With Congress at loggerheads on an extension of pandemic-related unemployment benefits, analysts said that housing markets could take a hit if authorization for the $600 per week payments is ended as of July 31.
Currently there is a proposal by the Senate to reduce benefits to $200 per week temporarily until a permanent plan of offering 70% of a person’s previous earnings can be implemented. The House of Representatives passed a measure earlier this year extending the $600 weekly benefit to the end of 2020.
According to a new report from Zillow research, 30 million persons could see their pandemic benefits come to an end if no extension is approved and signed into law.
The percentage of renter households that include persons whose work requires high rates of face-to-face contact with others could face a more-than-tenfold rise in experiencing severe housing burdens, said the report’s author, economist Alexandra Lee.
“Losing that $600 per week and only receiving state unemployment benefits means that the share of households facing severe housing burden will skyrocket — from about 3% of impacted renter households to 41%,” Lee wrote. “Without immediate resumption of income, expanded FPUC benefits, or some form of direct rental assistance, many high contact workers will find it increasingly hard to make rent payments.”
More than 12% of renter households have already missed payments this year, up from nearly 10% in 2019, the report said. That number has been tamped down by the Federal Pandemic Unemployment Compensation program, which provides a supplemental $600 per week for persons who have lost jobs during the COVID-19 outbreak.
The Zillow report noted particular danger for the 28 percent of renter households that it included workers it classified as “contact intensive,” such as healthcare professionals and other frontline workers who experience a high degree of face-to-face and close physical interaction. Those workers, the report said, are vulnerable not only to job loss but also to falling ill.
Racial disparities could also worsen if pandemic unemployment benefits aren’t extended, the report said, as Black renters are more likely to depend on income from jobs that require face-to-face or physical contact.
Zillow said that Black renters are more vulnerable to widespread income loss leading to housing insecurity. That’s because “contact-intensive” workers contribute 72% of household income in Black households, compared to 53% in white households.
“The boost to unemployment benefits from the federal government has played a crucial role in keeping renters afloat, and has helped insulate the rental market as a whole,” said Zillow economist Jeff Tucker in a press statement. “The rate of missed rental payments hasn’t risen nearly as much as expected, and eviction moratoriums are keeping many of those unable to make payments in their homes. But those temporary measures are mostly expiring soon, so without some form of extension to the unemployment benefits boost or eviction moratoriums, we could see a widespread eviction crisis as summer turns to fall.”
Early warning signs have already been ascertained in cities where eviction moratoriums have been lifted. According to a statement from Zillow, June saw evictions in Milwaukee jump by 17% after April and May, when a backlog developed as evictions were halted.
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July 28, 2020 at 05:40PM
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Eviction Crisis Could Follow Failure to Extend Pandemic Unemployment Benefits - GlobeSt.com
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