Even before he lost his two part-time jobs in March, José Álvarez-Castillo barely managed.
The 21-year-old UCLA student shared a three-room apartment with six roommates near the Westwood campus. His share of the rent was $ 800 a month. When the pandemic hit, their job as maintenance staff and gym receptionist on campus disappeared. Álvarez-Castillo feared that he would have to maximize his credit cards, take out more loans, and still fall behind on his rent.
But then came an unexpected blessing: Alvarez-Castillo’s unemployment check.
“Unemployment really saved me,” said Álvarez-Castillo. “This extra money was incredible.”
Like tens of millions of unemployed people across the country, Álvarez-Castillo receives approved expanded unemployment benefits as part of the federal response to the COVID-19 pandemic in March. The program gives those who have lost their jobs an additional $ 600 a week in addition to regular state unemployment payments, a cash inflow that helps people pay their bills in a way that many did not expect at the start of the crisis. Chief among them is rent.
More than 94% of tenants paid at least a portion of their rent in April, May, and June, according to the National Council on Multi-Family Homes, a Washington, DC-based homeowners’ trade group that surveys 11.4 million homeowners. of apartments, or about a quarter of the nation’s rental market. According to the survey, those figures are only a few percentage points behind what tenants paid during the same months in 2019.
But those expanded unemployment benefits are slated to expire in late July, leaving tenants, homeowners, and housing advocates worried about a wave of evictions in the coming months, as tenants lose much of their income.
“What you are asking tenants to do is impossible for them,” said Doug Bibby, chairman of the multi-family housing council. “Which is to do it again, but without the resources you had given them.”
Currently, almost all evictions in California are suspended because the state court system is not processing cases, except those that are considered urgent. But those provisions will expire three months after the coronavirus state of emergency ends, and court leaders have indicated they can speed up that timeline. Without a general eviction ban, tenants will have to navigate protections that vary by city, and many require that those who fall behind in rent go to court to stay in their homes.
It’s hard to get a complete picture of how tenants are doing with their rentals right now. The data from the multi-family housing council is skewed toward high-end apartments because they only survey those with professionally managed companies. Still, other statistics show that tenants in the state are treading water, with the expansion of unemployment benefits as a key reason.
In California, almost 85% of adults living in rental homes reported paying their rent last month in a survey by the United States Census Bureau conducted between July 2 and 7, with a slightly minor in the Los Angeles area.
An analysis by the Urban Institute, a Washington think tank, estimated that more than a fifth of tenant homes in California had at least one person who lost their job during the pandemic. However, despite the massive increase in the jobless, the percentage of families in the state burdened by high rents remained the same once higher unemployment benefits were taken into account.
“Federal unemployment benefits are really going a long way,” said Sarah Strochak, research analyst at the Urban Institute and lead author of the report. “It is improving affordability for many people, particularly at the lower income levels.”
To be sure, the extra cash available to the jobless has not made renting affordable in California, nor has it alleviated the financial burdens on everyone dealing with the economic consequences of the coronavirus.
The Urban Institute study found that more than half of California’s renter households still spend more than 30% of their income on housing, even with additional unemployment insurance. In addition, nearly 2 million workers in the state have not yet received their unemployment benefits as the California Department of Employment Development has struggled to process claims. Others, including those illegally in the country, are prohibited from receiving unemployment benefits, whether extended or not.
Because Álvarez-Castillo was able to get his unemployment checks starting in April, not only is he up to date with his own rent, but he has also been able to lend money to roommates who have not received benefits. Álvarez-Castillo also sent money to his mother, who lost her cleaning job.
Other tenant financial aid programs do not come close to projected need. The city of Los Angeles plans to spend $ 100 million in subsidies for low-income tenants affected by coronavirus, the nation’s largest municipal program, but even members of the City Council who approved the plan say the federal and state government they will have to assume a greater financial burden to keep the tenants lodged.
Gaps in the safety net for tenants point to the need for Congress not only to renew expanded unemployment benefits, but also to provide comprehensive rental assistance and other protections for tenants, said Diane Yentel, president and CEO from the National Low Income Housing Coalition, an advocacy group.
“From the beginning it has been clear to us that without significant federal intervention, there would be a wave of evictions and an increase in homelessness sometime during this crisis,” Yentel said. Expanded unemployment insurance, he said, has been “significant, useful, and not enough.”
After weeks of Senate Republicans saying they were unwilling to continue the $ 600 a week subsidy, Congress is in the early stages of negotiating a compromise to include in the next coronavirus stimulus package. One possibility is to reduce the unemployment benefit and offset at least part of the difference by sending another round of $ 1,200 stimulus checks that were also part of the March package. In late June, the House approved $ 100 billion for rental assistance, but it is unclear whether it will be included in any settlement.
It’s not just tenants who benefit from expanded unemployment payments. Nearly half of the tenants at Kim Pierce’s 16-unit apartment complex in Echo Park are behind in rent, Pierce said. She was able to defer her mortgage of $ 10,000 a month for six months. But after that, your lender is adding late payments to your monthly bill for the next year.
“If I hadn’t received the aid, I would surely have gone bankrupt,” Pierce said. “I couldn’t have held on.”
Pierce is concerned that the expiration of extended unemployment benefits means that even more of his tenants will not pay just when he needs to make up for his missed mortgage payments.
“I am heading towards a cliff,” he said. “And if something doesn’t budge, we all go.”
As for Álvarez-Castillo, with future unemployment benefits uncertain, he is considering trying to find a new job. But your options seem limited. He doesn’t have a car, so he can’t get away from campus. He has underlying health problems and two of his roommates have asthma, so the thought of working at a grocery store is scary.
“I am very concerned,” he said. “I was able to save something. But it’s not enough.”
Times staff writer Sarah D. Wire contributed to this report.
