Residents at the country’s biggest apartment properties paid October’s rent at exactly the same rate they did last October, well before the pandemic sidelined millions of workers and put rent payments in doubt.
The results from the latest National Multifamily Housing Council survey underscored the value of buildings that have high numbers of white-collar tenants who have kept their jobs and are probably working from home.
NMHC’s first-week data for October mirrors last year’s level and is actually up from the rate for the first week last month. Some 79.4% of renters made a full or partial payment through Oct. 6, identical to a year earlier, and up from the 76.4% who paid in early September.
That September rate was the lowest in a first week of the month since April, when NMHC, a Washington, D.C.-based industry trade group, began tracking rents at 11.4 million apartments nationwide. Every month has ended with payments topping 90%, roughly in line with historical averages.
The steadiness has been one of the head-scratchers of the pandemic-induced recession. And while apartment professionals stress there are signs of trouble and softening, the high level of collections isn’t easy to explain.
“Renters have been acting incredibly responsibly,” NMHC President Doug Bibby said Thursday during a webinar.
The now-expired enhanced unemployment benefits, the efforts of landlords to wheel and deal with renters, and the fact that many renters in NMHC’s survey are better-paid professionals with savings not as hard-hit by unemployment have helped the numbers, according to Bibby.
“But as sunny as that all looks, there are signs on the horizon that are looking bad,” he said.
Tenants are prioritizing rent payments, for sure, said Marci Williams, president of Charlotte, North Carolina-based RKW Residential. The third-party apartment management company looks over about 20,000 units in six states, mostly in the South.
But some tenants are moving out, or not renewing their leases and instead going month to month. New tenants and renewals are getting breaks too, she said. “We’re seeing concessions of one month, two months, plus a $1,000 gift card,” she said.
And if delinquencies aren’t at apocalyptic levels, they are taking a toll.
“If you’re used to 2.5% delinquencies and now you’re seeing 4%, that’s a lot,” she said.
NMHC is lobbying hard in Congress for an elusive second round of COVID-19 relief, which would include payments to both renters and the landlords losing money during the recession. The group believes that to date, the properties in its survey — by definition larger, professionally managed residences — have been shielded from the delinquency pain being felt in smaller regional and mom-and-pop properties.
Colin Dunn, an NMHC spokesman who said he is surprised about the survey’s findings so far, said his group’s advocacy is aimed at the country’s entire housing sector.
“The need for rental assistance for both residents as well as owners/operators is only going to grow as no COVID relief bill is forthcoming and household savings evaporate. That’s why we’re continuing to call on lawmakers to act with urgency and pass a meaningful bill,” he said in an email.
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