To keep up with housing payments during the pandemic, renters have had to tap a wide range of financial resources, reports Harvard University’s Joint Center for Housing Studies (JCHS) in “Making the Rent: Household Spending Strategies During the COVID-19 Pandemic.” The report examines how households have managed their finances and rental payments in response to income loss during the pandemic. Researchers pulled data from U.S. Census Bureau Household Pulse Surveys conducted between mid-August 2020 and late March 2021 to identify patterns in rental payments across a variety of household characteristics, including race and ethnicity, income level, and presence of children.
One level deeper: The report finds that among those who lost employment income, households making less than $25,000 were much less likely to use regular income sources, credit cards, or savings to meet their spending needs, likely because they lacked access to these resources. Instead, lower-income households were more likely to rely on informal borrowing from family and friends (35 percent for lower-income versus 16 percent for higher-income households) as well as supplemental nutrition assistance program (SNAP) benefits (32 percent for lower-income versus 4 percent for higher-income households). The paper also shows that Black and Hispanic renters, who have lower incomes on average because of discrimination in education and labor markets, engaged in similar spending strategies in response to a financial shock during the pandemic.
One takeaway: While emergency rental assistance is of crucial importance for households that have lost income and fallen behind on rent, policies focusing on rental arrears may not address the full impact of lost income among renters. The findings suggest that the financial impacts of the pandemic are likely deeper than the estimates of rent arrears alone might suggest. The impacts extend beyond households who lost income and into the communities of those immediately impacted.
Also, even if they did not fall behind on rent, renters who lost income during the pandemic likely still experienced financial hardships that had economic consequences for their wider communities. The authors argue that broad-based cash-assistance programs may better mitigate the negative impacts of lost income among renters and their communities.