the impact of covid-19 on renters and rental markets...notes: the percent area median income...

© PRESIDENT AND FELLOWS OF HARVARD COLLEGE

The Impact of COVID-19 on Renters and Rental Markets

Whitney Airgood-Obrycki, PhD

Research Associate

Housing Research Seminar

September 4, 2020

The Affordability Crisis Before COVID-19

3 | © PRESIDENT AND FELLOWS OF HARVARD COLLEGE Joint Center for Housing Studies of Harvard University

Low-Cost Units Account for a Shrinking Share of the Nation’s Rental Stock

Notes: Rental units may be occupied, vacant for rent, or rented but unoccupied; exclude those occupied without cash rent. Dollar values adjusted for inflation using the

CPI-U for All Items Less Shelter. Contract rents exclude utility costs paid separately.

Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates via IPUMS USA.

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Number of Units with Real Contract Rents Under $600 (Millions)

Units (Left scale) Share (Right scale)

Share of Units with Real Contract Rents Under $600 (Percent)


Rents Continue to Climb Much Faster than General Inflation

Note: Changes are four-quarter rolling averages.

Source: JCHS tabulations of BLS, Consumer Price Indexes.

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Price for All Consumer Items Less Shelter Rent Index for Primary Residence

Annual Change (Percent)


Both the Number and Share of Cost-Burdened Renters Remain Near Record Highs

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Number of Renter Households (Millions)

Severely Cost Burdened Moderately Cost Burdened Share with Cost Burdens (Right scale)

Share of Renter Households (Percent)

Notes: Moderately (severely) cost-burdened households pay more than 30% (more than 50%) of their income for housing. Households with zero or negative income are

assumed to have burdens, while households paying no cash rent are assumed to be without burdens.

Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.


Black and Hispanic Renter Households Were More Likely to Be Cost Burdened than White Households

Notes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households pay more than 30% (more than 50%) of income

for housing. Households with zero or negative income are assumed to have severe burdens, while households paying no cash rent are assumed to be without burdens. White, Black

and Asian/ other households are non-Hispanic. Hispanics may be of any race.

Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.

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White Black Hispanic Asian/All Other All Renter Households

Race/Ethnicity


Severely Cost Burdened Moderately Cost Burdened

COVID-19 and Housing Affordability

Renters Were More Likely to Lose Employment


Initial Unemployment Claims Rose More Rapidly in Early 2020 than During the Past Five US Recessions

Notes: Initial unemployment claims are seasonally adjusted. No recession has officially been declared for 2020. Data for 2020 show the cumulative number of claims over

a six-week period beginning March 8th.

Source: JCHS tabulations of US Bureau of Labor Statistics, Unemployment Insurance Weekly Claims Report; National Bureau of Economic Research, US Business Cycle

Expansions and Contractions.

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1216202428323640444852

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

1980 1981 1990 2001 2008 2020Year Recession Started

Cumulative Number of Initial Unemployment Claims (Millions)

Weeks Since Recession Start


Renter Households of Color Are More Likely to Have Lost Income as a Result of COVID-19

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Renters Homeowners All Households

Share of Households that Lost Employment Income Since Mid-March (Percent)

Hispanic Black Asian/All Other White TotalRace/Ethnicity of Respondent

Note: The HPS household weight is a pseudo-household weight created by dividing the given person weight in the HPS by the number of adults in the household. Weights

are used in survey research to make estimates derived from samples more representative of the population. White, Black and Asian/ other households are non-Hispanic.

Hispanics may be of any race.

Source: JHCS tabulations of US Census Bureau, Household Pulse Survey, Week 12.


Renter Households of Color Are Also More Likely to Expect Further Income Loss

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Renters Homeowners All Households

Share of Households that Expect to Lose Employment Income (Percent)

Hispanic Black Asian/All Other White TotalRace/Ethnicity of Respondent





Many Renters Reported Missing a Rent Payment or Worry About Next Month’s Rent


Renter Households Struggled to Pay Their Rent, Notably Black and Hispanic Renters





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Black Hispanic Asian/AllOther

White Total Black Hispanic Asian/AllOther

White Total

Share of Renters with Late or Deferred Payments (Percent)

Renters that Lost Employment IncomeAll Renters


Black and Hispanic Renter Households Have Low Confidence in Making Next Month’s Rent Payment





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Black Hispanic Asian/AllOther

White Total Black Hispanic Asian/AllOther

White Total

Share of Renters with Low Confidence in Making Next Month’s Rent (Percent)

Renters that Lost Employment IncomeAll Renters

But Many Renters Are Still Making Payments


Most Renters Living in Professionally Managed Apartments Have Paid Rent

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6th 13th 20th 27th End of Month

Share of Rent Payments Made in July (Percent)

2019 2020Year

Notes: Data cover over 11 million professionally managed apartment units across the country. Rent payment includes both full and partial payments.

Source: National Multifamily Housing Council, Rent Payment Tracker.

