(Illustration by iStock/Ceydakocaturk)
Renters’ racial and ethnic backgrounds can affect how and where they find a new home and how much help they get from family and friends to do so, a new study shows. This factor can make renting a new place more or less affordable for those at the lower end of the income spectrum, amplifying economic inequality across racial groups.
Steven Schmidt, a postdoctoral fellow in sociology at the University of Southern California, looked at the pricey rental market in Los Angeles by interviewing 69 low-income white and Latino families in three neighborhoods across the metro area: Mar Vista, Canoga Park, and North Hollywood.
Renting a home in these places is expensive for the families in the study, which all make less than $47,000 per year—below the very-low-income threshold for a family of three in Los Angeles, according to the US Department of Housing and Urban Development—and have at least one child living with them. They paid, on average, $2,900 to sign a lease for their current home, including a security deposit and first month’s rent. The study’s most surprising finding, Schmidt says, is how much money it costs to complete a move and how renters turn to expensive loans, such as from payday lenders, to come up with the money required.
Schmidt found that low-income white families seeking to move had access to more resources. Their own parents were more likely to be middle-class or even working-class homeowners and had the capital and credit to cosign a lease for them, give them the money to pay deposits and fees, or allow them to move in temporarily, even rent-free, to save up for a move into their own place. Low-income Latino families in the study, however, “really struggled to put together the money” to rent a home, even though they received more family support overall than the white families, he says. “Given the high cost of housing in LA, families really lean on their social ties for money.”
The research builds on existing literature examining how “movers’ social ties influence residential segregation, as renters receive information about homes located near friends and family,” Schmidt writes. What’s new is his focus on how these social networks help during a move itself.
In his interviews, Schmidt found that both groups of renters turned to their networks for help. The white families were more likely to have relatives who could cosign leases, which enabled them to move into a broader range of buildings and to complete their move without incurring obligations to friends and acquaintances that they would have to pay back quickly. They more often received outright gifts of money that they could use to pay deposits and didn’t have to turn to payday lenders or other costly forms of debt. If they doubled up with other families, they did it as a short-term strategy to save money and soon applied these savings toward a deposit on their own lodging.
The Latino families were able to get what he called “constrained support—referrals to open units, loans to cover moving costs, and informal rental opportunities.” These families consequently accessed lower-quality housing situations, including moving into doubled-up accommodations with others. These informal arrangements can lead to conflict between the various families sharing a living space, which in turn sparks more instability in housing as people get forced out or suspicious owners start asking questions about unexpected long-term guests.
Many of the Latino interviewees’ undocumented status and low or no credit scores left them vulnerable to predatory landlords who demanded higher deposits to overlook their lack of papers. While the white renters in the study often had poor credit, they did not have immigration issues, which can preclude a family from getting a lease.
“Schmidt’s findings broaden our understanding of the causes of housing inequality by calling attention to an otherwise invisible set of dynamics shaping the housing outcomes of low-income renters,” says Anna Reosti, research professor at the American Bar Foundation. “His work demonstrates how differences in the resources of renters’ social networks impact the type of assistance they have access to from family and friends during their housing search, which can be very consequential in either broadening or narrowing what are already a very constrained set of housing choices for poor renters.”
This study also helps explain the importance of housing-search costs, including “the proliferation of application and move-in fees,” in making renting unaffordable, she says.
Find the full study: “Finding a Home during the Affordable Housing Crisis: How Social Ties Shape Renters’ Housing-Search Outcomes” by Steven Schmidt, American Sociological Review, vol. 90, no. 1, 2025
Read more stories by Chana R. Schoenberger.