A recent study reports 61% of Americans are living paycheck to paycheck, up 2 percentage points from last year – increasing the risk they will default on their rent.
Just 21% of survey respondents blame their financial standing on ‘nonessential’ spending, with the majority saying they are struggling under the rising cost of necessities like food and gas.
Low-wage earners are most likely to be in this situation, with nearly 8 in 10 consumers earning less than $50,000 a year unable to afford next month’s bills – including rent – until their next payday.
With so many Americans living paycheck to paycheck, and rents and other costs rising, the Department of Housing and Urban Development (HUD) recently announced a 12% nationwide fair market rent increase for the fiscal year 2024 and an infusion of $113 million in Housing Choice Voucher (HCV) funds. Together, these updates will increase both the number of HCV recipients and the number of rental units they can access.
Higher fair market rents boost the maximum value of HCVs, which in turn increases the revenue that landlords and property managers receive from voucher holders. While property managers are not required to accept HCVs (although it may be against local fair housing laws to deny an applicant solely because they have one), they may want to consider welcoming more tenants who use them.
This choice may come with challenges, as renters may still have difficulty paying their portion of the rent on time and in full – vouchers cover most but not all the rent. A thorough approach including automated payment reminders and regular communication can go a long way toward preventing late or missing payments.
If rent increases are unavoidable, it may be more manageable for renters who are living paycheck to paycheck if they are implemented incrementally.
Property managers are in a unique position to respond to the current financial crisis by using their market knowledge to guide landlords in a way that is both profitable for their business and beneficial to those who are most financially vulnerable.
More public housing headlines
HUD considering cash housing assistance pilot – Planetizen
Bill seeks to boost landlord participation in housing choice voucher program – Affordable Housing Finance
How property managers can support tenants facing food stamp cuts – PayProp
