Millions of tenants, and especially minority and low-income families, could suffer the previously averted economic damage from the COVID-19 pandemic when federal and state relief programs end, according to a report released today by the Consumer Financial Protection Bureau.

The report, “Financial Conditions of Tenants Before and During the COVID-19 Pandemic,” finds that some government relief efforts have likely helped maintain financial stability for tenants and their families.

The CFPB report compared landlords and tenants and found that, on average, tenants’ economic conditions were significantly more sensitive to relief measures such as stimulus payments and changes in unemployment benefits. When these programs end, the report says, tenants and their families may be at increased risk.

“Today’s report confirms that renters, compared to owners, are more likely to be black or Hispanic, more likely to have lower incomes, and more likely to be female,” the manager said CFPB Acting Dave Uejio. “They are also at particular risk of falling further behind as the country recovers from the economic impacts of COVID. “

Past economic downturns have seen “communities of color and low-income communities of all races and ethnicities left behind as the economy as a whole recovers,” he said. “We cannot repeat this story.”

Uejio said CFPB is committed to helping tenants and their families thrive. “We need to amplify and protect the modest gains tenants have made during the pandemic to ensure this country’s full and fair recovery from COVID-19.”

Using the Making Ends Meet survey and CFPB consumer credit data, CFPB researchers found that the financial conditions faced by tenants and landlords were divergent before the pandemic. With tenants typically experiencing more financial vulnerability than landlords, they had more to gain from pandemic relief efforts than landlords and could have more to lose when such relief ended, the report said.

By comparing tenants and owners, the researchers found:

• Renters are more likely to be black or Hispanic, are younger, and have lower incomes. Before the pandemic, the average credit scores of renters were 86 points lower than those of homeowners with a mortgage and 106 points lower than those of homeowners who reported paying no mortgages.
• Tenants’ debts also differed significantly from landlords before the pandemic. As of June 2019, tenants had more student debt and had used some form of alternative financial service, such as a payday lender, pawnshop, or auto title loans.
• During the pandemic, the financial conditions of tenants, on average, seemed to improve as much or more than those of landlords. Renter credit scores rose 16 points during the pandemic, compared to 10 points for mortgages and 7 points for other landlords, for example.
• The financial conditions of tenants throughout the pandemic have been more sensitive to changes in government financial assistance than that of landlords. Delinquency, credit card use and credit card debt among renters have increased and decreased in conjunction with stimulus payments and changes in federal unemployment benefits, while delinquency, card use Homeowners’ credit card debt and credit remained relatively stable.

As government financial support for a pandemic ends, tenants risk falling even further behind the broader national recovery, the CFPB said. Renters make up more than 30% of U.S. households, and their well-being is critical to the well-being of the economy as a whole and of communities, he said.