Nearly a third of tenants in the U.S. did not pay their rents during the first week of April, according to a landlord group. The research division of The National Multifamily Housing Council (NMHC), which accounts for monthly rent payments, found a 12 percentage point decrease in share of apartment households that had paid rent by April 5.
The figures represent “the first review of the effect of the COVID-19 outbreak on rent payments.” Overall, just 69 percent of households paid rent by April 5, an 81 percent decrease from March 5.
“Biggest takeaway: almost 70% of apartment households had paid their rent as of April 5. Those who can are still paying,” tweeted Caitlin Sugrue Walter, vice president of research at NMHC.
She believes the toll will be higher next week as late payments trickle in. “Because most apartment operators have a few days grace period where rents can be collected without penalty, clarity on performance data will be gradual for each month impacted by COVID-19,” she wrote in a note.
Rents paid Sunday, April 5 might not have been represented online that date. “The COVID-19 outbreak has resulted in significant health and financial challenges for apartment residents and multifamily owners, operators and employees in communities across the country,” stated Doug Bibby, the council’s president. “However, it is important to note that a large number of residents met their obligations despite unparalleled circumstances, and we will see that figure increase over the coming weeks.”
The data is based on 13.4 million units nationwide. The calculations exclude vacant units, purpose-built student housing, privatized military housing, and subsidized affordable units.
The 12 percent-month-over-month decrease suggests renters struggle to meet financial obligations, suggests Bibby, as stay-at-home orders, lockdowns, and closed businesses strip them of their jobs.
“This information is important because it will provide a regular look at how affected the nation’s 40 million apartment residents are by the economic crisis following the spread of COVID-19. It’s also an indicator of the industry’s financial performance, which has far-reaching financial and economic repercussions,” Walter said.
Approximately two dozen of Minneapolis’ landlord 130 tenants told him they lost their jobs or their had their hours cut.
“Six weeks ago, you could name your price and you’d have multiple people applying,” said Brunner. “Now you’re deferring and working out payment plans, and it’s only going to get worse.”
With April rent coming and going, the attention now turns to May, when the number of people not paying rent will likely increase.