Update: The COVID-19 Layoff Housing Gap
Date: May 13, 2020
Each week brings troubling news about the economic effects of the COVID-19 crisis, and MAPC has been working to stay on top of new information as it emerges. We published our first research brief about the housing security implications of widespread layoffs on April 2 and issued an updated report analyzing 571,000 Massachusetts claims on April 22.
An additional 206,000 unemployment claims have been reported since then, bringing the seven-week total since March 16 to 777,200, an estimated 21 percent of all pre-COVID wage earners1.
Another 185,000 workers who are ineligible for standard unemployment assistance (such as those who are self-employed) have filed for the CARES Act-authorized Pandemic Unemployment Assistance (PUA), which opened for applications on April 20.
We estimate that 40 percent of standard unemployment claims come from just three occupations: Food Preparation and Serving; Office and Administrative Support; and Sales. These three occupations are the largest bubbles in the chart below, in which size indicates the magnitude of layoffs for each occupation.
The chart can also provide insight into which occupations have been hit hardest across the state: the share of each occupation that has filed for unemployment is represented on the vertical axis. Occupations located higher up on the chart have had a larger percentage of the pre-COVID workforce file for unemployment. (The horizontal axis represents the relative size of the occupation: for example, Office and Administrative Support accounts for the largest share of pre-COVID workers.)
We estimate that 40 percent of pre-COVID Food Preparation and Serving workers have filed for unemployment, as have over 33 percent of Construction and Extraction workers. Installation, Maintenance, and Repair; Transportation; Sales; and Personal Care and Service occupations have seen layoff rates over 25 percent as well.
Unfortunately, this level of detail is only available for wage-earners covered by standard unemployment. Very little is known about PUA claimants—neither their industry, occupation, or even exact number have been reported by the Department of Unemployment Assistance. This data limitation makes it difficult for us to know much of anything about the impact those layoffs may have on housing assistance. Due to the limited data about PUA claimants, we have only updated our housing gap analysis for those who have filed traditional unemployment assistance.
With expanded CARES Act unemployment benefits, there are still an estimated 7,800 renter households and 7,700 owner households who will have trouble paying for their basic needs and housing costs once they have spent whatever direct payment they received from the federal government. We estimate these 15,500 households would collectively need approximately $13.8 million monthly to keep current on their rent or mortgage. Households with children, households that speak a language other than English at home, and unemployment claimants who are people of color are more likely to need assistance compared to all laid off workers. Without additional assistance, these households are likely to experience housing insecurity that worsens existing inequities across the state.
If these same workers are still unable to work in August after the expanded CARES Act unemployment benefits end, the situation becomes much worse. 178,000 households who filed unemployment claims would have trouble paying their mortgage or rent, of which about 55 percent are renters. The average monthly assistance needed is $935 per renter household and $1,290 per owner household to fill the gap between a household’s income with unemployment and the cost of housing and other necessities. In total, we estimate a statewide assistance gap of $195 million monthly.
While current protections allow those who own a home to add any missed payments to the end of their mortgage, renters will still be required to pay their missed rent after the eviction moratorium ends. Given the percentage of income that is already spent on rent each month, it is unlikely that most rental households would be able to “catch up” to pay missed rent. Without additional protections or assistance, these households are likely to face eviction in the future, which will only exacerbate our statewide housing crisis.
In addition, the limited amount of data available about unemployment and PUA claimants makes it more difficult for state and local governments to coordinate assistance efforts. We urge the state to release detailed PUA claims data, including the total amount of claims by industry for each municipality and demographic information about those who have applied—including race and Hispanic origin—so we can see who these programs are benefiting most. We also urge the state to release unemployment claims by industry for each municipality so local governments and regional groups can better understand the scale and scope of current layoffs in their communities.