,453 81 5,221 61.1
NY 5.3 128,018 822 6,419 63.2
OH 3.9 43,699 171 3,919 49.8
OK 3.3 12,387 50 4,013 34.4
OR 4.4 19,028 96 5,035 42.2
PA 4.5 48,124 224 4,663 48.3
RI 2.3 2,516 11 4,251 72.4
SC 3.3 14,146 58 4,125 45.1
SD 2.5 2,111 8 3,852 37.8
TN 3.2 20,197 83 4,125 48.4
TX 3.8 112,670 574 5,095 44.9
UT 2.7 6,384 29 4,506 45
VA 3.2 26,256 147 5,614 50.1
VT 3.6 1,853 8 4,473 66.1
WA 4 30,373 163 5,367 44.5
WI 3.7 20,565 83 4,048 45.7
WV 2.7 3,652 13 3,428 52.7
WY 3.4 1,820 7 3,924 43.6
Notes: Sample is all renter households with at least one member working before March 2020. Months 13, 14, and 15 refer to January, February, and March of 2021, respectively. Debt outcomes
are calculated using the state-specific recipiency rates estimated from the Census Bureau’s Household Pulse Survey, which yields a national average of 50 percent. The precision of these estimates
should not be overinterpreted, and they are likely only accurate to one or two significant digits.
Sources: IPUMS 2018, CES, and CPS.
FEDERAL RESERVE BANK OF PHILADELPHIA 23
nonfamily) had significantly lower incomes than these challenges are likely to grow in the early
other household types, suggesting they may have months of 2021 as existing UI benefits are
had less of a buffer against economic shocks. exhausted. Extending UI benefits beyond the
By definition, family households are generally current limit of around 39 weeks for most states
larger and more likely to have children present. and expanding aid to households not receiving UI to
Accordingly, these households tend to have begin with would help mitigate the disproportionate
both higher median rents and higher impact of COVID-19 for these households.
nonhousing expenses.27
Breaking out rental debt outcomes by
5. Results by State
demographic characteristics shows that
COVID-related job losses are likely to widen many
Table 6 shows each of the four debt outcomes in
preexisting disparities in economic distress,
December for all states in the overall scenario
translating into heightened housing insecurity
with a 50 percent recipiency rate. Results reveal
for already disadvantaged groups. In particular,
substantial variation in each of the outcomes by
Hispanic households, Black households, and
state. For example, the share of renter households
nonmarried family households (most of which are
female-headed), are disproportionately likely to owe in debt by December ranges from 1.9 percent in
back rent when the CDC moratorium expires at the Montana to 5.6 percent in Florida, and average
end of December. To the extent that the economic debt conditional on having any debt ranges from
recovery also lags for workers in these households, $2,800 in Idaho to $8,340 in Hawaii. These
differences may reflect differences in state
27
“Other” households have similar characteristics to family households. Although a employment losses, differences in state incomes
household type is not assigned for these households, they may consist of unrelated adults and rents, differences in state UI recipiency rates,
and/or children who are not related to the individuals designated as householder (although
they may be related to another adult in the household). and differences in state UI income replacement
24 HOUSEHOLD RENTAL DEBT DURING COVID-19
rates. The rankings of total renter households in
debt and millions of dollars in debt mainly reflect
rankings of state renter populations. Overall, these
results can help state and local policymakers
address the specific situations in their states.
6. Conclusion
Our results show that polices enacted to replace
lost income for workers losing jobs during the
COVID-19 pandemic, particularly the enhanced
UI provided by the CARES Act, have been highly
effective at keeping renter households out of
debt for those households that received these
benefits. Additionally, as intended, these policies
debt in December 2020, even before accounting
were far more protective than standard state UI
for the costs of administration and the need for
alone would have been. By contrast, households
spending on other critical housing-related
that received nothing at all or only Economic
services.29 Leveraging existing federal housing
Impact Payments are far more likely to have
supports, such as the Housing Choice Voucher and
accumulated rental debt since March 2020.
Emergency Solutions Grants programs, could be
These findings point to some key takeaways for an efficient and equitable means of delivering
policymakers. First, further extending state and additional rental relief (Galvez et al. 2020).
federal UI benefits beyond current maximums (39
The national eviction moratorium is currently set
weeks in the typical state) could help prevent many
to expire December 31, 2020. Like the patchwork
new households from falling into debt beginning in
of state and local moratoriums preceding it, this
December.28 Given that multiple extensions were
temporary measure has protected many renters
granted during the Great Recession, there is strong
from the threat of losing their homes in the middle
precedent for doing so. This may be particularly
of a pandemic. However, our analysis suggests that
important if, as our simulation assumes, the pace
this stopgap measure has left millions of additional
of economic recovery is slow. Our results also
households, many owing thousands of dollars of
suggest that extending UI supplement amounts
back rent, at risk when the moratorium expires.
would continue to help protect households
These households are primarily those with workers
receiving UI from accruing rental debt.
who lost jobs yet did not receive state or federal UI
However, households that never received UI, (and other associated CARES Act provisions).
of which we estimate there are many, may need As states and cities allocate additional funding
alternative sources of rental support. Although the to meet the needs of their residents, they should
CARES Act provided a modest amount of funding ensure that programs are accessible to those in
for state and local governments to develop need, paying particular attention to eligibility
responses to emerging housing issues, our results requirements, making program information widely
show that it is insufficient to meet projected rental available, and avoiding making enrollment or
compliance excessively burdensome.
28
The modal state currently has a 39-week maximum (26 standard plus the extra 13 weeks
included in the CARES Act). For workers losing jobs and beginning UI receipt in April, 39 29
This refers to the $5 billion allocated to the Community Development Block Grant – CARES
weeks corresponds to late December 2020 or early January 2021. (CDBG-CV) program.
FEDERAL RESERVE BANK OF PHILADELPHIA 25
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26 HOUSEHOLD RENTAL DEBT DURING COVID-19
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FEDERAL RESERVE BANK OF PHILADELPHIA 27
www.PhiladelphiaFed.org • @PhiladelphiaFed
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