Renters of color pay a premium for housing

Photo illustration of a row of apartment buildings, with a giant hand holding a stack of hundred dollar bills behind them

Renters of color, especially Black Americans, often pay a “Black tax” — a premium for renting similar housing in the same neighborhoods as whites.

Why it matters: A recent study found that Black tenants paid as much as 2% more in rent — a gap that widened if the area had a bigger population of white people. Higher rent is just one hurdle to accessibility and affordability in the rental market that people of color uniquely deal with despite federal fair housing laws enacted more than 50 years ago.

What they’re saying: “Putting everything else constant, we’re talking about paying an extra 2% for your housing, and you get nothing for that,” Dirk Early, the study’s lead researcher, tells Axios. “It’s just another cost associated with race.”

By the numbers: Locked out of homeownership, people of color overwhelmingly rent.

  • More than half of Black American and Latino households are renters, according to USAFacts, while Asians and Native Americans are just under that threshold.
  • Compare that to the 27% of white households that rent.

How it’s playing: People of color already put more of their income toward housing compared to white people.

  • They’re more likely to have fallen behind on rent during the pandemic — namely because minority renters overwhelmingly work in sectors that shed jobs because of COVID-19.
  • Households of color make up just under half of all renters but are projected to account for 58% of the households that will owe back rent by the end of the year, according to the Philadelphia Federal Reserve.
  • The outsized burden comes due on Dec. 31, when the CDC’s halt on evictions expires.

The big picture: Fair housing laws have reduced blatant discrimination from the levels seen in the late 1960s and 1970s, but they’ve also made disparities harder to spot “when you as a renter are being discriminated against,” said Claudia Aranda, a researcher at the Urban Institute who focuses on metropolitan housing.

Studies by the institute and housing coalitions have found that landlords show more properties, and offer more incentives, to white prospective renters compared to non-white renters.

Discrimination against vouchers, which help low-income families, the elderly and the disabled access housing in the private market, also disproportionately affects people of color.

  • In 2018, over 90% of D.C. voucher holders were Black, despite making up only 48% of the city’s residents, according to the Equal Rights Center.
  • 15% of all Black renter households in D.C. used vouchers, compared to less than 1% of white renter households.
  • In New York, landlords often stood up interested tenants of color when they said they were using housing vouchers, The City reported last year. A similar phenomenon played out in Boston and in many other cities.

What to watch: Pandemic-induced evictions could exacerbate the already high levels of homelessness among Blacks, Latinos, Asians and Native Americans.

  • Latinos make up roughly 18% of the U.S. population, but they represent 22% of all people experiencing homelessness, per HUD’s 2019 annual report to Congress.
  • Among Black Americans, the figure jumps to 40%, although they comprise around 14% of the country’s population.

The bottom line: Higher rents, a diminished paycheck and the pandemic have renters of color on a downward spiral that affects opportunities in other areas of their lives.

  • “Ultimately, this is about the choices that people have, and how the housing that we have access to may limit our ability to access other things: better schools, transportation and jobs,” Aranda says.