This family of four is hoping GoFundMe will save it from eviction - similar fundraisers have increased 40% since the pandemic

By Zoe Han

Rents aren't growing as fast as they once were, but they're stuck at a level where many Americans can't afford them

A previous version of this story mischaracterized Michelle Lau's medical treatment for COVID-19.

Michelle and Ken Lau's struggles to pay rent began in 2021, when they both came down with COVID-19, resulting in hospital and ER bills. Nearly four years later, they've hit a breaking point. They need to raise $10,000 by the end of the month to avoid being evicted from their Las Vegas home, and they're hoping a GoFundMe fundraiser will provide the windfall they need.

"We've been scrambling and juggling, and doing the GoFundMe is the last resort," Michelle Lau told MarketWatch. "We don't have money to spend, and we don't have enough for our bills."

The Laus are among a growing number of Americans who have turned to the online fundraising site recently in an attempt to avoid eviction. GoFundMe has seen a 40% increase in eviction fundraisers compared with prepandemic levels, a company spokesperson said. More than 14,000 eviction-related fundraising campaigns were launched between January and May this year, up from around 10,000 during the same period in 2019.

The uptick in people seeking donations to avoid eviction comes as the U.S. housing market has become increasingly unaffordable for would-be home buyers and as tenants have faced soaring rents. America's affordable-housing crisis has hit a tipping point, advocates say.

It's clear that Americans turning to GoFundMe are feeling the effects of that affordability crisis, Margaret Richardson, GoFundMe's chief corporate affairs officer, told MarketWatch in an email. Some of the eviction-related fundraisers launched this year were created by families forced out of homes they had lived in for decades after the property changed hands, while others were from families behind on rent because of layoffs or health issues.

While Michelle Lau's chronic illnesses have kept her from working, Ken Lau worked a job in the heating, ventilation and air-conditioning industry until a business slowdown led to his layoff in February, shortly before their second child was born.

The couple's current rent is $1,700 a month. Their landlord was understanding at first when they couldn't pay, and they had hoped to eventually make enough income to pay the $10,000 in back rent they owe. But then their landlord said she could no longer wait, telling the Laus that their late rent was negatively affecting her own finances.

On the other side of the country, Chad Matarizzo has also turned to GoFundMe to stave off eviction.

Matarizzo, who has experienced mental-health challenges, lost his customer-service job in early May and hasn't been able to pay his $200 weekly rent for a room in a house with several roommates in Durham, N.C. The room is just big enough for a twin-size bed, Matarizzo said, but it was all he could find after a $500 monthly rent increase forced him out of a previous apartment he shared with a friend.

Unable to find a job, he set up the GoFundMe fundraiser at the encouragement of a friend. He's hoping to raise $3,000, not only for rent, but also for food and essentials such as toilet paper. As of Monday afternoon, Matarizzo had raised $281 of his $3,000 goal.

"I want to work, but I also need help," Matarizzo said. "That's the hardest part - it's asking for help, because I never want to be that person [on the street asking for money]."

While Matarizzo and the Laus were still far from achieving their fundraising goals when MarketWatch interviewed them, Josh Hollis, a father of two in Atlanta, successfully raised about $3,400 on GoFundMe to pay his back rent. He was laid off from his role at a software-development company last November and has been on the job hunt ever since, he told MarketWatch.

For a while, Hollis rented a car to drive for Uber (UBER), but he recently stopped because requests for rides in his area started to slow down significantly, and it was expensive to rent a car every week. Earlier this month, when he was several days late with his rent, the company that owns his apartment building sent him a notice saying it was starting the eviction process. He also received a notification saying the landlord would be charging him $300 to initiate eviction proceedings.

After receiving donations from strangers as well as neighbors and friends, Hollis said he now has one less thing to worry about. "I'm going to pay my rent, and I'm just really going to focus on getting a full-time job," he said.

The rent is 'too damn high'

For tenant organizer Tara Raghuveer, the increase in eviction-related GoFundMe campaigns is yet more evidence that the rent "is too damn high," and has been for too long. "We are well beyond a tipping point," said Raghuveer, who runs a local tenant union in Kansas City, Mo., and serves as director of the Tenant Union Federation, a national group. "Tenants are not OK."

