The rental market is standing on shaky ground, threatening to send millions of renters into eviction over the next several months and leaving U.S. landlords short billions of dollars.

Making matters worse, more than 24 million individuals nationwide have experienced unemployment since the pandemic emerged full throttle in the U.S. in March 2020. A dizzying number of renter households, including more than 239,000 in California, have gone into debt as a result of the pandemic and have been unable to pay some or all of their rent since then.

Still, unemployment has bored through state and federal economic protections. California Governor Gavin Newsom issued a statewide moratorium on evictions, lasting through January 31, 2021. Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, which expanded unemployment insurance (UI) and doled out a $1,200 stimulus check. Nevertheless, unemployment hangs at 8.3% and the protections in the CARES Act are set to expire on December 31, 2020.

Related Article: AB 3088: New eviction protections to last through January 2021

What of the countless Californians vulnerable to eviction once protections end in January? A recent study by the Federal Reserve of Philadelphia shows 239,619 renter households are likely in rental debt right now. Across the nation, 30 to 40 million people could face eviction as individual states’ moratoriums expire.

In California, any rental debt accrued during the moratorium will still be owed to landlords once the moratorium expires. Those 239,619 indebted California renter households are likely to owe a combined $1.66 billion in debt by December 2020, accumulated since the state first felt the full effects of the pandemic in March. The debt averages out to $6,953 per household.

And that’s not all. The Philadelphia Federal Reserve study also shows that credit payments to businesses connected to real estate jumped by more than 70% between Spring 2019 and Spring 2020. That figure fell to 50% in Fall 2020 compared to Fall 2019 — still well above the norm. This worrying trend signals low confidence in consumers’ abilities to make their monthly housing payments.

Despite government intervention, the fallout from missed rental payments looms large over U.S. renters and landlords alike.

What, me worry?

The Philadelphia Federal Reserve study highlights the need for immediate course correction. But Washington lawmakers continue to spar over which way to steer the ship.

A second stimulus bill, stalled for months in the nation’s capital, would provide temporary but long overdue economic relief to the hardest hit: renters and small landlords. And by increasing UI benefits, renters would be able to make some progress on rent.

It’s also high time California extended the moratorium eviction beyond January 2021. Currently, the protections in place allow for partial rent payment between September 2020 and January 2021, which keeps renters safe in the short term. After that, renters may be facing eviction and homelessness.

What can renters and landlords do without any future help in sight from the government? Work out a payment plan. Some renters and landlords are opting for partial payments until a vaccine is widely distributed. Far from a perfect compromise, landlords and renters will need to be flexible if either hopes to return to a sense of economic health and normalcy.

As real estate professionals, California agents and brokers have a front row seat to 2020’s economic carnage. While the full economic impact won’t be understood until after the pandemic and recession, it’s clear that government intervention has largely failed. It’s time to expand protections for California’s most vulnerable residents.