Does Unemployment Count as Income in Rental Housing?

Does Unemployment Count as Income in Rental Housing?

Does Unemployment Count as Income in Rental Housing?

SHARE:

The rental housing industry often feels the ripples of economic change in a direct way. Move outs, unpaid rent, late notices, subletters or roommates, and even evictions can have unintended consequences to long-term unemployment. With most businesses shuttered, many renters are facing financial insecurity due to the coronavirus pandemic.

The multifamily housing industry often feels the ripples of economic change in a direct way. Move outs, unpaid rent, late notices, subletters or roommates, and even evictions can have unintended consequences to long-term unemployment. With most businesses shuttered, many renters are facing financial insecurity due to the coronavirus pandemic.

As of this writing, over 36 million Americans have filed for unemployment benefits since mid-March, and Goldman Sachs predicts the unemployment rate could sour to 25% this year. While many are hoping to recover faster, letting mom and pops finally open for business, we should do what we in the industry do best – prepare for the long-term effects and hope for the best.

Now and within the next year, it’s likely that you’ll see more rental applicants collecting unemployment benefits, and it’s important to know what to do next.

As of this writing, over 36 million Americans have filed for unemployment benefits since mid-March, and Goldman Sachs predicts the unemployment rate could sour to 25% this year. While many are hoping to recover faster, letting mom and pops finally open for business, we should do what we in the industry do best – prepare for the long-term effects and hope for the best.

Now and within the next year, it’s likely that you’ll see more rental applicants collecting unemployment benefits, and it’s important to know what to do next.

Does unemployment count as income when verifying housing income requirements?

This is a tricky question. Technically, if your state and local laws do not prohibit discrimination based on source of income, it can be up to you to decide policy-wise if you accept unemployment funds when verifying if the applicant meets your income requirements. However, we highly recommend you treat unemployment benefits as income. This is because state, city, and even county laws change frequently. With the rising unemployment rate, applicants on unemployment will not be uncommon – and turning away applicants on unemployment during this time might not be the best P.R.

Currently, these are some of the states with source of income protections. Keep in mind this list does not account for city or county source of income protections, which are plentiful across the U.S.

      • California
      • Connecticut
      • District of Columbia
      • Maine
      • Massachusetts
      • New Jersey
      • New York
      • North Dakota
      • Oklahoma
      • Oregon
      • Vermont
      • Washington

Does unemployment count as income when verifying housing income requirements?

This is a tricky question. Technically, if your state and local laws do not prohibit discrimination based on source of income, it can be up to you to decide policy-wise if you accept unemployment funds when verifying if the applicant meets your income requirements. However, we highly recommend you treat unemployment benefits as income. This is because state, city, and even county laws change frequently. With the rising unemployment rate, applicants on unemployment will not be uncommon – and turning away applicants on unemployment during this time might not be the best P.R.

Currently, these are some of the states with source of income protections. Keep in mind this list does not account for city or county source of income protections, which are plentiful across the U.S.

  • California
  • Connecticut
  • District of Columbia
  • Maine
  • Massachusetts
  • New Jersey
  • New York
  • North Dakota
  • Oklahoma
  • Oregon
  • Vermont
  • Washington

How much does unemployment usually get?

Benefits vary widely by state. According to SavingtoInvest.com, the highest maximum weekly benefit amount is in Massachusetts at $823 for individuals to $1,234 for families. On the low end, Puerto Rico’s maximum weekly amount is $190, with Mississippi a close second at $235. Most states administer benefits for a maximum of 26 weeks (a little more than 6 months). Whether or not your applicant meets your property’s income requirements depends on what state you live in, the applicant’s unemployment allowance, and your vacancy’s rent price.

How much does unemployment usually get?

Benefits vary widely by state. According to SavingtoInvest.com, the highest maximum weekly benefit amount is in Massachusetts at $823 for individuals to $1,234 for families. On the low end, Puerto Rico’s maximum weekly amount is $190, with Mississippi a close second at $235. Most states administer benefits for a maximum of 26 weeks (a little more than 6 months). Whether or not your applicant meets your property’s income requirements depends on what state you live in, the applicant’s unemployment allowance, and your vacancy’s rent price.

