A new study investigates the impact of 2020 Covid-19 rental eviction moratoria on the wellbeing of US households, finding that eviction moratoria across the US resulted in a significant decrease in incidences of household food insecurity and mental stress, with larger effects evidenced among African American households.

In the wake of the Covid-19 pandemic and related disruption to economic activity, US weekly jobless claims in March 2020 skyrocketed to 7 million, roughly ten times that of peak levels recorded during the 2008 global financial crisis. According to the Census Household Pulse Survey, at the onset of the pandemic, the share of affordability constrained renters, defined as households paying more than one-half of their income on rent, jumped to one-half of all renter households. 

Further, renter households had little wherewithal to withstand Covid-related employment shocks, given that, in addition to their lower average incomes, they have very little savings and wealth. Renter household net worth on average is only $6,300, compared to an average homeowner net worth of $255,000. To assure shelter of affordability-constrained renters  and to damp the spread of the virus, many state and local governments in the US took the unprecedented steps of enacting moratoria on tenant eviction at the early stages of the pandemic, even before the CDC moratorium was implemented in September 2020. The Eviction Lab at Princeton estimates that the eviction moratorium helped prevent 1.55 million eviction filings, affecting more than 3.7 million people. Prior to the pandemic, the Eviction Lab estimated that over 1 million people were evicted from their homes each year. 

Researchers have linked rental eviction to numerous adverse outcomes including those related to employment, homelessness, and future housing stability. Among health impacts, eviction is associated with anxiety, depression, high blood pressure, and declines in self-reported health overall. While eviction wears on people’s mental health in normal times, those stressors multiply during a period of pandemic. According to the US Census Household Pulse Survey, about 4 in 10 adults in the US reported symptoms of anxiety or depressive disorder in the wake of onset of the Covid-19 pandemic, up from 1 in 10 adults who reported these symptoms during 2019. Eviction moratoria assured renters of continued shelter during a period of elevated Covid-19 virus transmission, likely easing mental stress and anxiety among treated households. Further, moratoria on eviction and related deferral of rent may have provided treated households with financial relief by enabling households to re-direct scarce resources to other immediate consumption needs, including food purchases, and therefore lowering food insecurity. 

Moratoria on rental eviction may have conferred a broad set of benefits on vulnerable households and the local economy. There is evidence of direct, intended impacts of eviction moratoria in lowering the number of eviction filings and reducing the spread of Covid-19. Kathryn Leifheit, a postdoctoral fellow at UCLA, estimated that during a six-month span of 2020, the expiration of state-level eviction bans were responsible for nearly 11,000 deaths and more than 430,000 cases of Covid-19 in the US. However, little is known about the indirect impact of eviction moratoria on other aspects of household well-being.

In a recent paper I co-authored with Stuart Gabriel (UCLA) and Xudong An (Philadelphia Fed), we use the staggered implementation of rental eviction moratoria , which was implemented by states in a haphazard manner throughout the March-August 2020 period, as an opportunity to identify the household impact of those interventions. For example, among states that enacted eviction moratoria, California was among the first to implement such measures in March 2020 while Virginia did not enact a state-level eviction moratorium until July. We use different data sources, such as the Federal Reserve financial institution supervisory data; Opportunity Insight Economic Tracker, the Census Covid-19 Household Pulse Survey, and Google Trends search query information to better understand the effects of eviction moratoria on household non-durable and food spending, food insecurity, and mental health.

We find that the implementation of state rental eviction moratoria led both to elevated credit card spending and debt payments. We also show a small but significant positive impact of rental eviction moratoria on borrowers’ credit score. We further distinguish between renters and homeowners to help our causal inference as renters, not homeowners, were the target beneficiaries of the eviction moratoria. 

“We find that the implementation of state rental eviction moratoria led both to elevated credit card spending and debt payments. We also show a small but significant positive impact of rental eviction moratoria on borrowers’ credit score.”

We further account for the share of population under financial distress (and thus at risk of eviction) as eviction moratoria are targeted at those households. As expected, our results confirm more pronounced effects on household well-being among targeted high renter/unemployment share zip codes. Based on our estimates, a 12-month eviction moratorium is associated with 16 and 14 percent increases in credit card spending and payment, respectively. We corroborate and provide further disaggregation by spending category of state eviction moratoria using the Opportunity Insight data. We find sizable spending effects in certain categories of spending including accommodation and food service and retail with and without grocery. A one week of eviction moratorium is associated with a 1 percent increase in food service spending and a 0.9 percent increase in grocery spending. 

Consistent with above findings of elevated food and grocery spending in the wake of enactment of state eviction moratoria, our results show that eviction moratoria reduce the incidence of household food insecurity. An additional week of enactment of state eviction moratoria is associated with a 2 percent decline in subsequent self-reporting of food insecurity among African Americans (compared to an average of 21 percent that reported food insecurity). We corroborate these findings using Google search query data. There we find that state-level search query for such terms as “Food Stamps” and “Food Banks Near Me” was significantly reduced in the wake of enactment of state eviction moratoria. 

Finally, our results suggest that state-level rental eviction moratoria significantly reduced the incidence of emotional stress as reported in the survey, measured by such indicators as “feeling anxious,” “can’t stop worrying”, and “feeling down”. 

Eviction disproportionately affects communities of color. People of color comprise about 80 percent of those facing evictions. The Census Pulse Survey, dated August 7 2020, indicates that nearly one-half of African American and Hispanic renters had slight or no confidence in their ability to pay the next month’s rent on time, a figure that was twice as high as white renters. Consistent with the above, our findings indicate that rental market interventions more substantially reduced food insecurity and mental distress among African American households.

However, the above estimated benefits associated with eviction moratoria come with a cost. Urban Institute and Moody’s Analytics estimated that upward to $70 billion in outstanding rent debt was owed to landlords at the end of 2020. Further, the University of Arizona Cost of Eviction Calculator estimates that expiration of eviction moratoria could lead to emergency shelter, medical and foster care, and juvenile delinquency costs associated with evicted and newly homeless renters in the range of $62 to $129 billion. 

Commencing in September of 2020, the Centers for Disease Control and Prevention (CDC) broadened the federal eviction moratorium to effectively protect all of the nation’s 43 million rental households. However, on August 26, 2021, the US Supreme Court halted the CDC’s eviction moratorium, ruling that the CDC had exceeded its authority. With this ruling, thousands of renters are now at risk for evictions and at risk of losing their housing.  Today, only six states and the District of Columbia have eviction moratoriums still in place, with protections in California and Illinois set to expire in October, according to The Eviction Lab at Princeton. Congress authorized almost $47 billion in rental relief to compensate landlords for lost payments, but state and local governments have been slow to get the funds to those in need. 

In the absence of new measures to address widespread and accrued shortfalls in rent, large numbers of households could face housing instability, economic hardship, food insecurity, and adverse health outcomes.

Disclaimer: The views expressed here are solely those of the authors and do not represent those of the Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Dallas, or the Federal Reserve System.

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