Tenant advocates like Raghuveer say the affordability crisis has made renters more vulnerable than ever, and they're calling for more protections on a national level to regulate rent and protect tenants from rent increases.

Nationwide eviction trends are difficult to track because data must be collected from local courts or surveys. The Eviction Lab at Princeton University, a group of researchers that tracks evictions in cities across the U.S., found that eviction filings increased between 2022 and 2023 in 25 of the 32 cities for which complete data were available. "In many ways, 2023 represented a return to the status quo. Overall, eviction caseloads returned to prepandemic levels," the researchers wrote in a recent report.

Rents soared during the pandemic, far outpacing wage increases in most major cities, according to Zillow (ZG). The median rent nationally in May was $2,036, per Zillow, up 3.4% from the same month last year. The typical rent in May 2019 was $1,510; in May 2015, nearly a decade ago, it was $1,284.

While rent increases have slowed somewhat from their pandemic-era frenzied pace, rents are now stuck at a level that people in many cases can't afford unless they make well over $100,000 a year.

The huge increase in rents over the past few years has made it more difficult for people to move or buy their first home, said Shamus Roller, executive director of the National Housing Law Project, a national nonprofit housing-affordability advocacy group.

Housing is generally considered affordable if it costs no more than 30% of a person's gross income. To comfortably afford the typical rent in May, a renter would need to earn at least $81,446 a year, according to Zillow. In comparison, the median household income nationally in 2022 was $74,580, government data show.

Renters are resorting to resources like GoFundMe because rent is eating up a huge chunk of their incomes, Roller told MarketWatch. "It's very difficult to find the money to pay rent, [and] once you do pay your rent, you have very little money left over for the other things that you need to do in your life," he said.

From the archives (January 2024): More renters than ever now spend too much of their incomes on housing, Harvard study finds

Across the country, private companies have increasingly been buying real estate from small landlords, which has helped push up rents in local markets, Raghuveer said. The pandemic created both health and financial crises for many households, though many renters were protected by eviction moratoriums that have since expired. As rents have gone up, so have Americans' other expenses - including for groceries, automobile insurance and fast food.

'Hoping for a miracle'

Since Ken Lau was laid off, the Lau family has relied on unemployment benefits, Medicaid and government food assistance. Ken Lau also donates plasma twice a week; on a good week, that brings in $100, but sometimes it's only $60.

The family has been stuck in a dead-end cycle, Michelle Lau said. The job openings her husband has found either don't pay as much as his unemployment benefits, she said, or they pay too much to allow the family to receive government benefits - but not enough for them to get by.

They've missed three months of car payments and had their electricity cut off once because of overdue payment. Michelle Lau says her wardrobe consists mainly of three to four pieces of maternity clothing she bought three years ago before giving birth to her son. "Those are literally the only outfits that I wear," she said.

To help make ends meet, they look for free items in a local "buy nothing" group, and they actively seek out all sorts of free "banks" - diaper banks, food banks and pet-food banks - to keep everybody under their roof fed.

Right now, the Laus' housing situation remains up in the air. Their $1,700 monthly rent is much lower than the current market rent in the Las Vegas area, because their landlord had been kind to them, Michelle Lau said. A similar listing in the area would now cost at least $2,000 to $2,500, she noted.

If they were evicted, the family wouldn't be able to afford a new place, Michelle Lau said. Even if she and her husband pulled together enough money to avoid eviction, she said she doesn't know if the landlord would renew their lease at this point.

As of Monday afternoon, the family's GoFundMe fundraiser had brought in $2,040 of its $10,000 goal.

"It's just hard to feel so deep in a hole," Michelle Lau said, adding that the family hasn't figured out a backup plan yet. "We're definitely always hoping for a miracle, but I don't really know what else we can do rather than to just talk to [the landlord] and hope for the best."

Have housing costs affected your financial well-being? MarketWatch would like to hear from readers who want to share their experiences. You can write to us at readerstories@marketwatch.com. A reporter may be in touch.

-Zoe Han

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06-19-24 1227ET

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