A devastating consequence of the pandemic? Many businesses that are deemed non-essential have had to close or severely cut down on staff, leaving U.S. residents furloughed or without jobs. A recently released report from Zillow shows that layoffs caused by the coronavirus are disproportionately impacting housing security for Asian, Latinx and Black households.
Data shows the COVID-29 pandemic is most impacting the food, arts and retail segments, and Latinx, Asian and black workers are more at risk than white workers within these industries. According to Zillow, only 8.3 percent of employees in these industries are white, while 12.7 percent are Latinx workers, 10.2 percent are Asian workers and 10.1 percent are black workers.
In addition, rent burden plays a significant role. The minority population faces a greater rent burden. According to the analysis, Asian households spend 30.6 percent of their income on rent each month, while Latinx households pay 30 percent and black households spend 28.3 percent. Comparatively, white households spend lower—about 35.1 percent of their income on rent.
The guidelines for maintaining affordability is spending no more than 30 percent of income on rent monthly. While these groups are largely on the line, this means lower-income households are at risk of crossing over, especially during layoffs caused by COVID-19 as homeowners could go without income for a couple of months. In this scenario, white households would stay within the affordability threshold, at 29.4 percent. Black households, however, would increase to 33.2 percent, while Latinx households would jump to 34.8 percent and Asian households would reach a high of 35.7 percent. In an even more severe scenario, if going four months without pay, those numbers would increase to 35.3 percent (white households) and 40 percent (non-white households).
Due to financial assistance from the CARES Act, including expanded unemployment benefits, even if going four months without work, white households’ rent burden would decrease to 19 percent and Asian households’ would decrease to 22.8 percent, still the highest level for minority households.
“This analysis highlights the financial tightrope many households walk in our vital service industries,” said Skylar Olsen, senior principal economist at Zillow. “While it’s encouraging that many who receive government assistance appear to be on solid footing for a few months, it’s important to remember that some workers will see labor disruptions, such as a loss of hours, that don’t qualify them for these unemployment benefits that are so crucial right now. And if the pandemic were to last beyond the summer, it could have lasting impacts that push many more into housing insecurity.”
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For more information, please visit www.zillow.com.
