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Low-Income Homeowners’ Affordability Challenges Intensify During COVID-19

money, cash, dollarCOVID-19 is having an especially pronounced impact on the affordability of housing among low-income individuals, according to a survey from Harvard University's Joint Center for Housing Studies.

The newly released American Community Survey shows an ongoing downshift in cost burdens in 2019. While the share of all cost-burdened homeowners--which are those spending more than 30% of their income for housing fell significantly in the decade preceding COVID-19, the cost burdens for low-income homeowners fell only slightly. A particular concern induced by these longer-term trends: since the onset of the pandemic, it’s considerably more likely for low-income households to have lost jobs or had their work curtailed.

In 2019, the overall cost burden rate for homeowners nosedived, dropping from 30% to 21% since 2010. That marked the lowest levels since 2000. Higher-income cost burdens receded by more than half while low-income households didn’t fare quite as well, with declines in that category dropping off only slightly.

Larger bounces in incomes and declines in monthly cost among high-income homeowners compared to low-income homeowners are significantly fueling the unequal distribution of the decelerating cost. There also were wide disparities in the age, race, education, and location of low-income homeowners, according to the data. Data shows that low-income homeowners are "more likely to be older, live in the South, be people of color," and less likely to have a college education.

Homeowners of color with household incomes dipping below $30,000 were disproportionately impacted by COVID-19 challenges. 27% of Native American homeowners had household incomes under $30,000 compared to 22% of Black homeowners and 16% of Hispanic homeowners. The Harvard survey also reports that "cost-burdened households are more likely to be low-income and work retail and service jobs," which not only puts them at higher risk of exposure to COVID-19 but also makes them more vulnerable to losing their jobs or having reduced hours due to the pandemic.

Then there’s the age card. Low-income homeowners are significantly more likely to be at least 65. Last year, 55% of housing with incomes of less than $30,000 also fell under that category while only 22% of homeowners earning at least $75,000 were a minimum of 65. On the other hand, the degree of cost burden wasn’t as harsh among older households; the duress among homeowners at least 65 dipped by 4% from 2010-2019.

About Author: Chuck Green

Chuck Green has contributed to the Wall Street Journal, Washington Post, Los Angeles Times, San Francisco Chronicle, Chicago Tribune and others covering various industries, including real estate, business and banking, technology, and sports
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