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84% Of Apartment Renters Have Paid April Rent

84% Of Apartment Renters Have Paid April Rent

A few extra days made a big difference, and now April multifamily rent collection is much closer to historical norms.

About 84% of renters made a full or partial April rent payment by April 12, according to data released Wednesday by the National Multifamily Housing Council, which surveyed 11.5 million professionally managed apartment units across the U.S.

That figure represents a 15 percentage point increase from the survey results ending on April 5, where only 69% of renters had made an April rent payment.

In comparison, 91% of renters made full or partial payments during the same period in March, and 90% of renters paid during April 1-12 last year.

The significant week-over-week jump could be due to a few different factors, such as the receipt of larger unemployment checks to counter the impact of the coronavirus.

In addition, the first survey may not have been fully representative of rent payment progression, as April 5 was a Sunday. As a result, banks were closed and leasing offices were unable to process checks.

NMHC Vice President of Research Caitlin Walter told Bisnow that while some of the percentage increase occurred on April 6 as anticipated, the organization also found that apartment managers have adopted more social distancing protocols, such as appointment-only opportunities to delivery checks, that could be slowing down payments. 

“It'll be interesting to see what happens in May, if it was a 'being on a Sunday' phenomenon, or if it’s that some things are just changing,” Walter said.

The number of units included in the two surveys were also different. The first survey reported 13.4 million units in the dataset, while the second survey included fewer units, at 11.5 million. 

Walter said the different number was due to NMHC’s data providers changing their methodologies for counting apartments.

“They went through some screening procedures to look at the units they were including,” she said. “It can also fluctuate if somebody decides not to use that leasing software and you have a 300-unit property drop off, all of a sudden.”

The dataset number is expected to consistently change over the coming weeks, as tenants also move in and out of multifamily properties that are counted by the data providers.

The NMHC Rent Payment Tracker is powered by five data firms: Entrata, MRI Software, RealPage, ResMan and Yardi Systems. The tracker is updated weekly.

The tracker’s percentages are based on the total occupied units, excluding vacant units. Purpose-built student housing, privatized military housing and subsidized affordable units are not included in the data.

There are 21.4 million apartments across the country in buildings with five or more units, according to U.S. Census Bureau data.

Camden Property Trust CEO and Chairman Ric Campo said during NMHC’s weekly webinar update Wednesday that the company’s collection rate is at about 93% for its 164 properties across the country.

“We feel pretty good with the pace, in terms of where we are in the market today,” Campo said.

Avanath Capital Management CEO and Chairman Daryl Carter noted that although about 85% of the firm’s portfolio falls under Section 8 or tax credit housing, it is also seeing a collection rate of 93%.

RealPage Chief Economist Greg Willett noted that Class-C apartment properties were lagging behind collections for higher asset classes, but that the difference is only a matter of about five percentage points. The difference in rent delinquencies was more likely to be related to geography and employment market composition than asset class.

Campo said Camden has seen more delinquencies in cities where hospitality and tourism play a major role.

“South Florida, Orlando, Southern California are the ones we hear the most noise from, and have the highest increase in resident stress, primarily because they’re more hospitality and tourism-driven markets,” he said.

Despite positive April numbers, Carter said he is more concerned about May, as the crisis continues to drastically affect employment numbers across the country.

“Any decline in income has a precipitous effect across the apartment industry because we have such an affordability crisis to begin with,” Carter said.

The U.S. government’s stimulus checks are beginning to roll out via electronic payments, but could take a month to fully reach taxpayers. For multifamily owners and operators, there is hope that when the cash reaches the public, it will help renters meet their May payment obligations.

“I think when the funds do come in, they may just carry May,” ResMan President Elizabeth Francisco said.