Above photo: WGN.
Landlords across the country have been left in the lurch after nearly one-third of apartment renters in the US didn’t pay any of their April rent during the first week of the month, according to new data from the National Multifamily Housing Council to be released Wednesday.
The shocking figure comes as 10 million new unemployment claims were filed in the past three weeks due to the COVID-19 pandemic.
According to the report cited by the Wall Street Journal, just 69% of tenants paid any rent between April 1 and 5 vs. 81% the same week in March and 82% in April 2019.
The count includes renters who only made partial payments. Many renters who haven’t yet paid may still pay later this month, NMHC said, and an uptick in paperless payments over the weekend may not be reflected in this initial count.
The data come from 13.4 million rental apartments analyzed by several real-estate data firms, including RealPage, Yardi and Entrata. The properties included are considered investment grade with a tenant base that may skew higher-income than the median renter. The data don’t include single-family homes, and the apartments counted exclude public housing and other subsidized affordable housing. –Wall Street Journal
The Journal also notes that some tenants will receive temporary protection from evictions “by a patchwork of federal and local laws,” but the reality is that as unpaid rents pile up, so will mortgage defaults as landlords struggle to satisfy their obligations – which will in turn affect fixed-income investments backed by said mortgages.
Standing in the way of this cascade is a promise by the federal government which will allow apartment building owners to defer their government-backed mortgage payments, while the Federal Reserve has also vowed to buy bonds tied to certain multifamily loans, according to the report.
That said, the measures don’t address loans held by banks without a government guarantee – leaving over 2/3 of financed rental units subject to foreclosure.