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How renters and landlords are making payment plans, and how it won't be enough

By Lucas Munson, MHP Center for Housing Data

September 29, 2020

After six months of economic upheaval, renters and landlords alike are being forced to find unique solutions to the growing rental crisis. The CDC’s decision to suspend nonpayment evictions until December 31 (for individuals making < $99,000) will keep most renters housed until 2021. However, without a new federal relief package, the number of payments missed and debts owed will only pile up over the next three months. Importantly, racial disparities in income loss and lack of access to wealth mean that the impact is disproportionately felt by Black and Latino households. While the situation remains precarious, several surveys are providing insights into how renters and landlords are navigating the crisis.

So far, many renters have found various ways to make payments despite lost income. The Federal CARES Act, expanded unemployment benefits, and even the growing number of young adults returning home have helped supplement income shortages. While we don’t yet have good local data, a national survey from Avail found that over 40 percent of households are making payments by either pulling from emergency savings or borrowing from family members. However, reliance on family only sharpens the picture of racial disparity in housing, as Black households in Massachusetts have less access to familial wealth than White households. When combined with ballooning unemployment rates in majority-minority cities, the importance of continued federal support is difficult to overstate, especially regarding the disparate burdens the pandemic has placed on people depending on their racial or ethnic identity. Locally, we have already seen this play out as 42 percent of Black renters in Massachusetts said that they had little to no confidence in their ability to pay their August rent, according to estimates from the Census Household Pulse Survey. Only 14 percent of White renters voiced the same concern. 

With a moratorium on nonpayment evictions in place, smaller landlords with mortgages are also in jeopardy as rent collections diminish. Avail’s survey shows that more than one-third of landlords rely on rental income for a majority of their income. After 32 percent of households entered August with unpaid housing bills, the gap between what landlords expect to earn and what they are receiving is likely to widen as the crisis continues into the coming months. According to the Urban Institute's analysis of the survey, landlords most at risk of missing mortgage payments are Black and Hispanic, who also tend to own fewer properties and have lower incomes.

Because both renters and landlords have reason to be concerned about payments not made (for different reasons), there is some incentive to reach agreements. Landlords in Boston and surrounding communities may feel additional pressure to renegotiate, as we are experiencing a rare power shift in the rental market toward renters in some inner core neighborhoods. Faced with a decreased likelihood of attracting new tenants, some landlords are making efforts to hang on to the tenants they have, even if they have missed a payment.

Thus far, we are seeing a willingness to negotiate play out in roughly half of all situations (see below). Payment deferrals were offered by 38 percent of landlords in the Avail survey, but 18 percent of renters who requested a deferral or payment plan were denied. Additionally, an Apartment List survey found that two-thirds of renters with overdue payments requested a negotiation with their landlord, and 27 percent of themwere denied. While each individual circumstance is different, there is cause for concern; renters who are being denied renegotiations are likely to be unable to catch up on payments by the end of the eviction moratorium. It is worth noting that both of these surveys were conducted before the new CDC eviction moratorium, which may compel some landlords to reconsider negotiating as they are “stuck” with a tenant for the next few months.

Though rent negotiations may solve some individual instances of payment arears, this emergency cannot be solved by renters and landlords alone. According to MAPC's most recent estimates, Massachusetts renters will need at least $57 million/month in rental assistance to get through these next few months. That level of rental support requires new and expanded initiatives at the local, state and national levels. Without additional support, widespread displacement will become increasingly likely as winter closes in.

Read more briefs from the COVID Community Data Lab