With overall rent collections down in 2020 compared to last year, but with new stimulus measures now in place, groups like the National Multifamily Housing Council are cautiously optimistic about rent payments in the first few months of the new year.
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Since May of this year, NMHC has put together a comprehensive rent payment report covering more than 11 million professionally managed multifamily units across the country. Several industry data providers including Entrata, RealPage and Yardi contributed to the study, which has covered the status of collections from May through November of 2020. Full month figures for December will be available next week, but 89.8 percent had paid by Dec. 20.
Between May and November of 2019, rent collections received by month’s end averaged 96 percent per month, according to figures from NMHC’s Rent Payment Tracker series. During the same seven-month time period in 2020, rent payments received by the end of the month averaged 94.8 percent. While the 1.2 percentage point difference may not seem like much, factoring in that the numbers reflect around 11.5 million professionally managed apartment units, the difference is about 138,000 fewer renters making payments every month.
Caitlin Sugrue Walter, NMHC’s vice president of research, told Multi-Housing News that the organization has seen lower collection rates as the pandemic has worn on over the last several months.
“It’s still overall pretty good, but in terms of rent collections, we’re definitely overall lower compared to 2019, which was probably one of the highest levels for the last cycle,” said Walter.
Industry groups like NMHC have been lobbying Congress for more federal rent relief measures for months, with lawmakers unable to reach an agreement on another stimulus package since the CARES Act was passed in March. But after Congress finally agreed to a package and President Trump signed it into law on Dec. 27, both landlord and renter advocates breathed a sigh of relief—if only temporarily.
“I’m slightly less nervous than I was three days ago,” said Walter.
Estimates on the amount of back rent accumulated during the pandemic have reached as high as $70 billion, and with the stimulus bill including an emergency rental assistance fund of just $25 billion, apartment groups and other advocacy groups are worried that the legislation will only temporarily solve the problem.
“I’m hopeful the rent payment numbers will stay similar to where they have been for the next couple of months going forward, but $25 billion was just a fraction of what was needed to make up the back rent, not to mention folks who can’t pay rent going forward,” said Walter, who also noted that mom-and-pop landlords have been more “severely” impacted by the pandemic than the professionally managed apartment properties tracked by NMHC.
Still, looking ahead several months, Walter is optimistic that demand for apartments will still exist once things somewhat get back to normal, especially for properties in the urban core, which have seen some of the biggest impacts.
“I think overall folks see the value of living in apartments in cities,” said Walter. “The sooner we can get out of the pandemic situation and safely go to work and school, folks can get back to what the new normal is. Whenever that happens, the fundamentals are good for the apartment industry.”