The CARES Act passed on March 27, 2020, expanded on unemployment by extending compensation to independent contractors and other workers priorly ineligible. It gives an additional $600 a week of aid for up to four months. Since then, additional relief bills have been proposed and some cities and states are considering rent relief programs. While it’s uncertain if unemployment benefits will be expanded upon, if the pandemic continues and the unemployment rate continues to rise, it’s highly likely more legislation will be passed.

The CARES Act passed on March 27, 2020, expanded on unemployment by extending compensation to independent contractors and other workers priorly ineligible. It gives an additional $600 a week of aid for up to four months. Since then, additional relief bills have been proposed and some cities and states are considering rent relief programs. While it’s uncertain if unemployment benefits will be expanded upon, if the pandemic continues and the unemployment rate continues to rise, it’s highly likely more legislation will be passed.

Does accepting applicants on unemployment change the leasing process?

No. Just like with any applicant, your leasing process likely requests proof of income. For some applicants this can be a few months of bank statements or paystubs, for others, it can be unemployment documentation. To avoid Fair Housing complaints, you want your leasing process to stay as consistent and equal as possible.

As you’re navigating leasing decisions in the future, keep in mind being on unemployment doesn’t mean your applicant is a bad renter. With unemployment claims rising weekly, it’s incredibly likely your rental applicants and tenants will be affected. Make sure to stay ahead of the times by hammering out your new leasing plan and procedures now.

Does accepting applicants on unemployment change the leasing process?

No. Just like with any applicant, your leasing process likely requests proof of income. For some applicants this can be a few months of bank statements or paystubs, for others, it can be unemployment documentation. To avoid Fair Housing complaints, you want your leasing process to stay as consistent and equal as possible.

As you’re navigating leasing decisions in the future, keep in mind being on unemployment doesn’t mean your applicant is a bad renter. With unemployment claims rising weekly, it’s incredibly likely your rental applicants and tenants will be affected. Make sure to stay ahead of the times by hammering out your new leasing plan and procedures now.

What do you think? Let us know in the comments below!

What do you think? Let us know in the comments below!

Subscribe for more news and tips!

* indicates required

Share with your friends!

Share on Facebook
Share on Twitter
Share on Linkdin
Share via Email

More Articles from ApplyConnect

Tenant Screening

Can Your Tenant Legally Own An Alligator As An Emotional Support Animal?

When you think of an emotional support animal, what comes to mind? It would be fair to assume the first thought to enter one’s head would be a dog, if not some kind of bipedal mammal — and most likely not a reptilian carnivore with razor-sharp teeth.

In enters WallyGator: a five-and-a-half foot, 70-pound TikTok famous alligator with over 72,600 followers on the platform owned by Philadelphia, Pennsylvania native Joie Henney. While it is legal to own alligators in Philadelphia, that isn’t the case in many other states — nor is it likely that the majority of pet gators, if any, qualify as emotional support animals. Or is it?

Since Wally’s uptick in popularity on the internet back in August, “alligators” as a related topic to the Google search query “emotional support animal” has seen a 300% increase in search frequency, most likely for the purposes of curious internet users seeing and reading about WallyGator for themselves. However, with the increase in popularity of keeping various species of reptiles as house pets and the common need for emotional support animals, it isn’t beyond the realm of possibility that people with legitimate mental health conditions, unique cases of PTSD, or related conditions could be looking into obtaining a support gator of their own.

As we’ve previously covered, the Department of Housing and Urban Development (HUD) has provided guidance on how the Fair Housing Act (FHA) interfaces with the ADA (Americans with Disabilities Act) regarding emotional support animals. HUD classifies assistance animals into two different categories in order to distinguish their roles from one another: service animals (primarily dogs), and other trained animals that do work, perform tasks, and/or provide therapeutic emotional support for individuals with disabilities. Per HUD’s guidelines, because Wally is not a dog, he, therefore, cannot qualify as a service animal – so, how does HUD define Wally and his role, exactly?

