Last updated: May 2020

Coronavirus Related Renting Statistics

  • 90.8% percentage of households who paid rent in May 2020
  • $1.5 trillion multifamily mortgage debt in 2019
  • 58% landlords without adequate emergency funding

US Census Bureau’s most recent data shows an estimated 43.8 million renter-occupied housing units in the US. Of these, 21 million renter households are considered cost-burdened (over 50% of income goes to rent) and most vulnerable to COVID-19-related changes.

As of May 20, 2020:

  • Rental occupancy rates remain at approximately 93%, less than 1% of a decline from May 2019
  • At the beginning of May 2020, percentages of renters who made rent were:
    • 84.6% of renters in Class A (luxury) properties
    • 83.1% of renters in Class B (middle tier) properties
    • 73.6% of renters in Class C (lower level) properties
  • By mid-May 2020, 90.8% of households had paid rent, a decline of 2.2% from May 2019
    • 89.4% of renters in Class A (luxury) properties, a decrease from 92.2% in 2019
    • 88.4% of renters in Class B (middle tier) properties, a decrease from 92.3% in 2019
    • 83.1% of renters in Class C (lower level) properties, a decrease from 84.7% in 2019


COVID-19 Impact on Rental Operations

New leasing processes have been adversely affected. Applications and move-ins declined in 2020:

  • Leasing applications between mid-March 2020 and mid-April 2020 had declined by 29% but by the end of April had risen to represent an 11% decline from the same period in 2019
  • Move-ins by renters to apartments had declined 38% by mid-April 2020 but by the end of the month had risen to represent a 26% decline from the same period in 2019

However, move-outs also declined.

  • Notices to vacate (NTVs) declined 16% in February of 2020 and by the end of April were around 30%
  • NTV cancellations (where a tenant decides to stay after all) increased 5% through April 2020
  • Move-outs were at around 79% compared to the same time period in April 2019

Changes in leases:

  • New lease pricing increased 1-2% in both February and March 2020, but saw a decline of 0.8% in April for 9 and 15-month lease terms, and 12-month leases seeing a decline of nearly 2% from March 2020
  • Lease renewals have increased for some landlords as more residents chose to stay where they were, and renewal pricing increased consistent with 2019 at approximately 1%

COVID-19 Impact on Tenant Behavior

  • Renters are increasingly looking to pay their rent online through a portal. Usage of online portals to pay rent has increased by nearly 33%
    • Use of credit cards to pay rent increased by 5% and ACH payment increased by 12%
    • Properties that do not charge convenience fees for online payments see a slightly higher rate of rent payments being made by their tenants
  • Total usage of portals to pay rent in April 2020 increased 12% from February
  • The number of resident service requests declined 56% in April 2020 compared to the previous year
  • Property package handling service dropped 30% in April 2020 compared to the previous year

COVID-19 Impact: Looking Ahead

The impact COVID-19 has had on housing in the US  could mean lasting consequences for both renters and landlords. Beginning in March 2020, the changes regarding shelter-in-place orders, social distancing, and business operations have already begun to have serious adverse effects. To illustrate:

The student housing market faces an uphill struggle with instruction increasingly shifting online. Higher education enrollment during economic declines has usually remained stable or even climbed. However, this will not be the case with current enrollment trends, which project a 20-35% decline in enrollment for on-campus instruction.

Landlords are facing new challenges in addition to diminished rent rolls. New operating costs will include:

  • Increasing maintenance costs to clean and sanitize common areas, and utilize heightened sanitary measures when fulfilling maintenance requests
  • Modifying properties (some municipalities requiring protective measures such as sneeze guards at desks, sanitation stations at entries to businesses, additional restrooms, etc.) to address the potential risk of pathogen transmission
  • Adopting new technology to accommodate maintenance requests, virtual property inspections, new payment portals, etc.
  • Sourcing cleaning supplies which are increasingly scarce and expensive
  • Landlord-paid utilities will have significantly increased as their tenants spend more of their time at home
  • Banks concerned about the financial and real estate markets are raising interest rates or reducing lending to real estate, requiring costlier loans

Unfortunately, landlords who are unable to continue to pay for their rental properties may lose them. The affordable housing crisis has been by large swaths of single-family and multiple-family housing being scooped up by investors who flip properties and rent them at much higher rates.

