November 08, 2023
Following the aftermath of the pandemic, many non-white renters across America increasingly struggled to pay their rents on time. In 2022, according to surveys conducted by the Federal Reserve, 17 percent of all renters reported that they had fallen behind on their rent in the past year, which was equal to the share in 2021. However, non-white renters increasingly fell behind on their rents from 2021 to 2022. Black renters saw a glaring 5 percentage point increase to 26 percent. The Black share was more than twice the white share in 2022. White households’ share actually went down by one percentage point to 12 percent. The share of Hispanic renters missing rent rose to 24 percent, and Asian Americans experienced an increase of one percentage point to 9 percent. Forty-five percent of renters who reported being behind on their rent payments in 2022 still owed money for back rent at a median amount of $1,200 at the time that they took the survey.
One plausible explanation for why Black renters saw the biggest increase in their share of being behind on rent in 2022 can be correlated to a loss of savings for renters of color coming out of the pandemic. The economic toll of the pandemic resulted in 31 percent of Black households depleting their entire savings, and among Hispanic families more than a quarter of households lost their savings. As Black households try to bounce back and regain financial security, they are met with significant burdens as renters’ incomes have not caught up to rising rental-housing costs. Renters are considered “cost-burdened” if they spend more than 30 percent of their income on rental costs. In 2021 a record number of renters were cost-burdened. The data indicates that low-income Black households are disproportionately cost-burdened by soaring rental prices.
The federal government can and should be taking more action to address this problem. Foremost, there needs to be a focus on increasing low- to middle-class worker’s incomes. Considering the fact that women, Black, and Hispanic workers are overrepresented among minimum wage earners, increasing the federal minimum wage to $15 an hour is a vital place to start. Also, increasing unionization rates should be a priority as doing so is proven to raise wages, especially for Black and Hispanic workers. By supporting the Pro Act, lawmakers can ensure workers are protected to bargain collectively with their employers and have the freedom to exercise their right to organize. Reinstating the expansion of the Child Tax Credit is another policy that should be enacted to reduce poverty and raise wages. Finally, there needs to be a focus on reducing rental costs by encouraging the development of more affordable social housing. Currently, the U.S. has a shortage of 7.3 million rental homes that are affordable and available to low-income renters, which is leading to a national housing crisis. Prosperity can only be ensured if one has a roof over their head. It is time for policymakers to take action to make housing a fundamental American right, instead of an elusive dream.