The coronavirus is disproportionately hurting black and Latino renters and homeowners.

There were already racial and economic gaps in access to affordable and safe housing that existed before the coronavirus pandemic. But now those divisions are starting to widen, according to a new study by the Urban Institute.

Black Americans are being hospitalized and dying in greater numbers than other groups. And, together with Latino communities, black workers are seeing much higher unemployment rates than white workers. Now, similar disparities are emerging in housing.

“In those three big areas – health, jobs and housing – all of which have been affected by the pandemic, we’ve seen longstanding racial disparities,” said Solomon Greene, senior fellow in housing at the Urban Institute and co-author of the study. “These are structural issues that the pandemic has exacerbated.”

Black and Latino homeowners and renters were more likely to miss their payments in May than their white and Asian counterparts. They were also less likely to be confident about making their June payments, according to the study, which analyzed data released by the US Census Bureau in May.

“The findings are consistent with what we are seeing in the economic fallout overall,” said Alanna McCargo, vice president of housing finance policy at the Urban Institute and co-author of the study. “We will see a widening in existing housing disparities by race and by income.”

Outsize impact on black and Latino renters

By the middle of May, 19% of all US renters did not pay their rent, according to the analysis. But 27% of black renters and 25% of Latino renters did not pay by mid-May.

While all renters had concerns about their ability to pay rent in June, the concern was far greater among black and Latino renters. Nearly half of black and Latino renters didn’t think they could make June’s rent, while only a quarter of white renters expressed the same sentiment about their ability to pay.

Renters generally are in a more precarious situation than homeowners in this crisis, said Greene, because there are fewer federal protections in place for renters and less direct assistance.

“People are cobbling together payments because, as we have heard, the rent eats first,” said Greene. “In April, they had job losses, come May they are still struggling, doing what they can to pay rent. By June, it seems more people are unsure how they will pay the rent.”

The Coronavirus Aid, Relief, and Economic Security, or CARES, Act included a 120-day moratorium on evictions for people who live in federally subsidized housing, receive federal housing grants or vouchers or who live in properties secured by a government backed mortgage. That is set to expire on July 24. States, counties and cities have implemented similar moratoriums, some of which have already expired.

Greene said housing policies designed to support renters during this crisis should prioritize keeping people in their homes, strengthening legal protections for renters and providing more direct public subsidy.

“Extending the moratorium on evictions, and helping people transition to mediation programs with housing counselors and work out these issues will be important,” Greene said.

Protecting black and Latino homeownership

For homeowners, the CARES Act offers those with federally backed mortgages the option to enter into a forbearance program, which allows them to work with their mortgage servicer to delay or reduce their payments for up to a year.

Among all homeowners in the US, about 12% either did not pay their mortgage by mid-May or deferred payments, according to Census Bureau data. But among black homeowners, the rate of non-payment was 28%. About 15% of Latino homeowners did not pay by mid-May.

Thinking ahead to June’s rent, 27% of black homeowners had little or no confidence they could make the payment and an additional 8% said it was likely they would not pay. Among Latino homeowners, the number with low confidence about June’s payment jumped to 25%, with an additional 4% saying they likely would not pay.

Homeownership is the most direct route to increasing wealth for black and Latino Americans, said McCargo, and there were already several barriers along the way before the pandemic.

While the number of Latino homeowners increased slightly between 2000 and 2017, black homeownership dropped by nearly 5%, according to a separate report by the Urban Institute.

Black homeowners tend to buy less expensive first homes and take on greater debt and they also typically buy homes later in life, which limits the amount of equity in the home that they have at retirement, the report found. They are also more likely than other groups to become renters again after owning a home, according to the report.

“All housing policy right now should be about keeping people in their homes,” said McCargo. “For black and Latino families, the majority of their wealth is in home equity. That is the asset that allows for the most wealth building and the preservation of that is critical.”

She said the federal law offering forbearance to some homeowners doesn’t go far enough.

“We need to make sure they can get the loan modification, reduce their rate, and keep the property,” said McCargo. “We don’t want to let a crisis go to waste. All the bad in this definitely creates the opportunity to do something better.”