More than half of residential tenants are currently struggling to pay their rent, largely as a result of the COVID-19 pandemic, according to a new survey of property managers released by real estate technology company Snappt. One-quarter of these residents are paying late, while 17% pay less than full rent and 11% have stopped paying altogether.
Respondents to the 2020 Effects of the COVID-19 Pandemic on Residential Rentals Survey reported that evictions have risen by 75% since the start of the COVID-19 pandemic, with a current eviction rate of 21%. Many of these evictions are on hold until moratoriums expire; a typical building has a backlog of 15 evictions.
According to Daniel Berlind, CEO and co-founder of Snappt, one in four of the evictions in progress are associated with application fraud, in which applicants have altered financial documents, such as pay stubs or bank statements, in order to rent an apartment. “The survey shows that nearly a third of applications now exhibit application fraud,” says Berlind. “That represents a nearly doubling since the pandemic hit.”
Eighty-five percent of respondents reported that they had been a victim of application fraud this year, up from 66% last year, and estimate that one in four fraudulent applications passes undetected, up from one in 10 last year. Between an increase in application fraud and tenant struggles to pay rent, Snappt estimates that the COVID-19 pandemic has cost the typical building $71,500 since March 2020.