Unpaid Rent May Be as High as $34 Billion by End of the Year

A report from Stout, “Analysis of Current and Expected Rental Shortfall and Potential Evictions in the U.S.,” finds that between 9.7 and 14.2 million households, accounting for 23.3 to 34 million individual renters, are currently unable to pay rent. The report, prepared for the National Council of State Housing Agencies (NHSHA), estimates that by January 2021, unpaid rents by renters unable to pay could total as much as $25.1 to $34.4 billion. Though a national eviction moratorium is in place through December 31, Stout notes that the slow economic recovery could lead to growing debt accumulation and risk of eviction, particularly among low-income households.

Stout’s estimates were generated using data from two primary sources: 1) the U.S. Census Bureau’s Household Pulse Survey (HPS) and 2) income and rent data from the 2019 American Community Survey.

Stout estimates that as of September, the country’s rent shortfall is between $12.2 and $16.7 billion. By January 2021, however, this figure may balloon to as high as $34.3 billion. This estimate accounts for the fact that some renters will continue to make partial payments and does not include late fees or other charges. Stout estimates the income group with the highest amount of debt shortfall is those making between $50,000 and $74,999 annually.

Stout predicts that by January, up to 8.4 million households comprised of 20.1 individual renters could have an eviction filed against them. The authors note, however, that the actual number of eviction filings will be largely dependent on renter awareness of the CDC’s eviction moratorium, as well as court enforcement. For example, not all renters are aware of the moratorium, and may not complete the required affidavit. Courts are also handling the moratorium differently. Maryland District Court, for example, will continue hearing eviction cases even if a renter has signed the affidavit, and will automatically enter a judgement as soon as the moratorium expires.

The analysis found that low-income households are at a significantly higher risk of eviction, with those making less than $50,000 accounting for 71% of estimated eviction filings. By January 2021, an estimated 2.7 million evictions will be filed against households with annual incomes of less than $20,000, and an estimated 3.3 million will be filed against those with incomes between $20,000 and $49,999.

The report acknowledges that the speed and patterns of economic recovery will greatly influence whether renters will be able to pay their rent and avoid eviction. Given the current slow pace of recovery, it is likely that rent burden, debt accumulation, and risk of eviction will continue to plague low-income renters past January 2021.

The report can be found at: https://bit.ly/3n5LZ3G