Renter Financial Distress Concentrated in High-Poverty Neighborhoods, Communities of Color

Date Published: 
January 25th, 2023

A new paper published by the Housing Crisis Research Collaborative found that renters living in communities of color, and in high-poverty, lower-income, and lower-rent neighborhoods were more likely to experience financial distress. The authors also found that emergency rental assistance (ERA) was similarly concentrated in these neighborhood types, indicating that ERA generally reached the neighborhoods with the greatest need. The analysis used restricted-access data from the US Census Bureau’s Household Pulse Survey.

According to the data, 23% of renters lost employment income in the month before they were surveyed between April 2021 and February 2022, while 15% fell behind on their rent. In higher-poverty neighborhoods, 19% of renters fell behind on their rent, compared with only 12% of renters in lower-poverty neighborhoods falling behind on rent.

Financial distress was more common in lower-income and lower-rent neighborhoods, and neighborhoods with higher shares of people of color. Fully 61% of households behind on their rent lived in communities of color (where at least 40% of the population was people of color) while just one-fifth lived in neighborhoods where the share of people of color was under 20%.

The authors also examined the extent to which ERA reached neighborhoods with the greatest need. Around two-fifths of ERA recipients lived in higher-poverty neighborhoods, while three-fifths lived in communities of color. While this is comparable to the concentration of renters behind on their rent, it’s important to note that ERA administration varied by state, and the ERA disproportionately targeted states with smaller populations.  


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