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How Much Debt Have California Renters Accrued During the Pandemic?

Across the country, renter protections and eviction moratoriums that were established during the pandemic are receiving scrutiny from landlords. California in particular has some of the longest lasting renter protections; in some cities, landlords were still unable to evict tenants well into 2023, even if they’re unable to pay rent or have accrued a debt over the past few years.

Research shows that most renters in the state have relied on renter-friendly laws, or are still relying on them. Professors from the University of Southern California and UCLA conducted multiple surveys to collect data on renter debt in the state of California during the pandemic. The findings were startling, to say the least.

Surveys were conducted in July 2020 and again in March 2021. The trends that the data show between these two time points are worrying and truly demonstrate the devastating impact that the pandemic had on renters.

In 2020, only 17% of renters had admitted to paying less than the full rent amount at some point during the pandemic. However, by March 2021, this number had jumped to 31%.

In 2021, 49% of households in Los Angeles County weren’t able to pay all of their rent since the onset of the pandemic. While the majority of renters were paying their full rent on time, there are thousands of L.A. residents who have accrued significant debt during the COVID-19 crisis. The median amount that renters owed their landlords was $2,800. This figure suggests that within L.A. County alone, the total rental debt amassed was over $3 billion.

When surveyed in 2020, only 6% of respondents used a credit card to pay their rent prior to the COVID-19 outbreak, and about 19% used a credit card by July of that year. Only eight months later, that number skyrocketed to 44%. What’s more — 58% reported dipping into their savings in order to make rental payments, 49% turned to family or friends for financial assistance, and 37% took out a payday or emergency loan.

The surveys found that 2% of renters were at least three months behind on rent in 2021. This equates to around 40,000 households that are potentially in a deep financial hole that will likely end in eviction.

While many renters benefited from federal or local support, this support isn’t enough to keep renters out of debt and secure their housing. As many as 45% of renters were taking on debt in 2021, and researchers found that many of them are indebted to institutions or people other than their landlord. They speculate that this is likely the case because tenants are concerned about their housing security.

Researchers asserted that the best way for local governments to address housing debt is to get money directly into the hands of renters. This helps them pay their debts directly and immediately, so they can catch up on rental payments or alleviate other debts that might interfere with rent.

What has changed in 2023?

Looking at more recent data, the situation in California isn’t looking all that much better. The total rental debt in L.A. alone is still estimated to exceed $1 billion. And now, many renters have lost the protections they had in 2020 and 2021.

As eviction moratoriums end, the number of evictions filed in the state of California has risen from 12,646 in 2021 to 34,398 in 2022. Los Angeles chose to extend their moratorium into March of 2023, and has even expanded their just-cause eviction ban.

Even with many evictions happening now in Los Angeles, many landlords find that the court process can take many months, and are choosing to forgive rental debt just to get tenants out.

Of course, many landlords don’t have such a privilege, as the eviction moratoriums have put a significant financial strain on smaller operators and mom-and-pop landlords. Many property owners argue that the pandemic renter protections are no longer justified, and some tenants are taking advantage of the laws.

Elly Johnson stands at the forefront of content research and online branding at Utopia Management. As the Content Marketing Manager, she delves deep into understanding local real estate and rental markets, fueled by her passion for travel and keen research skills. Elly is dedicated to empowering individuals with the knowledge they need to make informed decisions about where to reside. A proud alumna of the University of South Florida, located in the vibrant heart of Tampa Bay, she holds a Bachelor of Arts in Psychology. Her academic background and extensive travel experiences uniquely position her to provide insights that resonate with diverse audiences.

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