Day of Month

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6th 13th 20th 27th End of Month

Share of Rent Payments Made in August (Percent)

Day of Month


Households with At-Risk Wages Are More Common in Single-Family and Small Multifamily Rentals

Notes: At-risk wages include those in services, retail, recreation transportation and travel, and oil extraction.

Source: JCHS tabulations of US Census Bureau, 2018 American Community Survey 1-Year Estimates.

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Single-family 2–4 units 5–19 units 20–49 units 50 units or more All Rental Units

Structure Type

Share of Renter Households with At-Risk Wages (Percent)

Loss of Income Could Significantly Increase Housing Cost Burdens


An Estimated 9.3 Million Renter Households with At-Risk Wages Are Likely to Be Newly or More Severely Cost Burdened

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Newly Cost Burdened Cost Burden Worsened

Income (% AMI)

Renter Households (Millions)

Extremely Low Very Low Low Middle Above Median

Notes: The percent area median income categories are defined as follows: Extremely Low Income – at or below 30% AMI, Very Low Income – 31 to 50% AMI, Low Income – 51 to 80% AMI,

Middle Income – 81 to 100% AMI, Above Median Income – more than 100% AMI.

Source: JCHS tabulations of US Census Bureau American Community Survey, 2018.


Note: The percent area median income categories are defined as follows: Extremely Low Income – at or below 30% AMI, Very Low Income – 31 to 50% AMI, Low Income

– 51 to 80% AMI, Middle Income – 81 to 100% AMI, Above Median Income – more than 100% AMI. At-risk industries are those most likely to suffer job losses or a

reduction in hours due to social distancing measures as a result of COVID-19.

Source: JCHS tabulations of US Census Bureau, 2018 American Community Survey 1-Year Estimates.

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Extremely Low Very Low Low Middle Above Median Total

Existing Cost Burdens Cost Burdens Assuming Lost At-Risk Wages

Income (Percent of AMI)

Share of Renters with Cost Burdens (Percent)

The Loss of Wages in At-Risk Industries Would Push the Share of Renters with Cost Burdens to Well Above 50 Percent


Metros in the South and West Have High Shares of Renters with At-Risk Jobs and Severe Cost Burdens

Notes At-risk jobs are defined as those in retail, services, recreation, transportation and travel, and oil extraction. Households are considered severely cost burdened if they

spend more 50 percent of their income on housing.

Source: JCHS Tabulations of US Census Bureau, 2018 American Community Survey 1-Year Estimates.

Employment Uncertainty Underscores the Need for Rental Assistance


Total Monthly Assistance Needs for Renter Household with At-Risk Wages Could Reach $7.5 Billion

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Scenario 1:Federal & State

Unemployment Insurance

Scenario 2:State Unemployment Insurance

Scenario 3:No Unemployment Insurance

Monthly Rental Assistance Needed (Billions)

Extremely Low Very Low Low Middle Above MedianIncome (% AMI)

Notes: The percent area median income categories are defined as follows: Extremely Low Income – at or below 30% AMI, Very Low Income – 31 to 50% AMI, Low Income – 51 to 80% AMI,

Middle Income – 81 to 100% AMI, Above Median Income – more than 100% AMI.

Source: JCHS tabulations of US Census Bureau American Community Survey, 2018.

Affordability Isn’t the Only Concern During a Pandemic


Just Over a Third of Renter Households Have at Least One High-Proximity Worker

Notes: High-proximity jobs have a physical proximity index score of at least 75. White, black and Asian/other householders are non-Hispanic. Hispanic householders may be of any

race.

Source: JCHS tabulations of US Census Bureau, 2018 American Community Survey 1-year estimates and US Department of Labor, Physical Proximity Index.

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All Renter Households White Black Hispanic Asian/All Other

Share of Households with High-Proximity Worker (Percent)


Vulnerable Households with High-Proximity Workers are Disproportionately Headed by a Person of Color

Notes: Multigenerational households have at least one person age 65 or over and live with a child or grandchild. Overcrowded households have more than one person per room. High-

proximity jobs have a physical proximity index score of at least 75. Multigenerational and overcrowded household categories are not mutually exclusive. White, black and Asian/other

householders are non-Hispanic. Hispanic householders may be of any race.

Source: JCHS tabulations of US Census Bureau, 2018 American Community Survey 1-year estimates and US Department of Labor, Physical Proximity Index.

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Multigenerational with high-proximity worker Overcrowded with high-proximity worker All households


White Asian/All Other Black Hispanic

Potential Effect of COVID-19 on Rental Markets


Potential Effects on Rental Markets

May See:

• Cooling demand

• Diverging trends within broader market

• Some relief at top of market

• Increased competition for limited supply of

low-rent units

• Increased operating expenses

• Pressure on smaller landlords

• Lengthened construction timelines

Continued Uncertainties:

• Movement toward homeownership

• Effect of reduced unemployment insurance

• Extent and timing of the eviction crisis

• Changing preferences

COVID-19 Housing Resourcesjchs.harvard.edu/covid-19-resources

America’s Rental Housing 2020jchs.harvard.edu/americas-rental-housing-2020

the impact of covid-19 on renters and rental markets...notes: the percent area median income...

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