One in five LA County tenants paid rent late during at least one month between May and July, according to a joint report released today by UCLA and USC. Although the majority of Angelenos are paying on-time and in-full, the survey of more than 1,000 renter households found that 58 to 68 percent have suffered a loss of income since March 13th.
In order to make payments, renters are eating away at their savings, racking up credit card debt and taking out emergency loans. Of those who paid late or made partial payments during at least one month, 60 percent dipped into savings, while 40 percent turned to payday or emergency loans, which often come with high fees and interest rates. The use of credit cards to pay rent tripled among survey respondents compared to pre-pandemic levels.
Roughly 7 percent of respondents paid no rent at all in at least one month and 2 percent are now three months behind on their payments. While this might not seem like a sizeable share, that 2 percent equates to about 40,000 households who face serious financial challenges moving forward.
Most tenants burdened with partial, late or non-payment of rent were able to negotiate a payment plan with their landlord, however, upwards of 98,000 renter households have been threatened with eviction. The Los Angeles County Temporary Eviction Moratorium, which went into effect on March 4th, is scheduled to expire on September 30th unless an extension is granted.
Renter households earning less than $25,000 per year and Black and Hispanic households were disproportionately affected by late payment and nonpayment of rent. Having access to unemployment benefits significantly lessened the likelihood of outstanding rent payments among those surveyed.
“The evidence in sum suggests that renters in LA are confronted with an income crisis layered atop a housing crisis,” explains the report.
“In normal times rents in Los Angeles are high, and renters often struggle to pay their rents. But rent levels for the most part did not change during the COVID pandemic. What changed was renters’ ability to pay. It is the loss of income, sometimes through sickness but mostly due to shelter-in-place, that has been decisive.”
The authors of the report say the data suggests that renter assistance is needed to prevent widespread evictions and long-term financial consequences such as mounting credit card debt and wiped-out savings. Aiding struggling tenants will also help keep mom and pop landlords afloat throughout the COVID-19 pandemic, they note.
Earlier today, the California Senate passed Assembly Bill 3088, which would pause evictions statewide until January 31, 2021. It now heads to the Assembly for a final vote, which must be tallied before midnight when the current legislative session ends. If the measure fails to pass both bodies, evictions would resume in parts of the state without local moratoriums.