COVID-19 Housing Crisis: The Worst is Yet to Come
This is the third publication of the COVID Data Analysis series by NYC Opportunity’s Poverty Research Team. This series will explore the US Census Bureau’s Household Pulse Data to help assess COVID-19’s impact as the pandemic evolves.
With stubbornly high levels of unemployment and widespread pay cuts in the region, New York City faces an unprecedented housing crisis. NYC Opportunity’s analysis of the U.S. Census Bureau’s Household Pulse data finds that many New Yorkers are facing housing insecurity and amassing millions, if not billions, of dollars in rent due. The current freeze on evictions expires in January 2021. Without further support measures, renters in particular will face severe debt levels and evictions.
Persistent Housing Insecurity
Although employment picked up as the city began to reopen, many New Yorkers remained behind on their rent and mortgage payments. Across 12 weeks of data pre- and post-opening, spanning from April 23rd to July 21st, 26% of renters had not paid last month’s rent, and 20% of mortgagors — those who own their home through a mortgage — either deferred or had not made last month’s payment (Fig.1A).
New Yorkers weren’t any more optimistic about their future payment ability: 39% of renters and 21% of mortgagors had little to no confidence in their ability to make next month’s payment, or had already planned to defer (Fig. 1B).
Strikingly, the divide between renters and mortgagors grew over time (Fig. 2). In pre-opening weeks, renters were one percentage point more likely than mortgagors to have missed last month’s payment or deferred. But as the city reopened, this difference grew. By the last reopening period, 31% of renters had missed last month’s payment — 14 percentage points higher than mortgagors.
The disparity between renters and mortgagors shows how the pandemic has magnified existing inequality. In general, homeowners have more financial resources than renters, as well as more sustainable options for managing back-payments. Consequently, back payments accrued during the pandemic will inherently place more burden on renters, though lower-income homeowners are also at risk.
Housing Insecurity Intensifies Inequality
The pandemic compounded financial difficulties for New Yorkers who were already struggling pre-COVID. Survey respondents with more financial challenges were more likely to be behind on housing payments and had the least confidence in their future payment ability.
Low-income households in particular experienced severe housing insecurity. Across 12 weeks pre- and post-opening, 32% of those who earned less than $50,000 a year were behind on last month’s payment (Fig. 3), and 44% — nearly half — had little to no confidence in their payment ability for next month or planned to defer (Fig. 4).
Individuals who lost their job or experienced a loss of employment income in their household were also more likely to have missed their housing payment: 24% of those in both groups had not paid last month’s rent or mortgage payment (Fig. 3). Similarly, they had little confidence in their future payment ability: 36% of individuals who recently lost employment and 32% of those who lost wages since March had little to no confidence in making next month’s payment or planned to defer (Fig. 4).
The pandemic disproportionally impacted Hispanic and Black respondents, two groups who have historically faced housing insecurity and disenfranchisement. Relative to White respondents, Black and Hispanic respondents were higher in non-payment and lower in confidence. Across pre- and post-opening periods, 28% of Black respondents and 19% of Hispanic respondents missed last month’s rent or mortgage payment (Fig. 3); 28% of Black respondents and 38% of Hispanic respondents had little to no confidence in their future payment ability (Fig. 4).
Due to small sample sizes and missing data, the results for non-White respondents are less precise than those of larger demographic subgroups such as White, Non-Hispanic respondents. However, other economic and housing research clearly indicates that Black and Hispanic individuals face disproportionate housing challenges, both before and as a result of the pandemic.
Protections are in Place, but Leave Many Vulnerable
A patchwork of policies currently protects some New Yorkers from the immediate threat of eviction (see Eviction Timeline in box). Under Governor Andrew Cuomo’s Executive Order 202.66, evictions cannot be enforced against tenants who lost income during the pandemic. After this protection expires on January 1, 2021, some tenants will remain partially protected under the Safe Harbor Act (SHA). Under the SHA, courts cannot uphold evictions based on missed payments that accrued during the “COVID period,” which began March 7 and continues until all COVID-related restrictions are lifted in a tenant’s area.
But while the Executive Order and SHA prohibit the enforcement of evictions against tenants under financial hardship, neither policy stops landlords from filing eviction petitions. If a tenant receives a notice of eviction, even for non-payment accrued during the COVID period, the tenant must prove financial hardship in court with evidence like paystubs or other proof of income loss during the pandemic. This process disadvantages tenants with less accessible income documentation, like undocumented workers or those in the gig economy. And while tenants in New York City have access to counsel, economically disadvantaged tenants face further challenges. Those without reliable internet access or affordable data plans may not have the option to attend their eviction hearings remotely. Instead, they will have to physically go to court, possibly putting themselves and their family at risk.
Finally, none of the existing protections address the biggest challenge for renters — back-payments. Any tenant who missed rent for any reason still owes those accrued payments, including tenants covered by the SHA. Across New York State, renters may owe as much as 3.4 billion dollars in back payments by January 2021.
Without swift action by the government, these back payments threaten to devastate New York City households and to compound inequality. Lower-income tenants, who are more likely to be rent-burdened, will have to manage both rent and back payments — all while contending with wage reductions, childcare challenges, and possible eviction. Subsidy programs like the COVID Rent Relief program keep financially vulnerable households out of debt and in their homes by helping them repay their back payments. However, this program only helped with payments from April to July and, as of October 28, had only granted 40 million dollars in relief — a fraction of the amount New Yorkers may owe.
Crisis Requires Action
Our analysis of COVID data finds that between April and July, one in four tenants in the region were behind on rent, and nearly two in five tenants had little to no confidence in their ability to make next month’s rent payment. The high level of housing insecurity among renters suggests an even greater housing crisis to come, with a potential surge of evictions after the Executive Order expires in January 2021. Without swift action across state and federal government, financially vulnerable New Yorkers will bear the brunt of this devastation for years to come.
Resources for Tenants and Homeowners:
- If you received a notice of eviction and need assistance, call 311 and ask for the tenant help line or use the Tenant Resource Portal
- Information on NYC’s Homebase Program to prevent homelessness
- More information and resources for NYC tenants (AccessNYC)
- Information on legal services for tenants in NYC
- NYC’s One Shot Deal Emergency Assistance
- New York Attorney General’s resources for homeowners
- New York State Department of Financial Services resources for homeowners
THE NYC OPPORTUNITY COVID DATA ANALYSIS SERIES
This series will continue to explore the U.S. Census Bureau’s Household Pulse data. In the current environment of persistently high unemployment, widespread income loss, and the absence of comprehensive stimulus benefits, it is important to monitor timely, detailed data. The Pulse data is one important tool that can help us to assess COVID-19’s impact as the pandemic evolves.
Previous blog posts in this series have examined the pandemic’s economic impact and recovery trends. For more information on the Pulse data, including future releases, and NYC Opportunity’s use of the data see the NYCOpportunity website.
This publication of the COVID Data Analysis was written by Anne Hill (AHill1@mofellow.nyc.gov), a fellow on NYC Opportunity’s Poverty Research team.
The Poverty Research Team at NYC Opportunity is responsible for the development of the NYCgov Poverty Measure. The alternative NYC poverty measure, in comparison to the official U.S. measure of poverty.
The work has received nationwide attention and contributed to the development of the Federal Supplemental Poverty Measure.
