In its survey of 11.7 million professionally managed apartment units, the National Multifamily Housing Council’s Rent Payment Tracker found that 80% of apartment households made a full or partial rent payment by May 6.
One year ago, 80.1% of households had made a payment by May 6, and two years ago, before the COVID-19 pandemic, 81.7% of households had paid rent by that date.
“This month’s findings are part of what seems to be an increasingly clear pattern of economic recovery and strong demand for multifamily housing,” says Doug Bibby, NMHC president, about the most recent results. “With more and more vaccines being administered, job creation on the rise, and tens of billions in rental assistance being distributed to residents and housing providers in need, the outlook for the industry is a positive one. Federal lawmakers did their jobs when they allocated almost $50 billion in rental assistance, as well as other support for apartment residents. Now, the priority should be for local and state lawmakers to distribute those funds as quickly and efficiently as possible to residents and housing providers who have endured deep financial distress over the course of the pandemic.”
In this month’s Rent Payment Tracker webinar, Greg Willett, chief economist at RealPage, highlighted that of the major markets, the economies that opened fastest are seeing the strongest rent collection rates. In April, six of the top eight metros for collections were in Florida, and Miami ranks first for the first week of May. “The fact that you’ve got people back to work is making a difference,” Willett says.
Toni Reeves, executive director at Greystar, backed up this observation with trends from Greystar’s portfolio. Overall, out of 665,000 units under management in the U.S. across 2,557 assets, Reeves says that collections have remained consistent with national data, currently around 80% to 83%.
Texas and Northern California also are among the areas doing well, while a select number of major cities, including Los Angeles, New York, and Las Vegas, are lagging slightly. By a measure of pre-pandemic employment, Salt Lake City has almost completely recovered, Sun Belt cities are going strong, and major gateway cities are only halfway to where they should be, according to Willett.
When asked about the impact of delinquencies, Reeves notes that Greystar only opened 30 new rent payment plans in April, down from over 4,000 in April 2020, and has experienced less than 700 “CDC declarations.” Revenue losses from 33,000 delinquent units total $186 million in unpaid rent, or an average of $5,500 per unit. So far federal rent assistance has only covered 9% of this amount.
Despite the struggles in urban areas, Jeff Adler, vice president of Yardi Matrix, says nonetheless that rent growth is “rebounding” to a strength not seen for the past five to six years. Out of the 134 markets tracked by Yardi, 117 have seen positive YOY rent growth, including 24 out of the top 30. Brian Zrimsek, industry principal at MRI Software, posits that conversations about affordability may begin to resume within the next six months.
Chase Harrington, chief operating officer at Entrata, has seen that millennials are starting to move back to cities and anticipates that college students and lifestyle seekers will lead the return—while others have left for good. “I do think we’ve hit the bottom, it’s coming up,” he says.
For student housing, in particular, Reeves says that collections in Greystar’s student portfolio remain around 96% and that 81% of its higher education partners have declared in-person classes for the fall.
Zrimsek notes that supply may be a concern for the future, given the skyrocketing costs of lumber and steel. “The stock is going to be the stock for a little while,” he says, which could have a strong effect on affordability.