A recent study (Avail’s March-May 2020) of nearly 3,000 landlords indicated that approximately 84% of landlords own fewer than 10 rental units, with the remainder owning 10 or more. Among these:

  • 58% of landlords did not have access to an adequate credit line, HELOC or other sources of funding for an emergency
  • Only 4% of landlords had rent default insurance, with 69% indicating they were unaware of this type of insurance, 9% indicating it was too expensive, 4% indicating their property did not qualify
  • 22% of landlords indicated March rent payments were incomplete, 33% did not receive full rent in April, and 42% did not receive all of their rent in May

Additionally:

In 2019, multi-family mortgage debt exceeded $1.5 trillion. Government agencies (Fannie Mae and Freddie Mac) provided capital for 42% ($143 billion) of multifamily loan originations in 2018.

61% of new apartment developments with 50 or more units built in 2018 were intended for high-end markets- nearly 1 in 5 would cost over $2,500 to rent.

 

Renter Demographics: General

In 2019,  approximately 17% of Americans were considered financially vulnerable compared to 54% who were coping financially and 29% who were considered financially healthy

  • In 2019, 66% of Americans indicated they could pay all their bills on time
  • 2% of Americans indicated they were confident their insurance policies would protect them in an emergency

There are approximately 44 million renters in the US:

  • 37% are 1-person households
  • 27% are 2-person households
  • 14% are 3-person households
  • 20% are 4-or-more-person households
  • 39% of renters’ households were covered by renters’ insurance
  • The median income for renters in 2018 was $40,500, and for homeowners, the median income was approximately $78,000 in the same year
  • 21% of renters would not be able to come up with $400 for an emergency, compared to only 5% of homeowners
  • 63% of homeowners and 31% of renters had savings enough to tide them through a 3-month emergency
    • 33% of renters have no or poor credit
    • 46% of renters do not have a line of credit
  • In 2019, 8.6% of Americans frequently had trouble paying their rent, 18.4% sometimes had trouble, and 54.6% never had difficulty with rent
  • In 2018, HUD spending on rental assistance topped $40 billion, with 4.6 million program recipients, yet nearly 75% of the 18 million eligible households in the US did not receive rental assistance

Renter Demographics: Regional

California, Texas, Florida, and New York have the highest renter populations. Within these states, varying levels of renter protection legislation have been seen.

Some of the states with the highest number of renter households have passed some of the fewest emergency eviction and foreclosure moratoriums.  As of May 20, 2020:

  • The Texas Supreme Court allowed eviction proceedings to resume on May 19 with written warnings posted and writs issued beginning May 26 (Landlords must certify their properties are not subject to the CARES Act restrictions)
  • Florida’s COVID-19-related suspension of statutes for cause of action for eviction have been extended to June 2, with the requirement for the clerk to issue writs of possession delayed until May 29

However, New York, which was also disproportionately impacted by the COVID-19 crisis has enacted the following as of May 20, 2020:

  • The Chief Administrative Judge of New York Unified Court System decreed in a memorandum dated March 15, 2020, that “all eviction proceedings and pending eviction orders shall be suspended statewide until further notice.”
  • New York’s Governor’s Executive Order on May 7, 2020 allows tenants to apply security deposits towards past due rent and prohibits eviction for nonpayment due to COVID-19 hardship for 60 days beginning June 20. Sections of the Real Property Law are suspended so that no landlord, lessor, sublessor, etc. may demand or be entitled to late fees or charge for late payment of rent between March 20, 2020 and August 20, 2020.

