The COVID-19 pandemic and related economic downturn have accelerated the existing housing affordability crisis for renters and homeowners, exacerbating longstanding inequities and pre-existing economic stressors on households. As of 2019, an estimated 37.1 million US households, nearly one in three, spent more than 30 percent of their income on housing. Of those, more than seventeen million spent greater than 50 percent of their income on housing costs. As the demand for affordable housing continues to outpace the supply across the country, rising housing prices make it increasingly difficult for many individuals and families to afford and sustain housing, especially housing located in opportunity-connected communities with greater access to jobs and economic mobility. This has had an outsized negative impact on those most at risk of housing insecurity before the crisis—Black and Latinx households and people earning low incomes—and has delayed or precluded homeownership, which has been a key driver of amassing generational wealth for many Americans.

Today, the dramatic increase in the number of renter households at risk of eviction and homeowners unable to pay their mortgages has acutely impacted Black and Latinx households5 who were already more likely to be cost-burdened.6 More than half of these households have faced unemployment, lost income, and experienced difficulty making rent or mortgage payments during the pandemic. According to research from the JPMorgan Chase Institute, even prior to the pandemic, renters experienced more volatility in their labor income than homeowners. While many homeowners have been covered by COVID-19 forbearance protections, Black and Latinx homeowners are slightly more likely to have mortgages not covered by forbearance protections. At the same time, pandemic-driven unemployment, which has disproportionately impacted Black and Latinx workers, has increased the risk of missing mortgage payments among existing Black and Latinx homeowners. Long-term financial instability, a supply gap in affordable homes for purchase, and rising home prices continue to decrease the number of Black and Latinx individuals and families becoming homeowners.

JPMorgan Chase supports comprehensive and transformative evidence-based policy reforms that improve household stability weakened by the pandemic and increase the availability of and equitable access to affordable housing near economic opportunity for renters and homeowners. Both affordable rental housing and sustainable, affordable homeownership located in opportunity-connected communities are essential to improving overall affordability and household stability in the housing market. Effective solutions should span the rental housing and homeownership markets to bring about structural changes in the broader housing ecosystem. Policymakers can address COVID-induced instability and long-term recovery for renters and homeowners by closing the gaps that leave cost-burdened households vulnerable to economic shocks. This requires a multi-faceted approach, including advancing policies that effectively produce and preserve more housing units at lower costs, supporting common-sense regulatory reforms to increase the availability of sustainable mortgage credit, and removing bias-based barriers that have impeded people of color from fully participating in the housing market.

The rental housing crisis is driven by an affordability challenge comprised of a supply-side gap in available affordable housing and demand-side income inequality due to the inadequate and unstable income of many renters. On the supply side, the United States has a shortage of nearly seven million rental housing units for extremely low-income renters Further compounding supply shortages, an estimated 2.2 million affordable units are at risk of being lost by 2025, in many cases due to expiring affordability requirements. From 2001 to 2018, rents increased 13 percent while median renter household income rose just 0.5 percent, leading to demand-side income constraints. Today, over half of Black and Latinx renter households are cost-burdened, and even with the provision of federal rental assistance, millions of renter households are estimated to be at risk of eviction due to the availability and timing of the funding. The economic instability of tenants also threatens the viability and stability of landlords of existing affordable units, especially owners of units that are affordable in the local market without subsidy. These challenges can be addressed by targeting and stabilizing economically vulnerable renters, preserving existing affordable housing, producing new affordable housing units efficiently at lower costs, and mitigating bias in the rental market to ensure all renters have access to affordable and safe housing connected to jobs and opportunity.