14% of U.S. tenants fell behind on payments during the pandemic
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-year-old 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 pre-pandemic 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 were 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 COVID-19 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.
Advocates worry the ending of the CDC’s moratorium could have devastating effects, especially for renters of color who already faced disproportionate rates of housing instability before the pandemic. But property owners worry about paying their own bills and argue the eviction moratoriums jeopardize the availability of safe, sustainable and affordable housing for all Americans.
In a statement emailed to Stateline shortly after the CDC extension was announced, Bob Pinnegar, president of the National Apartment Association, said his group continues to oppose the moratoriums and that the CDC must not extend its ban again.
“Flawed eviction moratoriums leave renters with insurmountable debt and housing providers holding the bag as our nation’s housing affordability crisis spirals into a housing affordability disaster,” wrote Pinnegar.
Trouble reaching renters
State leaders set aside at least $2.6 billion for rent relief from the CARES Act Coronavirus Relief Fund that Congress approved in March 2020. The Center for Public Integrity found 16% of that money hadn’t made it into the pockets of tenants or their landlords a year later.
The largest share of federal rent relief, $46 billion, came via two emergency rental assistance packages Congress approved in December 2020 and March 2021.
But many states did not have the capacity or resources to administer the relief money, which must be spent by 2022 or 2025, respectively, under the two packages.
It took the city of San Francisco months to start distributing the $26 million it was allocated, due to a dispute with the state, according to a report by the San Francisco Public Press. At the end of May, only four San Francisco households had received funds, according to the report.
Rhode Island received some $200 million in rent relief, but by early June had distributed only $750,000 since the program launched in March, according to The Providence Journal. The distribution was delayed because of a technological glitch that excluded landlords from the system.
Marsha Ortiz, the community manager at Trinity Meadows apartments in Fort Worth, said her team has been able to help about a dozen of their 264 households, including Harrison, apply for emergency relief. But they’ve also had two residents who declined the help, she said. One owed more than $6,000 when the apartment manager filed for eviction.
“We tried everything,” Ortiz said. “We set up a payment plan, waived late fees and took payments of $100 or whatever she could give us, but she refused to complete her application for whatever reason and we had no other choice but to evict her.”
Another Trinity Meadows resident who applied for rental assistance at the end of last year was paid only a few weeks ago, according to Ortiz. She said the time frames for receiving aid have varied from a few weeks to six months, and that the results largely depend on which governmental body or nonprofit is processing the application.
Tenants who live in Fort Worth and Arlington, for example, can apply directly through the city; the rest of Tarrant County residents must apply through the county or the state.
The cities and counties partnered with local nonprofits including Fort Worth Housing Solutions, Samaritan House and the Salvation Army to help process the applications.
Dana Sinegal, a relocation coordinator at Fort Worth Housing Solutions, said the organization’s processing time has dropped from days to a couple of hours. On a recent day, Sinegal and her team processed 30 applications at a pop-up fair held at a local community center.
“People came ready today,” Sinegal said. “I think the process has gotten easier for everybody because now we know who’s eligible and what we need to process these applications more efficiently.”
Since March, Fort Worth has paid out more than $3.7 million of the $27 million it was allocated by Congress, according to Tarrance Jones, the city’s interim neighborhood service manager.
“We have what, three or four years to spend the money,” said Jones in an interview. “So I think we’re doing pretty good.”
Trying to move quickly
Federal officials extended the CDC moratorium to give housing authorities more time to set up the network needed to distribute emergency funds, and to allow more time to educate landlords and grantees on how to help tenants, said Gene Sperling, a White House senior advisor and coordinator for the 2021 American Rescue Plan.
But states and localities that are slow to use the funds might lose the money, Sperling said during a national call on June 28 that was hosted by the National Low Income Housing Coalition.
“The statute doesn’t provide a lot of stick and carrots, but it does provide the ability to reallocate to the most affected,” Sterling said during the call. “That is something that we will not be shy in making clear.”
The Texas Rent Relief Program has paid out $445 million, less than a third of the $1.3 billion in emergency relief funds allocated to the state by the U.S. Treasury Department.
Just over half of those payouts, $233 million, have gone to pay rental arrears, while the rest have gone to pay for tenants’ next few months of rent or their past due or future utilities, according to state data. PolicyLink estimates total rent debt in Texas to be more than $1.4 billion as of June 7, down from $2.2 billion on May 24.
Texas was approving approximately $10 million daily for rental and utility payment assistance and had $510 million in federal funds disbursed or in the payment pipeline as of July 1, according to Texas Department of Housing and Community Affairs spokesperson Russ Rhea. In an email, he said out of 13,000 applications currently under review, approximately 9,400 are missing required documentation.
He said applicants waiting for approval should check for texts, voicemails and emails from the program and reply with the required information as soon as possible.
Harrison of Fort Worth said she has heard nothing since she applied more than six weeks ago.
“I’m lucky that my landlord is working with me and understands my situation,” Harrison said. “But I know there’s many people out there who are not as lucky or don’t know this money is available.”
Stateline is a project of States Newsroom that provides daily reporting and analysis on trends in state policy.