Though apartment renters have essentially kept up with rent payments to date, about 32% of U.S. renters have little to no confidence in their ability to pay next month, according to the U.S. Census Bureau’s Household Pulse Survey.
The survey, which gauges renters’ sentiment about future ability rather than trailing data, was highlighted by industry experts during the National Multifamily Housing Council’s weekly Rent Tracker webcast on May 22. Of the more than 77 million respondents to the Census survey, 13.4% reported no confidence in their ability to pay rent, 18.3% reported slight confidence, 25.3% reported moderate confidence and 37.6% reported high confidence. The survey polled all types of renters, not just those at conventional, market-rate apartments.
Groups that reported the highest percentage of respondents who had “no confidence” in their ability to pay next month’s rent included those where a member of the household has experienced a loss of employment income (19.7%), and those with a household income of less than $25,000 annually (20.4%).
Thus far, apartment renters have mostly been able to keep up with payments during the pandemic. NMHC reported 90.8% of multifamily renters in the U.S. had paid rent through May 20. In April, nearly 92% of renters paid.
Throughout the pandemic thus far, patterns have already emerged within payments data, RealPage Chief Economist Greg Willett said. Geographically, markets with high numbers of COVID-19 cases – like New York – and those with a large portion of leisure and hospitality workers – such as New Orleans and Las Vegas – are trailing. Across product classes, high-rises and Class C products lag the national norm.
Many of the expanded federal unemployment and other benefits have helped renters meet their obligations over the two months. However, many of those benefits are set to sunset in July and it’s unclear which, if any, will be extended. When those benefits end, owners and operators could see a more material impact to their bottom lines.
Many apartment operators have also made special efforts such as offering payment plans to assist struggling renters.
“One thing we’ve noticed is that communication makes a huge difference,” said Caroline Vary, a partner at New York-based Jonathan Rose Companies. “We’ve called every single resident at our properties for a wellness check, but also to ask what their [payment] obstacles are.”
After learning that some Rose Companies residents were unable or unwilling to venture outside their units, management set up residents with online payments. Rose Companies’ portfolio spans the entire country and includes many Section 8 voucher properties.
“We will continue that type of outreach,” Vary said.