Having a Job Isn’t Enough To Avoid Rental Debt

Even as the economy recovers and the unemployment rate declines, millions of people with jobs are scrambling to pay off rental debts before the eviction bans end.

Posted on August 11, 2021, at 9:33 a.m. ET

Meg Hernandez, a 32-year-old resident of Minnesota, started having trouble breathing in December, three months after testing positive for the coronavirus. Her doctor diagnosed her with long-haul COVID. She went on unpaid sick leave for about six months, wiping out her paycheck from her job building industrial humidification units.

Her financial obligations then began to pile on. Though she had no income, she couldn’t collect unemployment benefits because she remained with her company in order to claim short-term disability insurance, but that only covered part of her normal salary and ended in March. Her application for long-term disability was denied. She depleted her savings as rent, medical, and credit card bills added up. Soon debt collectors were calling.

In June, when she returned to her job once again, her doctor recommended she cut back to just 20 to 24 hours per week because of her ongoing fatigue. She applied for emergency rental assistance but is still waiting to hear back. By August, Hernandez was nearly seven months behind on rent, a debt of about $4,900.

“I get up at 3:30 in the morning to go to work,” she said. “There are some days that I’m just exhausted as soon as I wake up, and it doesn’t go away.”

Courtesy of Meg Hernandez

Meg Hernandez, who was diagnosed with long-haul COVID, is still waiting to hear back about emergency rental assistance.

Hernandez is one of the millions of people carrying rental debt and facing the prospect of eviction when the moratorium ends even though they have jobs. About half of people who are behind on rent are employed, according to Census data analyzed by National Equity Atlas, a data tool produced by PolicyLink and the USC Equity Research Institute, which estimates that tenants across the country have accumulated around $21 billion in rental debt during the pandemic. Though the CDC last week extended its eviction ban to Oct. 3, giving renters more time to access $46 billion allocated for emergency rental assistance, long-term solutions for tenants behind on payments remain uncertain. Rental debt grows with each month, the real estate industry has challenged the legality of the eviction ban, and only 6.5% of the federal funds available had reached renters by the start of the summer due to lack of outreach and awareness about the program, red tape in the application process, and technical issues.

Even as businesses and the stock market recover, people who haven’t secured enough work hours or livable wages have no recourse for paying off their pandemic debts and staving off eviction whenever the bills come due. Though the unemployment rate has fallen to 5.9% from a peak of 14.8% in April 2020, the share of people carrying rental debt hasn’t declined: Around 15% of renters were behind on payments last month, unchanged from last summer, according to Census survey data. In terms of the eviction crisis, “We’re not in any better place,” said Sarah Treuhaft, vice president of research at PolicyLink.

Do you have rental debts due to the pandemic? Contact this reporter at venessa.wong@buzzfeed.com if you’d like to share your story.

For many people, making rent has long been a precarious budget balance. In 2019, 46% of renters were paying more than 30% of their income toward housing. There isn’t a state, metropolitan area, or county in which a full-time minimum-wage worker can rent a two-bedroom home for less than 30% of their income, according to the National Low Income Housing Coalition. When the pandemic knocked people out of work, even many of those able to bounce back into the job market found themselves months behind on rent, earning paychecks that weren’t always enough to cover usual household expenses and keep the hole from getting deeper.

The current federal rental assistance program, which will run through 2025, is intended to address both the emergency at hand and also the affordable housing shortage that predated the pandemic, an official with the Treasury Department who asked not to be named told BuzzFeed News. But some tenants behind on payments fear that their landlords will evict them as soon as the moratorium ends.

In Georgia, April Kim said her landlord is refusing partial payments. She started to fall behind when she got sick last winter and her COVID test result was delayed. By the time she received the negative diagnosis, she’d missed nearly three weeks of work from her job at Amazon, where she’d accrued two days paid time off as a seasonal employee.

She tried to make up the shortfall with two other jobs, but still didn’t earn enough to cover all her bills, so her debts continued to grow. After her car was seriously damaged in an accident and her insurance didn’t cover repairs, she had to stop working in May until her car was fixed or find a job that didn’t require her to commute.

She now owes more than $9,000 in back rent. “The only thing that’s been keeping me in my apartment is the moratorium,” she said. “I’m not trying to live here for free. I just need time to get everything together.”

Courtesy of Lindsay Pruett

“One thing happened, and it just snowballed,” said Pruett.

Lindsay Pruett, a 33-year-old middle school teacher in Wisconsin, said her household started falling behind last summer after her husband’s work as a freelance programmer dried up. He quickly found full-time work at a local grocery store, but it hasn’t been enough to pay for rent, utilities, and other bills. Pruett, who doesn’t get paid as a teacher during the summer, found a temporary, part-time job as a server at a small café, where she is earning $4 an hour plus tips. For the last year, they have rotated between being behind on their cellphone, electricity, and car payments. They’ve disconnected their internet service.

“It’s a revolving question, like, Who are we going to pay today so that we can make it another day?” she said.

Pruett is now more than two months behind on rent, about $1,200. She and her husband need about $6,000 to get caught up on their rent, energy, and cellphone bills. She said their landlord has been understanding, but has said they need to make bigger payments toward their rent debt to stay. Most recently, the plan was for her husband to pay $500 from each of his next paychecks to help get caught up, but now their car needs about $150 worth of repairs they hadn’t planned on.

“I never thought that this would be a problem I’d be in. One thing happened, and it just snowballed,” she said. “I am not a case where I fucked everything up and I made every wrong decision. This could happen to you so easily.”●

Kadia Goba contributed reporting to this story.