The state of renting before COVID-19
Renters across the country are facing unemployment at unprecedented rates, with 6.6 million Americans filing in the first week of April. As a result, many are unable to pay basic expenses—and for most people, the biggest of these is their monthly rent payment.
Prior to COVID-19’s devastating impact, we’d been working on putting a report together similar to our 2019 Renter Sentiment Report, and surveyed renters across the country to learn how they felt about the costs associated with renting.
Given how drastically many renters’ financial situations have changed since we conducted that survey, we’ve decided to hold off on publishing the full report. That said, we believe that the data we collected illustrates that even before COVID-19, affordability was a serious issue for renters.
That’s why we’re sharing it now.
Here’s how U.S. renters felt, as of March 10, 2020—just one week before we started to see nationwide closures and skyrocketing unemployment rates:
1. Renters believed that their rent was higher than it should be
Of the renters we surveyed, over half (53%) said they believed that their rent is higher than it should be. Another 40% said their rent was fair, while only 7% said it was lower than it could be.
This is relatively unsurprising, given the widespread rental affordability problem in the United States. As of 2020, almost half of renters in the country are considered cost-burdened and spend at least 30% of their income on monthly payments.
It also builds on what we found in a survey conducted last June, in which 46% of renters said they worry about being able to pay rent at least two months out of the year, and another 18% said they worry every single month.
2. Renters were stressed about affording up-front move-in costs
Though monthly payments are the most obvious cost of renting a home, the renters in our survey cited a different expense as their biggest stressor: up-front move-in costs.
In fact, 79% of renters said they believed that up-front costs, including their security deposit and first month’s rent, were too high. That’s 49% more renters than said the same of their monthly rent payments.
Beyond that, when asked to rank several common stressors, renters ranked affording the up-front costs of moving as more stressful than making monthly rent payments—and ranked both ahead of their families, relationships, politics, and paying other bills on time.
3. Renters wanted alternatives to traditional cash deposits
Given that almost 80% of renters believe that up-front move-in costs are too high, it makes sense that many are in favor of deposit alternatives that lower these costs.
Of surveyed renters, 80% were in favor of their cities adopting legislation that requires properties to offer more affordable alternatives to cash security deposits. Another 4% already live in cities with this kind of legislation.
Beyond that, when asked if they’d rather pay a refundable deposit in the amount of one month’s rent or a non-refundable deposit alternative in the amount of 17.5% of one month’s rent, over half of renters (52%) chose the deposit alternative.
The impact of COVID-19 on renters
According to NMHC, only 69% of renter households had paid rent as of April 5, down from 82% at the same time last year.
As the data above shows, affording monthly payments and up-front costs was already a challenge for many. The global pandemic has exacerbated those challenges, and made paying for housing even more stressful for renters across the country.
At Jetty, our goal has always been to make renting more affordable, and as we see the impact of COVID-19 on both renters and properties, we’re more focused than ever on working towards that goal.