HUD states if the service animal status is not readily apparent, to limit inquiries to two questions: “Is the animal required because of a disability?” and “What work or task has the animal been trained to perform?”, and if the answer to either question is no, then following denial of service animal status under federal, HUD states that the animal can still qualify as a support animal or other assistance animal, depending on what needs to be accommodated.

In Wally’s case, Henney received approval to use him as a support animal after expressing to his doctor he did not want to be medicated for depression following the deaths of several family members and close friends in a short period of time, and more recently, his untimely cancer diagnosis. Even before rescuing and adopting Wally, Henney has worked with and rescued reptiles (particularly alligators) for over thirty years, and his vocation is one he is very passionate about – so it stands to reason his support animal of choice would be one he’s so accustomed to working with.

Because the ADA makes the same distinction that an emotional support animal would only be classified as such due to its mere presence providing comfort as opposed to employing any training to respond to a situation, HUD’s guidelines technically, but clearly grant Wally his status as a legitimate emotional support animal under federal law.

While Wally’s status is protected in the eyes of the law, HUD also states that a housing provider can refuse a reasonable accommodation request for a support or assistance animal if said animal poses a direct threat to the health or safety of other individuals or would result in substantial physical damage to the property of other which cannot be reduced or eliminated. However, before denying such a request due to a lack of information, a housing provider is encouraged to engage in a “good-faith” conversation with the owner of the support animal to gather information about the animal and mitigate any potential misunderstandings regarding its purpose.

Luckily for most property owners, WallyGator is very much an anomaly, and most folks aren’t scrambling to obtain an emotional support gator of their very own, anyway. Henney himself calls Wally a “very special gator” (he’s trained Wally to understand commands and to keep his mouth closed around other people) and actively discourages others to adopt a pet alligator if they’re not actively predisposed to working with alligators, stating “if you don’t know what you’re doing, you will get bit”.

Check out ApplyConnect’s HUD guidance breakdown: https://www.applyconnect.com/wp-content/uploads/2020/02/Emotional-support-animals_-HUDs-Guidance-cliff-notes-AC-Version.pdf

Read More »

12 Replies to “Does Unemployment Count as Income in Rental Housing?”

  1. I would disagree on counting unemployment as “income.” It is unemployment insurance proceeds and it is limited. How can you approve someone’s ability to pay the rent when they do not have a verifiable job and income? As you mention, many people (possibly 25%) may eventually be on unemployment. Many of those jobs are not coming back. So if you include unemployment as income, then unemployment (or the Federal subsidy) runs out, and now your tenant doesn’t have income, what happens next? Eviction? That is like predatory lending, approving someone who cannot afford what they are asking. It hurts the landlord monetarily and hurts the tenant with an eviction on their record. It’s bad for everyone.

    1. You have a very valid perspective on this, Joe. If unemployment is at 20%+ though then that is still a lot of displaced people who need a home, and who do have income (unemployment) for a period of time. The middle ground is adding lease provisions to re-verify their income after a period of time, and to adjust the length of the lease for as long as it may be verified that will have income for. The hope is that renters will find stable employment before the benefits run out, but if they don’t then the lease will be up.

      This guidance isn’t intended to ignore the increased risk this places on you and your portfolio, but it’s a reality that will become more common in the next several months so being prepared for how to handle these situations can just add to the options available to work with applicants.

  2. I think that is awesome people as myself and my husband and our 4 girls are soon to be homeless and are struggling to find a place and are stressing on if my husband should apply for unemployment… The online UI one… We need this little extra income to get us into a place since I guess HUD and section 8 voucher program changed there rules a little I thought disabled getting ssi… and Homeles families with children low income based members would get bumped up the list on the top list part.

  3. Greedy landlords! make it so difficult to qualify for housing in Central Calif, rents keep moving up but salaries as if we never left the late eighties!
    We need rent control NOW or this situation will get worst, so sad to see whole families living on side of freeway ramps as rents move up monthly, but income raises stagnant perfect formula for masses of people living homeless.

    1. I hope so too!! I just had a baby, my husband lost his job due to his work closing because of covid, & our lease is up in June so I’m not sure what we would do if they weren’t counting it as income. Fingers crossed.

