Unsurprisingly, I've gotten some pushback about my relatively rosy view of the rental market. Naturally I'd like to test this with some good historical data, but unfortunately there's very little available. The best I can do is to make use of the Household Pulse survey that the Census Bureau started last year in order to track households during the pandemic. Two of the questions for renters go all the way back to April 2020, so I chose those to look at:
The line in green is the percentage of renters who said they had "no" or "slight" confidence in their ability to make next month's rent. The line in purple is the percentage of renters who said they were currently behind on rent.
It would be nice to have pre-pandemic figures to compare these to, but we don't. However, the April figures are very early in the pandemic and probably not much affected by it. I can only guess about this, but my guess is that the April figures are pretty close to those from before the pandemic.
In any case, both lines have been going down ever since the pandemic started. This is almost certainly due to the trillions of dollars in assistance that went directly to everyone (checks) or everyone who lost a job (expanded UI benefits). And that assistance worked. There's really no evidence that renters today are in greater trouble than they've ever been.
Even though the April figures are early, I would hazard a guess that most of the job losses that were incurred early in the crisis had happened by then. My guess is that it is elevated by a lot, even though the pandemic UI relief was in effect. This is mostly because state labor departments had collapsed under the weight of all the unemployment claims and administering the new UI programs.
Yep, this is what I think also. In the most populous regions of the country, lockdowns (and therefore job losses) hit in mid-March. So several weeks later, by the time this April data shows up, the expected spike from those is probably already baked in.
Yes, employment had hit bottom by April:
https://fred.stlouisfed.org/series/PAYEMS
Kevin should have looked this up - no need to guess. It would have been pretty clear what was going to happen by the middle of February - all sorts of things had happened by then.
"There's really no evidence that renters today are in greater trouble than they've ever been."
It's okay for nearly 30% of renters having low confidence in making next month's rent. That's just what life is like in the richest country on earth. Nothing to see here folks.
The rent is too damned high has plenty of adherents.
However the increase in worker income will help if we don't see major rent increases.
Exactly
Data-driven KD is optimistic because he doesn't see a negative trend, nevermind that the starting point of the trendline represents tens of millions of people in desperation
Demographics play a role too:
https://www.statista.com/topics/4465/rental-market-in-the-us/
If April were reflecting the normal market I'd say that something is seriously wrong with the whole set up. 15% of renters in arrears. 30% not certain they can pay next month. I sincerely hope that this is not business as usual.
That purple line looks pretty flat over time to me, and the green one only just barely goes down.
There was almost certainly a spike in the purple line (or would be) prior to April 2020. Lockdowns and job losses in NY, CA, and the rest of the most populous areas of the country began in mid-March or earlier.
Going further with some envelope arithmetic:
There are 122.8M households in the US.
There are about 43M renter households in the US.
If roughly 13% of them are behind on rent, that's over 5.6M households who can plausibly be filed against for eviction.
If even only 1/4 of those would be evicted (from a hazy memory from work - I work in homeless services and subsidized housing - IIRC roughly 75-80% of those behind on rent either move out of the unit without being Officially Evicted or somehow make it work), that's still 1.4M evictions.
There are roughly 1M evictions in the US every year in normal times (per Desmond).
The 1.4M potentially pending evictions is 40% higher than the YEARLY TOTAL of evictions.
I'm sorry, but that can't be called anything except a tsunami.
Sure it doesn't look too bad to Kevin but it's actually the same as it ever was that's really, really bad, there's a ton of evictions that happen off the books so they never show up in the stats, where the landlord gets tenants to "voluntarily" leave.
Jimmy McMillan III was right back then and even more right today:
https://www.youtube.com/watch?v=Gg5SwyTvAHw
If it’s the same, that is clearly a problem but also clearly a problem that is a totally different type from the pandemic related effects and will require some more permanent solutions rather than a temporary eviction moratorium.
Yes, I completely agree. The moratorium was a stopgap to get us across the shutdowns and recovery. If we had a functioning government we would have had a better rental support program in place already before the pandemic even happened so we would not have had to reinvent the wheel all of a sudden. It isn't fair to mom and pop landlords to leave them holding the bag.
My original point though was that Kevin from his protected perch does not realize this, he thinks all is well now. Well it wasn't and it still isn't.
Kevin, the narrative will not be ignored…
If we are taking such surveys at face value, what to make of: https://www.cnbc.com/amp/2021/08/13/consumer-sentiment-measure-falls-to-pandemic-era-low-sees-one-of-largest-drops-on-record.html
https://www.nakedcapitalism.com/2021/08/close-to-50-of-us-workers-cant-afford-to-rent-one-bedroom-housing.html is worth some consideration in contrast.
I suspect shared housing is why the low confidence number is as low as it is.
How many people could ever afford a place just for themselves, as opposed to living with one or more roommates? I don't think that's a new situation.
Precarity is the norm in the US. In 2018, surveys showed that about 40% of Americans would not be able to come up with $400 for an emergency expense. Considering that $400 isn't even enough to cover a single visit to an ER (that's if you have insurance--God help you if you don't), it means that many Americans live persistently on the brink of disaster.
Thank you, neoliberals. /s
Anedocatily, rural America is arguably in a more serious crisios in regards to affordable housing than the urban population.
(I am speaking of the roughly 20% of the population that is considered, non-urban by the BLS et al.
For modest income workers, it is particularly acute. Often the option of sharing housing with others is very limited.
Barring massive, and I do mean massive, changes in how we deal with one of the three basic necessities (food, houssing, clothing), it's going to be the debilitating disease of our social capital.