In the U.S., there are an estimated 50 million people living in a renter household most likely experiencing immediate job or income losses due to the pandemic economy. For a period of time there were state bans on evictions, but this only provided a temporary reprieve. Part of the problem is due to the high proportion of their income that renters spend on accommodation, which stands are above 30 percent of earnings (a figure in excess of a common accepted affordability ‘rule’).
The matter is sufficiently pressing for Human Rights Watch to make a call for more support for renters in November 2020, given the number of evictions and the issues of affordability. More than $21.5 billion in past-due rent is looming over many U.S. citizens, who are struggling to make ends meet.
To assess the scale and extent of the situation, The Ascent, a Motley Fool company, took U.S. government data to analyze all 50 states, as well as Washington D.C. and Puerto Rico. The assessment was based on two factors. The first was rent affordability; the second was unemployment.
This analysis identified 11 states and one territory where unemployment rates were very high and where renters pay a large percentage of their income for housing.
The top twelve locations where renters are the most at risk of housing instability were found to be:
1. Puerto Rico
3. New York (tie)
3. Connecticut (tie)
5. Rhode Island (tie)
5. Mississippi (tie)
6. Louisiana
7. California
8. Nevada
9. Hawaii
10. Michigan
12. New Jersey (tie)
12. Massachusetts (tie)
The data was assessed on the basis of calculating the percentage of the median renter’s income that rent consumes. The reason why Puerto Rico comes top is that although the typical monthly rent is nor ‘high’ in terms of the average, at $484 per month, paying this out accounts for 50 percent of the typical renter’s monthly income, which is $979. The data also took into account the unemployment rate.
One reason for the more precarious position faced by renters is because some homeowners qualify for a home equity loan or an alternative cash-out refinance (after a period of unemployment). This social security measure is not open to renters.
