By Jeff Collins
Joint UCLA-USC study finds "troubling proportions of tenants" are unable to pay rent, leading to increased debt, depression and anxiety.
The notion that renters are using the pandemic as an excuse to take a rent holiday is a myth, a joint study by UCLA and USC released Monday, Aug. 31, found.
Landlords have complained since the start of the pandemic that tenants would refuse to pay rent if they weren’t going to get evicted.
But the new study — a deep dive into how renters are handling rent and finances during the health crisis — found that 95% of households without a job loss or that hadn’t contracted COVID-19 say they paid their rent.
“People are really trying to pay their rents,” said study lead author Michael Manville, a UCLA associate professor of urban planning. “What we’re not seeing is a whole lot of opportunistic people not paying their rent.”
Researchers at the UCLA Lewis Center for Regional Policy Studies and the USC Lusk Center for Real Estate produced the 82-page report by analyzing U.S. Census data and conducting their own survey of 1,000 Los Angeles County renter households in July.
The report surfaced just as California lawmakers are set to vote on a plan extending a statewide eviction moratorium through January. The bill, a compromise between tenant and landlord advocates — must be approved Monday by two-thirds of both houses of the Legislature to keep an existing moratorium from expiring on Tuesday, Sept. 1.
One provision in the proposed moratorium is that high-income tenants who don’t pay rent would have to provide documentation of financial hardship to avoid eviction. Middle- and low-income renters merely would need to provide a “declaration of hardship,” but not documentation.
But the UCLA/USC study shows very few of the struggling tenants are upper-income renters, Manville said. The income provision, he said, “seems like a distraction.”
The study found also that about 98,000 L.A. County households have been threatened with eviction. An additional 40,000 report their landlord already began eviction proceedings against them.
In addition, the study found:
- Twenty-two percent of Los Angeles County tenants paid their rent late at least once from April to July.
- About 7% missed at least one full payment between May and July. About 2% of renters — or nearly 40,000 households — are three months behind on rent.
- Low-income and minority households are most likely to be missing rent or paying late.
- Lost work or contracting the virus are “the strongest and most consistent” predictors of renter distress. Between 58 and 68 percent of tenant households have lost income since March 13.
“We find that troubling proportions of tenants are unable to pay rent, in part or in full,” the report said. “This nonpayment puts those tenants at risk of eviction. ... Renters are also suffering disproportionately from mental health problems and food insufficiency.”
Meanwhile, debts are piling up. Many renters are dipping into savings or relying on credit cards, loans from family and friends, and even payday and other emergency loans to cover their expenses, the study found.
The study showed one-third of households with problems paying rent rely on credit card debt and 40% used emergency payday loans. Over 60 percent used savings to make their rent.
The study also found a great disparity between homeowners and renters. Renters are more likely than homeowners to have lost work or income during the pandemic. And because of their lower incomes and greater insecurity, unemployed renters are faring worse than homeowners in a similar position.
“If you own your home, it becomes a safety net for you. You can rent out rooms. You get tax advantages. You can sell the home,” Manville said. “None of that’s true for renters. You don’t have an asset. You don’t have rent protections. ... This is a very vulnerable group.”
On the other hand, government assistance has helped tenants keep up with their rent. For example, the study found tenants collecting unemployment insurance were 39% less likely to miss rent payments.
“Just some direct assistance to renters who need it will head off some of those problems that will come back to haunt us down the road,” Manville said. Getting cash into their hands “will go a long way to heading off suffering.”
The original article can be found here.