Nearly 240,000 renter households in the state have fallen behind on rent, with an average debt of $6,953 per household.
California’s back rent is projected to reach nearly $1.7 billion by the end of the year, or almost a fourth of the total rental debt nationwide, a Federal Reserve study found.
Under the state’s eviction moratorium, landlords can pursue that debt through small claims courts next spring if their tenants fail to repay it by then.
In all, nearly 240,000 renter households in the state have fallen behind on rent, with an average debt of $6,953 per household, the study by the Federal Reserve Bank of Philadelphia found.
Nationwide, renter debt is projected to hit $7.2 billion by the end of December. The Philadelphia Fed determined 1.34 million American households will owe an average of $5,400 apiece in unpaid rent.
Even though eviction moratoriums help renters keep their homes, Green added, it does nothing to protect their credit scores — possibly making it harder for them to rent their next home down the road.
“Their FICO scores are going to take a hit,” Green said. “How are you going to be able to evaluate people’s credit as you think about underwriting them as tenants? Are you going to look at FICO they way you’ve looked at it before? (Or) are you going to be looking at other things?”