How Far Will a Household Stimulus Check Stretch? It Depends on the Cost of Rent.
Stimulus checks began rolling out last week and will continue to be delivered over the next several weeks. But how far the money will go depends significantly on where people live and how much housing and basic necessities cost in their community.
As stay at home orders continue in states across the county, millions of renters find themselves unemployed or with severely reduced hours due to Covid-19-related shutdowns. For many of these renters, it is not clear how they will pay their rent in the coming months. Federal, state, and local moratoriums on evictions exclude millions of renters and offer only temporary protection for some. Eventually, tenants will have to pay back what they owe.
The federal government is also providing short-term relief through the $2 trillion CARES Act. While the exact value of these payments will vary by household,1 78% (33.8 million) renter households earn $75,000 or less, qualifying them for at minimum a $1,200 stimulus payment. Those experiencing job loss may receive an additional $600 per week in federal unemployment compensation for up to four months. However, how far this money stretches depends largely on where those renters live and how much they pay for housing and other household needs.
According to data from the U.S. Census Bureau, nearly one-in-three renter households earning $75,000 pay more than $1,200 per month in rent.2 Many of the areas hit hardest by Covid-19 and job losses include some of the highest cost regions in the country, such as in the New York City Tri-State Area and California.
The maps below show how far renter households earning $75,000 or less could stretch a stimulus check to cover their rent, depending on where they live. For example, in California, which has seen an intense surge in unemployment claims, half of renter households earning $75,000 pay more than $1,200 in rent each month.
While pausing evictions, extending unemployment benefits, and delivering stimulus checks are steps in the right direction and critical forms of relief, a holistic, longer-term approach is needed to address the serious risks faced by renters in this crisis. This includes further direct rental assistance to keep people in their homes, as well as relief to mortgage servicers to keep the rental housing market stable.
Enterprise policy experts are calling on Congress to provide increased funding for the HOME Investment Partnership Program in the next stimulus package in order to provide meaningful, direct rental assistance to landlords on behalf of tenants. Without bold action at the federal level, current measures will become temporary stopgaps, leaving millions still at risk of missed rent payments and the possibility of losing their home.
1The baseline amount for one wage earner making $75,000 or less is $1,200. Seventy-eight percent of renter households in the U.S. earn $75,000 or less, annually.
2U.S. Census Bureau 2014-2018 ACS, Table B25122: Household Income in the Past 12 Months (In 2011 Inflation-Adjusted Dollars) by Gross Rent.