A recent report from the Federal Reserve Bank of Boston finds that rural New England communities suffered larger economic losses due to the COVID-19 pandemic relative to nearby urban centers and rural counties across the United States. This will heavily impact Vermont renters amidst the current trends of rising rental prices and decreasing supply of affordable rental units.
While rural areas across the country tended to have more COVID-19 cases per capita than urban areas, the number of cases in rural New England was lower than the region's cities relative to the population as of January 2021. Despite this, rural counties in New England have seen a similar drop in employment to their urban counterparts. Between January of 2020 and January of 2021, there were 6.1% fewer employed workers in rural areas compared with 7.4% fewer in urban settings. This figure is more striking when comparing it to drops in employment nationwide: 3.1% in rural areas and 5.8% in urban ones.
The effects of the pandemic were not felt equally across Vermont, either. Rural areas of the state like Lamoille County and Orleans County saw peak unemployment rates in April of 2020 of 23.1% and 21.6%, respectively. The more urban Chittenden County, meanwhile, had its unemployment rate increase to only 12.4%. Since then, while the official unemployment rate has declined, the share of employed workers counted in the labor force has remained lower than normal. Between January of 2020 and January of 2021, Chittenden County saw a drop in employed workers by 9.9% while Lamoille and Orleans Counties' losses were 12.9% and 11.2%. respectively. Rural Vermont counties have larger shares of workers in the hospitality and tourism industries, which have been heavily impacted by the pandemic.
In 2019, the average monthly rent in rural areas of the state was $822, which represented 34% of income for the average household. For comparison, the average rent cost for the urbanized Burlington-South Burlington area was $1,129, or 39% of average household income. However, 40% of renter households in rural areas and 41% in urban areas of Vermont are similarly cost-burdened. Therefore, even though rural renters are paying fewer dollars in housing expenses than urban communities, they pay nearly as much of their overall household income.
Pandemic related job-losses, unfortunately, will only exacerbate ongoing trends in unaffordability. Since 2000, both rural and urban areas in Vermont have seen a roughly 23% increase in the average rent-to-income ratio, meaning that these housing costs have been steadily consuming a larger share of a renter's household income. This is a greater increase than the rest of New England except for rural Massachusetts. The region's growing rent-to-income ratio can be attributed to stagnating income levels from 2000-2010 coinciding with increasing rent prices. From 2010-2019, income growth began to outpace the rise in rents, but not enough to return Vermont to pre-2000 rent-to-income ratios.
The shortage of affordable homes inevitably impacts low-income households more than other income groups. In 2000, a New England renter household needed to earn at least $25,000 (in 2019 dollars) or else they would experience a shortage of apartments considered affordable to them. In 2019, that number has risen to $36,000. In fact, for every 100 households earning $30,000 there were only 83 affordable apartments. It's very possible that this number will continue to decline given the recent surge in demand for Vermont homes by out-of-state buyers.
The Federal Reserve Bank of Boston's report finds that "...as a result of pandemic-related unemployment, about 30 percent of renter households in New England were at risk of missing a housing payment if they did not receive any financial assistance." Congress has passed several stimulus bills to support those who have been economically harmed by the pandemic such as the CARES Act and the American Rescue Plan Act. Some of these packages include funding for rental assistance. If you or anyone you know is experiencing financial hardship as a result of the COVID-19 pandemic and rent costs, you can find more information on the Vermont Emergency Rental Assistance Program here.