  4. Hello, quick question, can apartments verify if you are getting unemployment? I didn’t mention I was getting unemployment because it is so hard to get through unemployment customer service and I knew they would ask for documents. So yes my question is will they find out if I’m receiving unemployment?

    1. Hi Jaz – the short answer is that it depends. If the property performs income verifications then it’s likely they’ll be able to verify you’re receiving unemployment. If they rely on other methods that don’t go above and beyond to verify your income then you’re more likely to have more control over what sources are provided for the property to base their decision on.

    1. Hi Sharon – if you’re in a state where ‘source of income’ cannot be discriminated against then it’s likely that unemployment will count as income. If you’re in a state without those protections then it’s possible it will vary by property, and you would need to ask the property you’re applying for whether they will accept it.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Share this Article!

12 Replies to “Does Unemployment Count as Income in Rental Housing?”

  1. I would disagree on counting unemployment as “income.” It is unemployment insurance proceeds and it is limited. How can you approve someone’s ability to pay the rent when they do not have a verifiable job and income? As you mention, many people (possibly 25%) may eventually be on unemployment. Many of those jobs are not coming back. So if you include unemployment as income, then unemployment (or the Federal subsidy) runs out, and now your tenant doesn’t have income, what happens next? Eviction? That is like predatory lending, approving someone who cannot afford what they are asking. It hurts the landlord monetarily and hurts the tenant with an eviction on their record. It’s bad for everyone.

    1. You have a very valid perspective on this, Joe. If unemployment is at 20%+ though then that is still a lot of displaced people who need a home, and who do have income (unemployment) for a period of time. The middle ground is adding lease provisions to re-verify their income after a period of time, and to adjust the length of the lease for as long as it may be verified that will have income for. The hope is that renters will find stable employment before the benefits run out, but if they don’t then the lease will be up.

      This guidance isn’t intended to ignore the increased risk this places on you and your portfolio, but it’s a reality that will become more common in the next several months so being prepared for how to handle these situations can just add to the options available to work with applicants.

  2. I think that is awesome people as myself and my husband and our 4 girls are soon to be homeless and are struggling to find a place and are stressing on if my husband should apply for unemployment… The online UI one… We need this little extra income to get us into a place since I guess HUD and section 8 voucher program changed there rules a little I thought disabled getting ssi… and Homeles families with children low income based members would get bumped up the list on the top list part.

  3. Greedy landlords! make it so difficult to qualify for housing in Central Calif, rents keep moving up but salaries as if we never left the late eighties!
    We need rent control NOW or this situation will get worst, so sad to see whole families living on side of freeway ramps as rents move up monthly, but income raises stagnant perfect formula for masses of people living homeless.

    1. I hope so too!! I just had a baby, my husband lost his job due to his work closing because of covid, & our lease is up in June so I’m not sure what we would do if they weren’t counting it as income. Fingers crossed.

  4. Hello, quick question, can apartments verify if you are getting unemployment? I didn’t mention I was getting unemployment because it is so hard to get through unemployment customer service and I knew they would ask for documents. So yes my question is will they find out if I’m receiving unemployment?

    1. Hi Jaz – the short answer is that it depends. If the property performs income verifications then it’s likely they’ll be able to verify you’re receiving unemployment. If they rely on other methods that don’t go above and beyond to verify your income then you’re more likely to have more control over what sources are provided for the property to base their decision on.

    1. Hi Sharon – if you’re in a state where ‘source of income’ cannot be discriminated against then it’s likely that unemployment will count as income. If you’re in a state without those protections then it’s possible it will vary by property, and you would need to ask the property you’re applying for whether they will accept it.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More Articles from ApplyConnect

Blog Topics

Click the dropdown

Tenant Screening

Can Your Tenant Legally Own An Alligator As An Emotional Support Animal?

When you think of an emotional support animal, what comes to mind? It would be fair to assume the first thought to enter one’s head would be a dog, if not some kind of bipedal mammal — and most likely not a reptilian carnivore with razor-sharp teeth.

