While many businesses remain closed and the country experiences record levels of unemployment, apartment owners can take some solace that tenants are still making their rent payments.
On Friday, the National Multifamily Housing Council released its Rent Payment Tracker, and reported that 80.2% of apartment households made a full or partial rent payment as of May 6.
This compares to 78% from the same period the previous month and represents only a 1.5 percentage point drop from the same period last year. By the end of April, landlords had received close to 95% of all rents, which was only a 3% drop from last year. The survey includes 11.4 million units across the country.
Source: National Multifamily Housing Council
Many landlords were girding for worse, with some in major metropolitan areas hearing rumblings of rent strikes, but the data shows otherwise. When tenants have been unable to pay rent, landlords have shown a willingness to work with those individuals whether it’s through payment plans, the waiving of late fees, or even setting up relief funds for its residents, as Camden Property Trust did last month with a $5 million fund.
By the end of April, landlords had received close to 95% of all rents, which was only a 3% drop from last year.
For those tenants who can afford to pay their rent, the continuance of rental payments is vital for the progression of the economy. Stimulus payments, federal loan programs and increased unemployment payments have allowed people to stay in their homes.
Maintenance workers who are still present at properties and keeping common areas clean can continue to be paid. Landlords will still be able to make their mortgage and interest payments to retain the properties. State and local governments will still be able to collect real estate tax revenue, which will be vital for their fiscal health with sales tax revenues plunging.
We do not know how long it will take for the economy to fully recover from the coronavirus, but the continued viability of the rental market is a bright spot in an otherwise dreary set of economic data.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.