Apartment Renters Are Paying Up, Says Industry Group

The number of apartment tenants who paid April rent during the coronavirus pandemic has ticked up, according to a new survey of U.S. landlords.

The National Multifamily Housing Council said 89% of rental households paid at least some of their rent this month by April 19.

That’s up from 84% through April 12 and is in line with historical averages. By comparison, about 93% of renters made full or partial payments last year by April 19. So that makes April 2020’s collection rate 95% of what it was at this time in 2019.

In NMHC’s first apartment rent tracker survey, only 69% of tenants had made a payment through April 5, compared to 82% last April 5. But that date was on a Sunday, and the percentage of those paying number rose above 70% when rent checks were logged on April 6.

NMHC, the Washington, D.C.-based apartment industry advocacy giant, has been polling owners and managers of about 11.5 million apartments across the country. When the pandemic first began, and massive job losses ravaged many of the industries that generate apartment demand, landlords feared massive delinquencies on rents, and even rent strikes.

So far, that appears not to have happened.

Two of the biggest public apartment real estate investment trusts, Equity Residential and Camden Property Trust, both filed recent paperwork with the Securities and Exchange Commission indicating April rent collection rates above 90%.

But NMHC is concerned that as the shutdown of the U.S. economy drags on, those collection rates could cave.

“It is encouraging that apartment residents continue to meet their rent obligations whether that’s with the support of the federal relief funds, credit cards and alternative, flexible options provided by the industry’s owners and operators,” NMHC President Doug Bibby said in a statement.

But, he added, “their financial security is unclear as many may not qualify for federal relief, while others are drawing down savings and facing greater financial challenges, including higher health care costs. For that reason, lawmakers need to act now to enact a direct renter assistance program.”

In CoStar’s latest state of the apartment market webinar, John Affleck, vice president of market analytics, cited the rent payment rate as one of the few bright spots in an otherwise bleak market. Rent growth has sputtered to a stop in most cities, and investment sales appear to be on hold. Valuations of properties is becoming harder to determine with rent rolls in uncertainty.

“In our new baseline, values fall about 20% through next year — about in line with losses during the 2008 recession,” said Affleck.