The share of nationwide apartment renters who can’t make their payments is rising.
As of this week, almost 23% of residents had missed all or part of their July rent payments, according to the National Multifamily Housing Council.
That’s down from early in the pandemic when fewer renters skipped their payments in the first week of April. In early April, almost 83% of renters had made their rent, researchers at the trade group of major apartment building owners found.
“Rent payment slowdowns in areas where COVID-19 cases are spreading especially rapidly don’t appear to have been impacted — at least not to date,” said Adam Couch, market analyst with RealPage in Richardson, Texas. “The collections rate comes in at roughly 86% across Texas and about 85% in both Florida and Arizona.
“Those figures are above the U.S. norm,” he said. “While results are down about 3 percentage points year-over-year in each location, that’s roughly in line with the decline recorded for the country as a whole.”
With millions and millions of job losses around the country, apartment owners and operators have been closely watching renter payment rates.
So far federal unemployment payments and other state and local incentives have kept the number of tenant evictions from exploding.
But apartment industry leaders worry about what will happen as some of the unemployment benefits expire and fewer renters are able to keep up with their monthly payments.
“It is clear that state and federal unemployment assistance benefits have served as a lifeline for renters, making it possible for them to pay their rent,” Doug Bibby, president of the National Multifamily Housing Council, said in a statement. “Unfortunately, there is a looming July 31 deadline when that aid ends.
“Without an extension or a direct renter assistance program, that National Multifamily Housing Council has been calling for since the start of the pandemic, the U.S. could be headed toward historic dislocations of renters and business failures among apartment firms, exacerbating both unemployment and homelessness.”
Another apartment renter survey by Apartment List estimates that more than 30% of residents in rental properties hadn’t yet made July rents.
“Missed payments continue to concentrate among renters, young and low-income households, and residents of dense urban areas,” the Apartment List survey found. “This is the highest non-payment rent since we began running this survey in April.
“Fears around evictions and foreclosures have also worsened, and more Americans today are considering a move as a result of the pandemic.”