Many LA Households Were Cutting Back on Basic Needs to Pay Rent Long before the Pandemic
How Do Renters Cope with Unaffordability? Household-Level Impacts of Rental Cost Burdens in Los Angeles
Jovanna Rosen, Sean Angst, Soledad De Gregorio, Gary Painter
- Publication Date:
The Los Angeles region has long faced a worsening housing affordability crisis, and the COVID-19 recession is only exacerbating its effects on renters. Much research has explored the impacts of increasing housing costs and rent burden across Los Angeles, but few studies examine how families are coping with unaffordability. A new study surveyed 800 renter households in South and Central Los Angeles to understand how rental affordability affects families’ decisions to spend on their basic needs.
To execute the study, researchers conducted an in-person, door-to-door survey of renter households in the Los Angeles Promise Zone in Central Los Angeles and the South Los Angeles Promise Zone. They chose these areas because they have high rates of poverty, large immigrant populations, a high proportion of rent-burdened residents (households that spent more than 30 percent of their income on rent and utilities), and evidence of gentrification. They conducted the surveys between January and October 2019 in Spanish and English and randomized the sample by block and address so they could generalize findings across neighborhoods and between immigrant and US-born respondents.
The average household surveyed had three household members living in a one- or two-bedroom apartment with one working adult, at least one foreign-born adult and one US-born adult, and one adult with a high school diploma or higher level of education. Forty-one percent of households had children younger than 18 years old, half had lived at their current address for fewer than five years, and their monthly median income was $2,600. In South Los Angeles, the researchers surveyed more Latinx and Black respondents, and in Central Los Angeles, they surveyed more white and Asian respondents. Across both areas, Latinx respondents comprised the largest racial or ethnic group surveyed.
The findings show renters were already cutting back on critical basic needs like food, health care, and education before the pandemic and underscore the need for policy solutions that address both renters’ urgent needs in this moment and the long-standing affordability challenges that have plagued the rental market for some time.
Housing cost burden
- Seventy-three percent of households were rent burdened. White and Asian households were less likely to be rent burdened than Latinx and Black households, and households surveyed in Spanish were more likely to be rent burdened than households surveyed in English. Households with lower levels of education and/or with fewer working adults were also more likely to be rent burdened.
- Forty-eight percent of households were severely rent burdened (they spent more than 50 percent of their income on rent and utilities). Black households were disproportionately likely to be severely rent burdened.
Changes to household spending
- Most households had cut back on basic needs or took on new debt over the past two years to afford rent, with rent-burdened households more likely to cut back than households who weren’t rent burdened. Sixty percent of households cut back on food; 45 percent cut back on clothing, entertainment, and family activities; about 30 percent reduced their transportation costs; 20 percent reduced their health expenses; and nearly the same share reduced education expenses. About 45 percent of households delayed a bill payment or took on additional debt to cover their expenses.
- Many cutbacks have become semipermanent shifts as opposed to temporary coping strategies. More than one-quarter of rent-burdened households who cut back on food, clothing, family and leisure, and/or took on additional bills or debt had been doing so for more than a year to pay rent.
- Household cutbacks were larger and more enduring in Central Los Angeles, where housing costs have been increasing more sharply and for longer than in South Los Angeles.
- There were no large differences in cutbacks across immigrant and US-born households. Immigrant and US-born households have similar rent-burden rates and make similar trade-off decisions, though they differ in income levels and housing consumption. US-born households report cutting expenses at a higher rate, and immigrant households tended to live in smaller units, earn less income, and pay lower rents.
- Cost-burdened and severely cost-burdened renters appear to be cutting back at similar rates. This suggests residents employ cut-back strategies as soon as they reach the rent-burden threshold, but after a certain threshold of rent relative to income, households cannot cut back any further.
Ability to weather an economic shock
- One in five respondents reported being unable to pay for an unexpected $400 expense, with rent-burdened households less likely to be able to pay.
- About 40 percent of households would have had to take on additional debt through a credit card, bank loan, or payday lender, and 28 percent would have needed to draw from multiple sources.
The authors suggest policymakers, researchers, and practitioners should extend their focus beyond promoting solutions to stop the current eviction crisis and address the enduring rental affordability crisis in Los Angeles by adopting a holistic suite of policy solutions, such as the following:
- halting evictions for nonpayment of rent during the pandemic
- expanding rental assistance until the emergency has ended
- boosting affordable-housing construction
- implementing long-term affordability strategies aimed at protecting renters, such as boosting wages and expanding the institutional resources available through vouchers and down payment and security deposit assistance
As this research demonstrates, the COVID-19 pandemic is compounding an already fragile and precarious situation for renters. By prioritizing and expanding relief to renter households, policymakers can secure their housing stability and free up essential resources for these families to reinvest in their health, nutrition, and education.