Even before the growing public health and economic crises, the shortage of affordable and available homes was forcing nearly eight million extremely low-income households to spend more than half of their incomes on rent. Many were just one financial shock away from facing housing insecurity.
That financial shock is here. Over the span of nine weeks from March to May, more than 38 million Americans filed jobless claims. By comparison, 4.5 million jobs were lost during the worst six months of the Great Recession, between November 2008 and April 2009, according to the Federal Reserve Bank of St. Louis. While there is some uncertainty about the severity and length of this current economic crisis, this downturn will be massive and will put already struggling low-income renters into an even more unstable position.
"While there is some uncertainty about the severity and length of this current economic crisis, this downturn will be massive and will put already struggling low-income renters into an even more unstable position."
NLIHC’s 2020 Gap report finds that 37% of extremely low-income renter households—more than four million households—are of working age and in the labor force. Many of these households have jobs in retail sales, in restaurants and bars, and in personal care and service. It was already difficult to make ends meet in many of these jobs prior to the pandemic. Layoffs caused by the public health and economic crisis will have devastating impacts; the National Restaurant Association anticipates losses of five to seven million jobs in the coming months for the restaurant industry alone.
Prior to COVID-19, nearly 92% of the four million working-age non-disabled renter households in the labor force with extremely low incomes were housing cost-burdened and 76% were severely cost-burdened – spending more than half of their incomes on housing. When these low-income households lose their jobs, paying the rent and staying in their homes becomes virtually impossible. During the Great Recession, the number of families experiencing homelessness climbed while the number of extremely low-income and very low-income households who were severely housing cost-burdened increased by 1.3 million. We can expect the current downturn will have much worse effects.
With coronavirus, many low-income, hourly wage workers are seeing job layoffs or reduced wages because they have become sick, need to care for a family member, or their employer cut back their hours. Even temporary declines in income and unreimbursed medical bills can quickly send the lowest-income households down the spiral of housing instability, eviction, and even homelessness. To prevent massive housing instability and homelessness, Congress needs to provide rent relief to millions of renters on the verge of losing their homes. The $100 billion for rental assistance in the recently introduced “Emergency Rental Assistance and Rental Market Stabilization Act” is what will be required, according to NLIHC estimates. This level of rent relief was included in the “Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act” that passed the House of Representatives on May 15. It is now up to the Senate to ensure this critically important emergency rental assistance is included in the next coronavirus response package.