Wednesday, May 20, 2020

The Rent Is Getting Paid. How?

From CityLab (now a Bloomberg property), May 8:

Four out of five apartment renters in the U.S. were able to make their rent payment in May. But the data only tells part of the story.
Dennis Schvejda, a landlord who owns two apartment buildings with 16 units in Walton, New York, was worried going into May. His tenants are of modest means; rents at his units average about $550 a month. After expenses — which include maintenance and utilities as well as county, town and village taxes — his taxable apartment income is about $115 a week, he says. With the U.S. facing unprecedented job losses and the steepest economic reversal since the Great Depression, he didn’t know if the May rents would be coming. If not, he says, he would have been forced to sell.

To Schvejda’s surprise, May rent was better than April. All but two of his tenants were able to fully pay their rent on time, and one tenant repaid the April payment they had missed. “With Upstate New York beginning to open for business soon, I’m hopeful that my extreme concern about nonpayment of rent was overblown,” he says.

While employers cut 20.5 million jobs last month, most apartment renters nevertheless managed to pay the May rent, according to figures released by the National Multifamily Housing Council on Friday. By May 6, only 19.8% of renters of the nation’s 11.5 million apartment units had failed to pay rent. That’s a surprising figure — not just given the double-digit unemployment rate, but because May 2020 rent payments roughly line up with May 2019.

“Residents and owners are working together with payment plans, allowing credit card payments and other flexible options,” says Doug Bibby, president of the National Multifamily Housing Council. “But a key question is how long will renters be able to continue to rely on unemployment insurance, draw upon savings, or utilize credit cards. This is why Congress must pass legislation to provide direct assistance to renters in the next coronavirus aid package.”

These figures offer only a snapshot of the uncertainty facing renters. The council tracks data for market-rate apartments, which means the numbers exclude tens of millions of renters who live in single-family homes or subsidized rentals. Still, the figures show that apartment renters are making good so far — which for the unemployed means dipping into savings, using one-time stimulus checks, or lucking out in the long waits to receive unemployment benefits....