COST-BURDENED RENTERS ARE CONCENTRATED IN SPECIFIC NEIGHBORHOODS
The foreclosure crisis of 2007 to 2009 illustrated the social and economic costs associated with spatially concentrated housing insecurity. Homes that underwent foreclosure caused property values of nearby homes to decline, leading to additional foreclosures, vacancies, and blight in surrounding neighborhoods. While there is not equivalent research on the community impacts of spatially concentrated evictions, it is likely that large-scale displacement of families within certain neighborhoods will create greater demand for social services and philanthropic support in those parts of the District. Mapping the rates of severely cost-burdened renters in Washington, D.C. shows that Wards 7 and 8 have the highest concentrations of housing-insecure renters, with the lowest concentrations in Wards 3 and 5.
HOW MUCH WOULD IT COST TO HELP COST-BURDENED RENTERS STAY AFLOAT?
Policymakers around the country are debating how best to support households and communities during the economic shutdown. One challenge to allocating funding for rental assistance is the high degree of uncertainty: How many households are unable to pay their rent, and for how long?
To develop rough cost estimates, we combine two Census Bureau data sets. In addition to the ACS-IPUMS data presented so far, we draw on the Household Pulse Survey, which provides weekly updates on how many renters report not paying their current month’s rent, and their confidence at being able to make the next month’s payment.
In the most recent release, corresponding to the week of July 2 to July 7, 20% of renter households in the District said they had no or slight confidence that they would be able to pay their rent next month. We multiplied this percentage by the number of cost-burdened renters and the median monthly rent for each renter group in order to estimate the amount of replacement rent needed.
Under these assumptions, it would cost nearly $5.2 million to cover one month of rent for the group of renters most likely to experience displacement (or assuming that eligibility for rental assistance was set based on a pre-pandemic income of $20,000). For context, the District’s Fiscal Year 2021 draft budget currently allocates about $14 million for the Emergency Rental Assistance Program over the next year—equivalent to about three months of replacement rent. The District’s 2020 budget included about $840 million for a range of housing and homelessness-prevention programs.
Expanding rental assistance to cover households with pre-pandemic income up to $40,000 would increase the budget considerably. Analysts can make a range of credible assumptions for any of the inputs into these estimates; this is intended only as a starting point.
URGENT NEED, BUT NO EASY OPTIONS
The COVID-19 pandemic has already created unprecedented economic distress in the District and across the country. Low-income households had little financial cushion before the crisis; finding the resources to pay for rent, food, and other necessities after several months of reduced economic activity is nearly impossible for many. The prospect of widespread evictions threatens the health and safety of households and communities.
State and local policymakers around the country are caught between shrinking revenues and increased demand for public services—a dilemma without good options. Only the federal government has the financial and institutional capacity to support households and communities during a prolonged recession, yet the prospects for another round of federal stimulus are uncertain. If Congress does not ride to the rescue soon, it will be up to local policymakers like those in the District to decide what they are able and willing to do for their most vulnerable residents.