Rent collection data from 11.5 million rental apartments.
By Wolf Richter for WOLF STREET.
About 44 million households (107 million people) rent their home: 33% a single-family house; 62% an apartment; and 4% a mobile home. Even before the Pandemic, a large number of renters paid their rent late, or made partial payments, or were a month or more behind and faced evictions. That’s the business of being a landlord, even during the Good Times. But how much worse is it now, on the eve of the expiration of the CDC eviction ban?
December started out on the worst note of the Pandemic yet: Through December 6, only 75.4% of households have made full or partial rent payments (some landlords allow partial rent payments) for December, based on a survey of 11.5 million professionally managed apartments, reported by the National Multifamily Housing Council (NMHC) today. This is a steep deterioration from November, when 80.4% of household had made a full or partial rent payment by November 6. Last year, 83.2% of households had made a full or partial rental payment by December 6:
These near-real-time data that have been born out of the Pandemic and that compare current days to the same days last year can be a little raw, including calendar shifts. This year, December 5th and 6th fell on a weekend, but last year fell on a Thursday and Friday; and this may have contributed to slowing rent collections, the NMHC points out. The final percentage of how many renters made their December rent payment by the end of December will become available in early January.
The results look a lot better for rent payments by the end of each month. Through the end of November, 93.6% of renters made a full or partial November rent payment, up from 80.4% on November 6th. In other words, over the month of November 2020, many renters were able to catch up on their rents, but on-time rent collections remained 1.6 percentage points below last year (95.2%):
The NMHC obtains this rent collection data from five property management software providers (Entrata, MRI Software, RealPage, ResMan, and Yardi) that property managers use for functions like rent payment processing. The data is based on about 11.5 million leases and thousands of apartment firms that use one of these software programs. These are “professionally managed” apartments, rather than apartments managed by mom-and-pop operations, though these small operations manage a significant part of the rentals.
The 11.5 million apartments in this sample are market-rate apartments in multifamily buildings. They do not include subsidized affordable units, single-family houses for rent or condos for rent, privatized military housing units, or student housing.
How many millions of households are threatened by eviction?
By December 6, of this sample of 11.5 million renters in apartment buildings, 24.6% had not made the December rent payment. That’s 2.76 million households. But many of them will make the rent payment by the end of the month – as they have in past months.
At the end of November, 6.4% of the renters had not made their November rent payment. That would be 736,000 renters out of 11.5 million that had fallen behind by one month on their rents.
But in November 2019, during the Good Times, 4.8% of the renters were one month behind on their rent, or about 552,000 renters.
In other words, this year at the end of November, about 184,000 more renters had fallen behind than last year, out of this sample of 11.5 million renters.
The sample here of 11.5 million renters represents 26% of the 44 million total renters. If the average rent collection ratios here apply roughly across the rest of the industry, it would suggest that by the end of November, across all 44 million renter households, about 710,000 more rental households than last year were one month behind on their rent.
By December 31, when the CDC eviction ban expires, this might increase some, given the deterioration (beyond the calendar shift) in today’s rent collection data through December 6.
Assume for a moment that by the end of December, 5.4% of renters will not have made the December rent payment, same as in April, the worst month of the Pandemic, then 2.37 million households would be at least one months behind on rent, compared to 1.01 million households at the end of December 2019 — still the Good Times.
If these assumptions for December 2020 play out, 1.36 million more households than a year ago would be behind at least one month on rent when the CDC eviction ban expires, of a total of 44 million renter households.
(Note that some state and local eviction bans have been extended into 2021. So the number of households facing eviction in January would be smaller.)
It’s still a large number, the 1.36 million more renters than last year facing eviction, and it’s a tragedy for these renters, and it’s a tough business for landlords that have tenants who stopped paying rent. But it’s a far cry from the breath-taking mind-boggling numbers bandied about in some of the media of 30 million to 40 million people being threatened by eviction in 2020.
The cut-off date (Nov. 14) kept much of the hit from the Covid spike out of the jobs report. Then there are the long-term hits to the American job market, such as rampant globalization. Read… The Jobs Report is a Mess, December Will Be Messier
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