In enters WallyGator: a five-and-a-half foot, 70-pound TikTok famous alligator with over 72,600 followers on the platform owned by Philadelphia, Pennsylvania native Joie Henney. While it is legal to own alligators in Philadelphia, that isn’t the case in many other states — nor is it likely that the majority of pet gators, if any, qualify as emotional support animals. Or is it?

Since Wally’s uptick in popularity on the internet back in August, “alligators” as a related topic to the Google search query “emotional support animal” has seen a 300% increase in search frequency, most likely for the purposes of curious internet users seeing and reading about WallyGator for themselves. However, with the increase in popularity of keeping various species of reptiles as house pets and the common need for emotional support animals, it isn’t beyond the realm of possibility that people with legitimate mental health conditions, unique cases of PTSD, or related conditions could be looking into obtaining a support gator of their own.

As we’ve previously covered, the Department of Housing and Urban Development (HUD) has provided guidance on how the Fair Housing Act (FHA) interfaces with the ADA (Americans with Disabilities Act) regarding emotional support animals. HUD classifies assistance animals into two different categories in order to distinguish their roles from one another: service animals (primarily dogs), and other trained animals that do work, perform tasks, and/or provide therapeutic emotional support for individuals with disabilities. Per HUD’s guidelines, because Wally is not a dog, he, therefore, cannot qualify as a service animal – so, how does HUD define Wally and his role, exactly?

HUD states if the service animal status is not readily apparent, to limit inquiries to two questions: “Is the animal required because of a disability?” and “What work or task has the animal been trained to perform?”, and if the answer to either question is no, then following denial of service animal status under federal, HUD states that the animal can still qualify as a support animal or other assistance animal, depending on what needs to be accommodated.

In Wally’s case, Henney received approval to use him as a support animal after expressing to his doctor he did not want to be medicated for depression following the deaths of several family members and close friends in a short period of time, and more recently, his untimely cancer diagnosis. Even before rescuing and adopting Wally, Henney has worked with and rescued reptiles (particularly alligators) for over thirty years, and his vocation is one he is very passionate about – so it stands to reason his support animal of choice would be one he’s so accustomed to working with.

Because the ADA makes the same distinction that an emotional support animal would only be classified as such due to its mere presence providing comfort as opposed to employing any training to respond to a situation, HUD’s guidelines technically, but clearly grant Wally his status as a legitimate emotional support animal under federal law.

While Wally’s status is protected in the eyes of the law, HUD also states that a housing provider can refuse a reasonable accommodation request for a support or assistance animal if said animal poses a direct threat to the health or safety of other individuals or would result in substantial physical damage to the property of other which cannot be reduced or eliminated. However, before denying such a request due to a lack of information, a housing provider is encouraged to engage in a “good-faith” conversation with the owner of the support animal to gather information about the animal and mitigate any potential misunderstandings regarding its purpose.

Luckily for most property owners, WallyGator is very much an anomaly, and most folks aren’t scrambling to obtain an emotional support gator of their very own, anyway. Henney himself calls Wally a “very special gator” (he’s trained Wally to understand commands and to keep his mouth closed around other people) and actively discourages others to adopt a pet alligator if they’re not actively predisposed to working with alligators, stating “if you don’t know what you’re doing, you will get bit”.

Check out ApplyConnect’s HUD guidance breakdown: https://www.applyconnect.com/wp-content/uploads/2020/02/Emotional-support-animals_-HUDs-Guidance-cliff-notes-AC-Version.pdf

Read More »

Get Started with ApplyConnect!

The nation’s most trusted tenant screening for real estate agents, landlords, and property managers. No cost background checks available 24/7.

©2018 ApplyConnect. All rights reserved

ApplyConnect marks used herein are trademarks or registered trademarks of applyconnect.com. Other product and company names mentioned herein are the property of their respective owners.

Get Started with ApplyConnect!

The nation’s most trusted tenant screening for real estate agents, landlords, and property managers. No cost background checks available 24/7.

©2018 ApplyConnect. All rights reserved

ApplyConnect marks used herein are trademarks or registered trademarks of applyconnect.com. Other product and company names mentioned herein are the property of their respective owners.