Most apartment dwellers have kept up with their rent payments so far.
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The National Multifamily Housing Council (NMHC) found that 80.2% of apartment households made a full or partial rent payment by May 6 in its recent survey of 11.4 million units of professionally managed apartment units across the country. The data comes against the backdrop of a historic surge of unemployment in April.
The rent payment data reflects a 1.5 percentage point decrease in the share who paid rent through May 6, 2019 and compares with 78% percent who had paid by April 6, 2020. The data encompasses a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price.
“Despite the fact that over 20 million people lost their jobs in April, for the second month in a row, we are seeing evidence that apartment renters who can pay rent are stepping up and doing so,” said Doug Bibby, president of NMHC. “We expect May to largely mirror April, when the payment rate increased throughout the month as financial assistance worked its way to people’s bank accounts.”
The U.S. economy lost a record 20.5 million jobs in April, the Bureau of Labor Statistics reported Friday, which is the most sudden and largest decline since the government began tracking the data in 1939.
Bibby said, “We are in uncharted waters and will be watching this closely over the course of the month as millions of households will not be able to access unemployment benefits, and those who have may find that they are not enough to cover rent plus all the other financial pressures caused by this crisis. Those benefits will also likely fall short in high-cost areas. That’s why we are calling on Congress to include $100 billion in direct renter assistance in the next pandemic relief package.”
Many renters are facing a financial bind because the $2 trillion federal rescue package gives fewer protections to residents in multifamily housing than it does for homeowners. The CARES Act stimulus package requires mortgage servicers to provide forbearance — a temporary postponement of payments — to any homeowner with a federally-backed mortgage.
“When millions of renters found themselves sheltering in place at their apartment home, apartment firms made it a priority to help them retain their housing,” said NMHC Chairman David Schwartz. “NMHC called on apartment firms to halt evictions for residents impacted by COVID-19, waive late fees and create payment plans for them and also avoid rent increases for 90 days to help residents weather the crisis. Many took up that call, and others went even further to help their residents. However, we can’t do it alone. We need Congress to help.”
Bibby added, “The cascading effect of any rent gap is meaningful. Apartment owners have $1.6 trillion in outstanding mortgage debt. If they can’t cover their debt, we might see a wave of multifamily foreclosures that could rival the single-family foreclosures that occurred during the Great Recession. In addition, apartment owners pay $58 billion in property taxes that help support essential services such as schools, emergency services and other important local needs.”
The NMHC Rent Payment Tracker metric provides insight into changes in resident rent payment behavior over the course of each month, and, as the dataset ages, between months. While the tracker is intended to serve as an indicator of resident financial challenges, it is also intended to track the recovery as well, including the effectiveness of government stimulus and subsidies.