The National Multifamily Housing Council’s weekly Rent Payment Tracker data shows that 80.8% of renter households had made a full or partial rent payment by June 6. This presents a 0.7 percentage point decrease from the share of renters who made a payment between June 1 and June 6, 2019, but a .06 percentage point increase from the share of renters who made a payment between May 1 and May 6, 2020.
The Rent Payment Tracker data draws from 11.5 million professionally managed market-rate properties in the U.S., in cooperation with the tracker’s data partners: Yardi, ResMan, CoreLogic, Entrata, and MRI Software. However, it does not include subsidized properties, affordable housing, or properties owned by smaller landlords.
“These are trying times for the country, and we are reminded on a regular basis how crucial safe and secure housing is during a period of uncertainty and upheaval, so we are glad to see that residents who live in professionally managed properties continue to pay their rent,” says Doug Bibby, NMHC president. “While our Rent Payment Tracker metric continues to show the resilience and strength of the professionally managed apartment industry, it does not necessarily tell the whole story, as it doesn’t capture rent payments for smaller landlords or for affordable and subsidized properties, and according to Harvard, more than half of renters with at-risk wages due to the pandemic live in single-family and small multifamily rentals with two to four units.”
In the U.S. Census Household Pulse Survey, which covers all rental households, 82.4% of respondents reported they would be able to pay their rent on time, 15.8% said they would not be able to pay, and 1.8% had deferred their rent. On that number, one-third reported no or slight confidence that they could pay their rent the next month.
According to Jeff Adler, vice president of Yardi Matrix, the biggest issue of the moment is not overall collections, but the “general rolldown” in rents. Yardi has observed year-over-year rent decreases of -0.6% to -1% in major metropolitan areas across the country, including San Jose, Houston, Orlando, Denver, Los Angeles, San Francisco, and Chicago. He notes an “ongoing reduction” in asking rents for new leases, with occupancy and rent cuts especially pronounced on the West Coast. Elisabeth Francisco, president of ResMan, estimates that revenue has fallen by $100 per unit, owing to concessions, repayment plans, and rent reductions.
Class C apartment rent collections performed approximately 10 percentage points below higher asset classes in May, following two months of performing only 5 percentage points lower. This, according to Greg Willett, chief economist at RealPage, points to emerging financial struggles among Class C unit residents.
A growing concern among representatives from NMHC’s data partners was the rise in renters using their credit cards to pay rent. The portion of renters paying with credit cards grew to 17% in April, higher than at any point over the last 12 months, and has held steady since. While Francisco is confident that renters are prioritizing their rent payments, she is concerned about what may happen when expanded unemployment benefits end. “If the assistance is working, we should find a way to continue it,” Francisco says.
“There are serious signs of economic dislocation outside of our reporting universe that underscore the need for Congress to pass a direct rental assistance program and extend unemployment benefits before it’s too late,” Bibby adds. “According to the Harvard Joint Center for Housing Studies, nearly a fifth of households with at-risk wages in small multifamily apartments may have difficulty paying rent. In addition, 32% of renter respondents to the Census Bureau’s Household Pulse Survey reported no or slight confidence in their ability to pay next month’s rent.”