Rent Debt Methodology

This document describes our previous methodology for estimating the number of renter households behind on rent and the total and per household rent debt for the United States and selected counties, regions, and states, as presented in the Rent Debt Dashboard prior to August 30, 2021.

Our rent debt estimates are based on three sources of data:

  1. Household rent and income data from the 5-year 2019 American Community Survey (ACS) summary file and microdata.

  2. Data on households behind on rent from the U.S. Census Bureau’s Household Pulse Survey for states and the 15 largest metros. The Pulse survey is generally updated every two weeks. We rely upon the Pulse microdata, which is released two weeks after the tabular data is released. The most recent Pulse data is for the week of June 23 - July 5, 2021.

  3. Distribution of rent arrears estimates derived from the University of Southern California’s Center for Economic and Social Research’s “Understanding Coronavirus in America” panel survey, which has been collected between April 2020 and June 2021. 

We use the share of households behind on rent from the Census Household Pulse survey and the median contract rent paid by households from the American Community Survey, both broken down by income bracket, to determine the total amount of monthly rent owed by households behind on rent. We then multiply these monthly figures by the average number of months that households are in arrears based on the USC Understanding Coronavirus in America survey, which is 3.8 months, to estimate total rent debt.

The process and data are further described below:

Household Pulse Survey data is filtered to include only renting households paying a non-zero rent in the most recent survey wave. Those households are assigned a rent status based on their response to the survey question: “Is this household currently caught up on rent payments?” The percentage of households in rent arrears – the “behind rate” – is calculated by household income category and by geography. Households are initially grouped into three income categories: those with an annual income less than $50,000, those with an annual income between $50,000 and $100,000, and those with an annual income greater than $100,000. Pulse estimates are available for all 50 states and for the 15 largest metropolitan regions in the US. For geographies where regional data are available, we use regional estimates of behind rates; for geographies where regional data are not available, we use statewide estimates of behind rates. If the unweighted count of observations for a given income category within a metropolitan region falls below 100 in the most recent Pulse survey wave, statewide behind rates are used for households in that income category in that metropolitan region instead. If unweighted counts of statewide observations fall below 100 for either of the top two income categories but the two categories combined have more than 100 observations, a single rate is used for both of the categories. If unweighted counts of statewide observations fall below 100 for the top two income categories combined or for the lowest income category, a single behind rate is used for all households in the state. If a state has fewer than 100 unweighted observations, we exclude that state from the analysis based on insufficient data. We are currently able to provide data for 40 states (all except Arkansas, Delaware, Maine, Mississippi, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming).

To estimate rent debt at the county level, we apply the percentages of households behind on rent at the state or regional level (when available) to the county-level ACS data on median monthly contract rent by income bracket. We use median rent (rather than mean rent) based on the assumption that renters who are behind on rent are likely to have lower monthly rent than the average for each income bracket. Estimating median monthly contract rent by income bracket was straightforward for states, regions, and larger cities and counties as they could be drawn directly from the ACS microdata. For smaller cities and counties not identified in the ACS microdata, however, we developed an approach that relied primarily on the ACS summary file with some inputs from the microdata. 

Specifically, we drew information from Table B25122 of the ACS summary file on the number of households by income bracket gross rent bracket and utilized a Pareto interpolation procedure to estimate median monthly gross rent for each of the aforementioned income brackets in each geography. This procedure required an upper bound for the top gross rent category ($2,000 or more), which is not provided in Table B25122. To adjust our estimate to reflect median contract rent (rather than median gross rent, which includes the cost of utilities), we also needed an adjustment ratio to apply to our resulting Pareto estimates. 

We estimated these data inputs for each of the smaller city and county geographies using ACS microdata for the Public Use Microdata Area (PUMA) or PUMAs they intersect. This was accomplished using population-based crosswalks we developed between 2010 PUMAs and 2010 counties, and between 2010 PUMAs and 2010 census-defined places (which include all cities), by taking a population-weighted average of the PUMA-level measures for each smaller city and county geography. Following this approach, we estimated the maximum gross rent, median gross rent, and median contract rent for overall and for each income bracket. The estimated maximum gross rent is inputted into the Pareto interpolation procedure to estimate median gross rent by income bracket for each of the smaller city and county geographies. Those initial estimates were then adjusted to reflect median contract rent by multiplying by the ratio of median contract to gross rent from the PUMA-based estimates. The approach seeks to utilize as much geographically-specific information from the ACS summary file as possible and substitutes in less geographically-specific information from the ACS microdata as necessary. 

We assume that differences between reported rents from the 2019 5-year ACS (which reflect a 2015-2019 average expressed in inflation-adjusted 2019 dollar values) and 2020 actual rents are negligible for households that have not moved in 2020, as those households were likely locked into pre-pandemic leases and/or month-by-month agreements with fixed/stable rents. The total amount of monthly rent owed by behind households is then calculated by multiplying estimated median monthly rent for each income category by the number of Pulse households in that income category and summing those values for each geography (city or county). Regional and statewide estimates are produced by summing estimates from their constituent county geographies.

These figures are converted to total rent debt by adjusting based on our estimate that households were, on average, 3.8 months in arrears. There is no source of data on the distribution of rent arrears among behind households, so we estimated this distribution based on the University of Southern California (USC) “Understanding Coronavirus in America” panel survey from April 2020 through June 2021. Restricting the sample to renter households that were recorded at some point during each of the fifteen months from April 2020 to June 2021 and determining a household’s behind status in each month based on their response closest to the end of the month, we measure how many months each household reports not paying their rent. Using this method, we found that approximately 28 percent are one month behind, 22 percent are two months behind, 15 percent are three months behind, and the remaining 35 percent are more than three months behind.

As the Center of Budget and Policy Priorities has duly noted, there are reasons to believe that the Pulse data underestimate the overall percentage of renter households behind on rent as well as the share who have some of the characteristics we report on (e.g. the percentage people of color, low income, unemployed, and who have lost employment income during the pandemic). Beginning with the late-August 2020 survey, additional questions were added which led more respondents to skip questions toward the end of the survey including the housing questions. Due to longstanding inequities, the same groups that are more likely to be behind on rent are also less likely to respond to all the questions on the survey.