August 24, 2020

In a Pandemic, Housing Instability Is a Preexisting Condition

Since the beginning of the Covid-19 pandemic, housing advocates have warned that, in addition to the public health and economic impacts, housing instability could become one of the biggest threats posed by the virus fallout. The predicted spikes in evictions and homelessness have so far been held at bay, thanks to temporary expanded unemployment insurance, federal stimulus payments, and eviction moratoria keeping most Americans in their homes. With most of these supports now expired and political gridlock creating uncertainty around whether and how much they may be extended, however, concerns about housing are now taking on even greater urgency.

Yet even before the pandemic struck, an existing crisis in housing affordability was already putting housing stability at risk for millions of Americans. According to the U.S. Census Bureau’s 2018 American Community Survey, nearly half (47.5 percent) of all renter households were spending above the federal standard of 30 percent of income on their housing, despite real wage growth and national unemployment rates at near-record levels. Such households are less likely to have sufficient savings to fall back on in the event of a emergency or income disruption. 

It is therefore worth asking, to what extent are those at greatest risk of housing instability now the same households that were struggling before the pandemic? Are job and income losses concentrated among renters most likely to have pre-existing housing affordability challenges? Or alternatively, are different sets of households – by income and race/ethnicity – now finding themselves also struggling to afford their housing?

Pre-Pandemic Housing Challenges Were Common

In 2018, shares of households with cost burdens were even greater among some subsets of renters. For example, more than 80 percent of renter households earning under $25,000 in 2018 were spending at least 30 percent of that income on their housing (see Figure 1, X-axis). Even among renters with incomes between $25,000 and $50,000, more than half were cost burdened. A majority of Black and Hispanic renters were also spending high shares of their incomes on housing before the pandemic hit, along with 43 percent of White renters. 

The consequences of living unaffordably can be dire; renters spending high shares of their income on housing often suffer from material deprivation, or a lack of sufficient income to afford daily necessities such as food, clothing and healthcare. Such deprivation has been linked to poor health and educational outcomes and a lower life expectancy. Saving money for the future or long-term use is also difficult under such conditions. Of course, the consequence of not paying high these high housing costs is a risk of eviction and homelessness.

These pre-pandemic rental affordability challenges were caused by many long-standing factors, such as the high cost of building new affordable housing, restrictive zoning that constrains the housing supply, and low wage growth among lower-income workers. In contrast, the housing challenges posed by the pandemic are the product of a sudden and unexpected event, leading to job and income losses on a scale not seen in over 90 years. Does this mean the scope of the housing instability now being felt is very different from the crisis already in place in rental markets?

Figure 1: Shares of Renter Households with Housing Challenges

figure 1 - RD  blog

Job and Income Losses Add to Housing Concerns

Figure 1 (Y-Axis) also shows that just over a third of renter households are reporting recent housing insecurity – defined as not paying rent in the prior month or having slight or no confidence in ability to pay the next month – per Census Pulse survey data pooled over a 12-week period from April 23 through July 20.1 This share has been fairly consistent over this period, ranging from 31.6 to 37.5 percent in each week included in the survey. 

As with housing cost burdens in 2018, some subsets of renter households naturally face even larger risks of housing insecurity. For example, Black and Hispanic renters are more than twice as likely to be housing insecure when compared with White renters. Low-income households similarly report greater concerns with making their rent payments relative to higher income households.

Yet comparing these recent data to the pre-pandemic cost burden shares reveals some key differences. The rate of households spending high amounts of income on housing was more evenly distributed with respect to race and ethnicity, while housing security concerns are much more concentrated among renters of color, as evidenced by the steep trendline (in orange) linking these two metrics by race. This likely reflects the disproportionate impact of recent job and income losses among workers of color, as evidenced by unemployment rates that rose higher and declined slower relative to those of white workers. This also means that, if these insecure renters continue to struggle to make rent, existing racial inequities in evictions and homelessness will get worse. 

On the other hand, housing security concerns are more evenly distributed by income relative to cost burden shares, as shown in the flatter blue trendline above. Indeed, more renters earning over $50,000 reported difficulties paying rent this spring than spending high shares of their income on housing in 2018. The breadth of economic impacts from the pandemic, as well as the small shares of renters with sufficient reserves to cover unexpected income losses, are likely shifting concerns about making rent higher up the income spectrum.

The Cure for Housing Security, Now and Always

As noted above, the catalysts for pre-pandemic housing affordability concerns and more recent reporting on housing insecurity among renters differ, as do some of the households most impacted by these housing challenges. Despite this, federal policymakers have at their disposal the means to resolve both these crises, if they can find the will to do so.

Recent analyses reveal that income supplements, such as the stimulus payments and enhanced unemployment income benefits included in the federal CARES Act, have helped renters stay stably housed during times of crisis. Indeed, the Census Pulse survey found that over 80 percent of renters who used their stimulus payments to cover expenses put at least some of those funds towards paying their rent. 

The same is true, however, for renters facing smaller-scale crises of housing security and affordability. Multiple pilot programs that provide income supplements to low-income households have found they not only reduce incidences of housing instability and homelessness, but a wide range of ancillary benefits including improved mental and physical health, reliance on other public supports, and 

It is clear that income supports given to renters in need can reduce both housing cost burdens and housing insecurity, but only so long as those supports remain available. With the impacts of the pandemic and recession unlikely to ebb anytime soon, it is vital that Congress provide additional income supplements now to keep renters stably housed. Yet even after a cure for Covid-19 is available and the economy recovers, lawmakers should continue to assist low-income renters through expanded cash grants, housing vouchers, and other income supports.

Check out Enterprise’s Resilient Futures resource page for more information on housing and policy responses to the pandemic, and subscribe to our daily and bi-weekly policy newsletters for more information on Enterprise’s federal, state, and local policy work.

 1 Pooled survey data allows for more robust analyses and smaller margins of error among renter subsets by race, income and metro areas. Pseudo household weights were used to approximate household shares. 
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