For every household that goes through eviction, there are many more struggling to pay rent and are living, often unknowingly, with the threat of becoming homeless.
Our 501(c)(3) has spent the majority of the past year working with residents who live day-to-day with the threat of becoming homeless through eviction, and most don’t even know it.
You see, residents who live in lower-income communities just go through the motions of working for a living. It is safe to say, that anyone in survival mode will fall into this same category. Therefore, when an individual’s safety and security is threatened they will have very little time to stop and ponder how money works, not to mention, where they fit into the bigger economic picture. When one lacks the desire, education and time to stay up to date with changes in the economy, such individuals are unaware that eviction is looming and homelessness could be inevitable.
The main culprit of this growing population is the rate at which rent growth has outpaced wage growth.
Although there is no question financial help is needed to get someone out of the clinching jaws of eviction, it is evident that without some level of Self-empowerment, one cannot sustain a new path to a better future. If the individual does not take personal responsibility or experience some form of personal success, they will quickly lose hope and continue the inevitable journey to eviction. Even if rent subsidies are made available.
Missed rent payments often lead to eviction, which uproots households, destabilizes families and communities and creates an instability from which it can be extremely difficult to recover. Evictions are a leading cause of homelessness, and research shows that frequent moves lead to poor educational performance and increased behavioral problems in children. Even when they do not face eviction, members of households that struggle to pay rent live with the fear of housing insecurity, which often means sacrificing other basic needs, such as food and transportation.
It’s interesting to mention when we meet with a resident who has fallen behind on their rent, it is often because of the same three factors:
#1. Low wages vs the cost of rent
Often we see a large disparity between what an individual earns and what they are currently spending just to survive. Even if food stamps are available, an individual making minimum wage will barely have enough funds to cover their rent and utilities. When a “poor” individual is considered to be above the poverty line and doesn’t qualify for government assistance, they are faced with a precarious choice: (1) stop working or (2) work less. Although both options might qualify an individual for such things as free medical, food stamps and government rent subsidies, the recipient has no idea that the real cost to them is anything but beneficial.
Initially, in this situation, we notice the resident believes they have won the lottery in terms of getting “free money”, coupled with the idea that they either have to work less or stop working as a result of that “free money”. However, their eyes are quickly opened once we show them (through budgeting assistance) that their situation worsens with their sole dependence on these subsidies.
Performing a metro-level analysis, we find that evictions are most common in metros hit hard by the foreclosure crisis and in those experiencing high rates of poverty. Perhaps counterintuitively, expensive coastal metros have comparatively low rates of eviction, in part because strong job markets with high median wages offset expensive rents in those areas.
Self-empowerment through education becomes crucial for an individual who desires to become financially stable and wants more from life. This is the reason we focus on empowering our residents and show them a step-by-step path out of poverty. We make residents more aware of their surroundings and what is taking place in the economy and often hear, “I had no idea“. When we offer empowerment classes, we can show the residents how they can take the steps to create a change and maintain that change moving forward. If this is to happen, it must always begin with one’s willingness and commitment, but even before this, we must make the individuals aware of what’s taking place around them.
#2. Mismanagement of money and or incompetence with spending
Sadly, we see financial ignorance when it comes to an individual’s level of understanding about what they make versus what they can afford. Someone who is only making $12 to $14 per hour does not understand that they will not be able to cover the basic expenses of having a one bedroom apartment. Education is vital. We often hear, “I don’t need another job I already have one.”
Our first step when we meet with a resident is to create a budget with them so they can see first-hand their meager wage does not cover the cost of their most basic necessities. Our budget program is the first and most crucial step in getting our residents to see and understand their financial situation. Understand there is a lot of resistance to our educational programs initially, but once the resident understands where they are financially, they can begin to see the importance of their own Self-empowerment.
Evictions disproportionately impact the most vulnerable members of our society. Renters without a college education are more than twice as likely to face eviction as those with a four-year degree.
#3. An unforeseen circumstance
When an individual is making minimum wage, it most likely means they are also in a job that pays hourly with no benefits. Therefore, even if only a couple of hours of work are missed, this shortage (usually less than $30 dollars) will cause an individual to fall behind.
In addition, if a resident works for a company who is not able to offer PTO (paid time off), they will have a difficult time making up the shortage. Not to mention, often such companies hire and fire based on their own seasonal and/or survival needs. This often leaves an individual scrambling to replace the income or they innocently might choose to wait and collect unemployment.
However, if someone who only makes minimum wage files for unemployment, they don’t realize the fraction of pay they will receive until it’s often too late.
Although most residents believe this is the most logical step (as it seems like “free money”), it’s only a matter of time (often just a few days) before the power disconnect notices begin to show in addition to the eviction notice being posted on the front door. Additionally, the valuable time spent waiting for unemployment could be time spent looking for income replacement. However, once this reality sets in, it is often too late.
Analyzing data from Apartment List users, we find that nearly one in five renters were unable to pay their rent in full for at least one of the past three months. We estimate that 3.7 million American renters have experienced an eviction.
Single moms are currently the hardest hit by eviction. Therefore it seems couples should have a better chance of surviving when two incomes are in play. However, households with children are twice as likely to face an eviction threat, regardless of marital status according to Rentonomics.
When it comes to empowering our residents, it is apparent that most are individuals who only have experience in working for companies that require them to fill out an application. When we introduce our residents to the opportunities that become available to them by having a resume, we expose them to a new realm of possibilities and place them on a new path to Self-empowerment. Not to mention, the understanding that comes once they are educated on how life and money works. We know a resident is on a better path when we hear, “I understand and I can do this“. Furthermore, we know we made a difference when we see the sigh of relief that comes when housing insecurity is no longer a threat living next door.
When households are unable to reliably pay rent, they live in uncertainty, with the risk of eviction looming. Low-income renters, in this situation, often have to choose between paying rent and providing for their other needs. Avoiding eviction often means cutting back on other essentials, including food.