Grim forecasts of apartment rent shortfalls have not come to pass, according to data released today: Some 89 percent of tenants made payments in April.
The New York Times warned the world that 40 percent of renters in the U.S. would be unable to pay rent in April, but the figure was based on guesses from a survey, not data. The National Multifamily Housing Council found that by April 19, the overwhelming majority of tenants in the 11.5 million rental apartments it surveyed paid at least some rent.
The 89 percent figure was virtually unchanged from the 91 percent who made payments in the previous month through March 12, and a five-point increase in April payments through April 12, when the D.C.-based lobby group reported that 84 percent had ponied up.
The incremental increases indicate that renters may have been withholding some rent, possibly waiting for the arrival of unemployment benefits or federal stimulus checks.
Despite the rosier-than-expected rent levels reported by the National Multifamily Housing Council, the survey represents barely a quarter of the nation’s 43 million renter households. Many tenants may have been laid off or had their pay cut since paying April rent. In the last half of March and first two weeks of April, some 22 million people lost their jobs, according to the Department of Labor.
Property owners whose tenants are less affluent have reported more significant drops in rent, with collections as low as 50 percent for some multifamily property owners, according to Victor Sozio, executive vice president of Manhattan-based multifamily brokerage Ariel Property Advisors.
New York City landlords, especially those whose portfolios are rent-stabilized, including Bronstein, which has around 5,000 such units, reported a significant decline in April rent. Evictions have been suspended in the state, reducing pressure on tenants to pay and effectively preventing landlords from replacing tenants who don’t pay.
But the Community Housing Improvement Program, a New York-based group representing smaller landlords, told Crain’s that no more than 10 percent of its members’ tenants had sought to delay their payments.
Still, with the economy continuing to deteriorate, landlords are eyeing May 1 with apprehension.
Some tenant groups from around the country, meanwhile, are working to persuade renters who could pay to withhold their rent to pressure state and local governments to provide more relief for tenants (and landlords). Members of the real estate industry have criticized the effort, with one calling it “disgusting.”