A majority of renters surveyed in Los Angeles have cut back on critical basic needs like food, and nearly half took on additional debt in order to afford rent over the past two years, a study from the USC Sol Price Center for Social Innovation finds.
The study documents the deep economic vulnerability of many L.A. residents even prior to the COVID-19 pandemic. Three out of four Los Angeles households surveyed were rent burdened, meaning they spent over 30% of household income on rent and utilities. Nearly half of renters surveyed were severely rent burdened, spending over half their household income on rent and utilities.
The results suggest many L.A. renters were already living on the razor’s edge of food insecurity and homelessness prior to the coronavirus crisis, with implications for other urban regions across the country.
“This study tells us that many residents were already deeply economically distressed before the COVID-19 pandemic,” said study co-author Gary Painter, director of the social innovation center and its Homelessness Policy Research Institute.
“The pandemic has further revealed just how many Americans live paycheck to paycheck, one unanticipated bill away from losing their homes. We must act now before these catastrophic conditions leave thousands newly homeless.”
Rent-burdened Los Angeles households cut back on basic needs
Researchers used the results from an in-person survey of 800 renter households in South and Central L.A., conducted from January to October 2019. Conducting the survey in both English and Spanish, surveyors asked renters about their housing and economic situations and how rental costs impacted their lives.
The study found a majority of renters were significantly cutting back on basic needs, sometimes for years, in order to afford rent. More than 60% of renters reported cutting back on food, 45% on clothing and 33% on transportation in order to afford rent. Almost half delayed bill payments or took on additional debt during the previous two years to make rent payments.
We must act now before these catastrophic conditions leave thousands newly homeless.
In addition, the research showed that cutbacks were more severe in Central L.A. — where rent was increasing the most and where rent has also been increasing for longer — versus South L.A. Central L.A. households were also more likely to have reduced spending on health and medicine, education and family activities than those in South L.A.
Finally, 1 in 5 households said they weren’t able to cover an unexpected $400 expense. Two in 5 said they would have to take on additional debt to cover the expense, with 28% saying they’d need to piece together multiple money sources to do so.
The study also uncovered racial and ethnic differences in responses: White and Asian households in Los Angeles were less likely to be rent burdened than Latino and Black families, and households surveyed in Spanish were significantly more likely to be rent burdened and severely rent burdened than households surveyed in English.
For many renters, spending cutbacks are semi-permanent changes
Prior research has shown that households reduce consumption in response to rent burden, and this latest survey reveals the pervasive nature of renters’ coping strategies. Painter and his colleagues note that the cutbacks in spending have become semi-permanent shifts that impact residents’ quality of life as opposed to temporary changes. For example, over 1 in 4 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 over a year in order to pay rent.
L.A. Department of City Planning data shows that over the decade between 2000 and 2010, rents in the city increased 28% while median household incomes rose just 1.2%. By 2018, well over half of renter households in the region were considered rent burdened.
While the study authors note that the pandemic has caused serious economic harm across the nation, especially for the renters that comprise over half of the households in Los Angeles, they say the impacts have been particularly severe because renters were already deeply struggling.
“This new study demonstrates how housing instability and unaffordability drive other economic vulnerabilities, including job loss, homelessness and medical emergencies. Housing is foundational to overall economic stability and wellness,” said study co-author Jovanna Rosen, assistant professor of public policy at Rutgers University-Camden.
In the near term, the authors say elected leaders should take action to avoid the looming eviction crisis by pushing for widespread stimulus aid, extending and enforcing eviction moratoria, and enacting policies that protect small landlords from rental nonpayment.
In the long run, they urge state and local officials to work with the federal government to enact structural changes to social safety net and housing policies.
“To help people survive this crisis will require bold and decisive action by government, strong political will and an understanding that we cannot just go back to our pre-pandemic status quo,” Painter said.
More about the study: The authors examined data collected in a large-scale, door-to-door survey across the two Los Angeles “promise zones,” a designation that involves initiatives addressing issues of housing unaffordability and organizing to improve neighborhood conditions for low-income residents. The two areas have important similarities — including large immigrant populations and high proportion of residents dealing with rent burden — as well as differences; for example, Central L.A. has experienced gentrification and displacement pressures for a longer period of time than South L.A.
The survey was deliberately undertaken through a door-to-door approach in order to access harder-to-reach populations. Researchers randomly selected smaller geographic units within each zone, allowing them to create sufficient address density to make a door-to-door approach feasible.