As eviction moratoriums are lifted across Australia, hundreds of thousands of renters could lose their homes in a wave of ‘Covid evictions’.

Covid-19 caused a very uneven recession. Low-income households and people in insecure work faced worse impacts than others. In addition, they had less financial resilience to begin with. Many of these people rent their homes.

Although governments introduced some renter protections, they were generally non-interventionist. In particular, they did not take adequate steps to protect renters from rental debt. Most landlords continued to demand full rent payments, pushing renters into debt. We estimate this is between 324,000 and 973,000 renters.

To help us understand the dynamics of rental debt, we propose three archetypes. The renters at risk of losing their homes are renters with “debt at the door”. We also identify renters who have avoided rental arrears by accruing debt elsewhere, those with “debt in the mailbox”. Finally, some renters have dodged debt so far, using up their financial reserves. With these reserves depleted, these renters now face “debt in the wings”.

Governments have a responsibility to support indebted renters to stay in their homes. To achieve this, governments should cancel all rental debt. They can do this by buying debt from landlords at a reduced rate and then declining to claim that debt from renters. This is the simplest means of preventing Covid evictions, and a needed response to an economic crisis that has put so much pressure on renting households,
even as they made sacrifices in the interest of public health.

Government choices will determine how Australia emerges from this crisis. We could have a long-tail of suffering, where marginalised Australians end up scarred, their lives thrown into turmoil. Or governments could take responsibility to guide us all safely through this crisis, protecting household well being just as they protected us from the health risks of the virus itself.

You can download the full report here in pdf format.