Why are tenants having such a hard time now

Why are tenants having such a hard time now

Darren Welch | iStock | Getty Images

The shutdown of federal and state relief measures puts millions of tenants at risk of financial hardship.

It’s a new warning from the Consumer Financial Protection Bureau, which found that the pandemic-era safety net has helped tenants across America maintain stability during months of historic unemployment and uncertainty.

Now those protections are running out: the national moratorium on evictions is over, some states still ban procedures, and the $ 45 billion in rent assistance allocated by Congress to deal with the crisis is painfully elusive. was slower than

According to the Centre’s budget and political priorities, around 10.7 million tenants are left behind on their rents.

The average loan in Maryland, where about 19% of tenants are in arrears, is over $ 4,500, according to data provided to CNBC by Sargo Ventures, a health and data-driven nonprofit. The typical balance in California, where 15% of renters are excluded, is closer to $ 5,200.

More from Personal Finance:

House Democrats plan to block IRAs from holding private capital and hedge funds
The rich could avoid taxes worth $ 163 billion every year
The stock market can fall. is it time to sell?

Diane Yantel, chief executive officer of the National Low Income Housing Coalition, said current tenant problems can be explained in large part by inequalities before the Covid pandemic.

In fact, nearly half of renters in the United States were burdened with costs in 2019, meaning that a third or more of their income goes towards their rent each month, according to the Coalition.

“We need to recognize where we were before the pandemic, which was in the midst of a severe housing affordability crisis,” Yentel said.

The CFPB report shows that financial conflicts were more common among tenants than among landlords before Covid.

Renters had an average credit score of 87 points and 106 points lower than owners. Homeowners are less likely to have student loans and car loans than renters.

Low-income workers, women, and people of color are also more likely to rent a home than they are.

“The past recession and depression have left behind all races and ethnicities of color and low-income communities as the economy as a whole recovers,” said CFPB Acting Director Dave Yugio. “We cannot repeat this story.”

Yantel said many renters won’t be able to pay their dues until they receive federal rent assistance.

“Even if they are now re-employed or have taken on a second or third job, many people will continue to struggle to pay their ongoing rental costs,” she said.

Meanwhile, tenants are still struggling to get help.

Of the $ 45 billion in rent assistance, less than $ 9 billion has been spent, although the funding was approved in stimulus packages passed in December and again in March.

Advocates blame the difficult deployment of funds on complicated applications and understaffing in the hundreds of organizations working to provide the money.

“The delay has been brutal,” said Daniel Rose, organizer of Housing Justice Now in Winston-Salem, North Carolina, who said he knew a tenant who submitted his application three months ago and who did not still has no answer. Was found.

“It is a form of psychological torture that awaits these bureaucrats to reconstitute their actions,” he said.

However, Rose was not surprised to hear about so many struggling tenants during the pandemic.

A 2018 study by the city found a shortage of more than 16,000 affordable units for low-income people. Rents have only increased since then, when the minimum wage in North Carolina is $ 7.25.

“You can’t afford accommodation in Winston-Salem,” Rose said.

.

LEAVE A REPLY

Please enter your comment!
Please enter your name here