A report by the Joint Center for Housing Studies of Harvard University (JCHS), “The Geography of Renter Financial Distress and Housing Insecurity during the Pandemic,” examines the geographic distribution of renters facing financial distress and receiving emergency rental assistance (ERA) during the pandemic. Renters facing financial distress were more concentrated in high-poverty, low-income, low-rent, and more racially/ethnically diverse neighborhoods. ERA applicants and recipients were also more concentrated in these neighborhoods, suggesting that ERA generally reached neighborhoods with the greatest need.
Researchers pooled data from the U.S. Census Bureau’s Household Pulse Surveys conducted between mid-April 2021 and early February 2022 to identify patterns in financial distress and ERA disbursal across neighborhoods and neighborhood type. Financial distress was determined by indicators like loss of employment income and rental arrears, and ERA disbursal was measured by who applied for and who received emergency rental assistance. Researchers categorized neighborhood types by grouping neighborhoods into quartiles by poverty rates, median income, median rent, and share of people of color.
Researchers found that renters in neighborhoods with higher poverty rates, lower incomes, lower rents, and higher shares of people of color were more likely to have lost employment income and had rental arrears. Approximately 26.5% and 18.8% of households in neighborhoods with high poverty rates had lost employment income and had rental arrears, respectively, compared to 19.6% and 11.8% of households in neighborhoods with low poverty rates. Similar patterns emerged for renters in neighborhoods with lower incomes, lower rents, and higher shares of people of color. Renters in neighborhoods with higher shares of people of color were more likely to apply to ERA and be ERA recipients. However, ERA applicants in these neighborhoods were less likely to successfully receive ERA than applicants in predominantly white neighborhoods.
Disparities in financial distress by neighborhood type also generally held by region. The South had higher rates of income loss and rental arrears than other regions, and neighborhoods in the Northeast displayed a wider range in share of households behind on rent. Households with rental arrears were especially concentrated in high-poverty neighborhoods in the Northeast, where approximately 44.9% of households behind on rent lived in high-poverty neighborhoods. Households with rental arrears were also concentrated in neighborhoods with higher shares of people of color in the West, where 68.6% of households behind on rent lived in more diverse neighborhoods.
Previous research by JCHS (see Memo, 02/07/2022) found that renters with low incomes and renters of color were more likely to borrow from their social networks to meet household spending needs after experiencing a loss of employment income, potentially leaving their wider communities to bear the economic consequences. Renter financial distress is concentrated by neighborhood type, so economic spillover from households’ financial distress across social networks may also be geographically concentrated. The authors argue that policymakers must account for the concentration of households in high distress neighborhoods and ensure that policies provide broader assistance to these neighborhoods.
Read the report at: https://tinyurl.com/3xspdk75