Los Angeles Apartment Dwellers Owe $3B in Back Rent

“The end of the pandemic, but not renter distress” is the headline of a new study from UCLA Lewis Center for Regional Policy Studies and the Lusk Center for Real Estate, which found that the rent debt in Los Angeles is substantial. Los Angeles County has $3 billion in total rent debt, and Los Angeles city has about $1.5 million in unpaid rent from the pandemic. Among those with rent debt, the average tenant owes $2,800 in unpaid rent.

The share of renters unable to make payments only worsened as the pandemic wore on. From May to July 2020—near the onset of the pandemic—about 7% of renters did not make a single payment. Likewise, from January to March 2021, the same share, 7%, of renters did not make a single payment. However, the share of renters that made a partial payment increased from 17% in May through July 2020 to 31% in January to March 2021.

The UCLA/USC study surveyed 1,000 households to examine the accumulated rent debt, and found that nearly half of the households had difficulty making rent payments through the pandemic. Overall, 49% of tenants said that they owe some amount of money to their landlord, and among those that owe back rent, 20% owed less than a months rent and 15% owed more than six months in total rent debt.

In terms of demographics, rent debt was the most prevalent among low-income households; however, high-income households struggled to pay rent as the pandemic progressed. In 2021, high-income households were more likely to pay partial rent. Rent debt also varies from household to household, but the study found that Black and Asian households are further behind in rent payments.

There was some help, including expanded unemployment benefits and stimulus checks. During the pandemic, 68% of renters struggling to pay rent received federal aid and 15% received local aid. About 18% of respondents didn’t receive any assistance. Further help is on the way. California has extended the eviction moratorium through September 2021, which the study says was “rightfully” done, and it has committed to helping renters pay back rent payments.

The current approach to rent assistance, which repays the landlord directly, falls short of helping many tenants that struggled through the pandemic, namely those that went into other forms of debt after prioritizing rent payments. Economists say that the commonsense solution is to give people cash directly to help people that are financially distressed make payments where needed. Concerns over fraud have kept this model from moving forward, but the study supports the concept, saying that the actual rate of fraud is less than 5%.