In New York, 53% of landlords didn’t receive full rent in May. During the month of March, New York saw a 65% drop in new rental listings.


Part of the Coronavirus Aid, Relief, and Economic Security Act (CARES) puts a moratorium on evictions for properties that are financed by federally backed mortgages, federally assisted housing, properties participating in Low-Income Housing Tax Credit (LIHTC), and other federally-subsidized rental and voucher programs.

Most CARES housing-related money does not benefit smaller-scale landlords, renters in market-rate rental housing. Most of the CARES funding for housing only benefits programs, renters, and landlords who are part of a government-subsidized or public housing program.

The federal eviction moratorium extends for 120 days from March 27, 2020 regardless of when the landlord received forbearance. Tenants may not be served with an eviction notice until July 25, 2020 and must be given 30 days to leave the property. The tenant is still responsible for paying rent but cannot be charged late fees, penalties or any other charges.

The CARES act halts evictions for 120 days for:

  • Renters living in single-family and multi-family properties with federally backed mortgages, regardless of when the landlord received forbearance
  • Renters from federally backed multi-family properties whose landlords received forbearance (capped at 90 days)
  • The CARES Act covers 28% (12.3 million) of the 43.9 million rental units in the US including the following:
    • Public housing (42 U.S.C. § 1437d)
    • Section 8 Housing Choice Voucher program (42 U.S.C. § 1437f)
    • Section 8 project-based housing (42 U.S.C. § 1437f)
    • Section 202 housing for the elderly (12 U.S.C. § 1701q)
    • Section 811 housing for people with disabilities (42 U.S.C. § 8013)
    • Section 236 multifamily rental housing (12 U.S.C. § 1715z–1)
    • Section 221(d)(3) Below Market Interest Rate (BMIR) housing (12 U.S.C. § 17151(d)
    • HOME (42 U.S.C. § 12741 et seq.)
    • Housing Opportunities for Persons with AIDS (HOPWA) (42 U.S.C. § 12901, et seq.)
    • Section 515 Rural Rental Housing (42 U.S.C. § 1485)
    • Sections 514 and 516 Farm Labor Housing (42 U.S.C. §§ 1484, 1486)
    • Section 533 Housing Preservation Grants (42 U.S.C. § 1490m)
    • Section 538 multifamily rental housing (42 U.S.C. § 1490p-2)
    • Low-Income Housing Tax Credit (LIHTC) (26 U.S.C. § 42)

COVID-19: Lessening the Impact on Landlords

Options many landlords are exploring to help their tenants and their businesses include:

  • Utilizing mortgage forbearance (for qualified owners only)
  • Applying for mortgage relief and financial assistance
  • Utilize security/rent deposits for rent (some state laws prohibit this)
  • Accepting partial rent payments or rent deferral
  • Waive late rent fees and/or lease-breaking fees

Landlords who increase communication with tenants, reduce fees, and make it easier for them to pay rent see higher percentages of tenants who make paying rent a priority.

Many landlords are allowing tenants who have become unemployed to break their leases without penalty, and are able to move new tenants in who can make rent. With the housing shortage still a reality, there is a silver lining this can help landlords lease to tenants with more stable incomes.

 

Frequently Asked Questions

How many properties are eligible for forbearance under the CARES Act?

The eligibility requirements can be confusing. It is important to remember that over 40% of multi-family loans are government loans, and therefore eligible for forbearance. Housing that is part of a government program, such as the ones below, will be eligible.

  • Public housing (42 U.S.C. § 1437d)
  • Section 8 Housing Choice Voucher program (42 U.S.C. § 1437f)
  • Section 8 project-based housing (42 U.S.C. § 1437f)
  • Section 202 housing for the elderly (12 U.S.C. § 1701q)
  • Section 811 housing for people with disabilities (42 U.S.C. § 8013)
  • Section 236 multifamily rental housing (12 U.S.C. § 1715z–1)
  • Section 221(d)(3) Below Market Interest Rate (BMIR) housing (12 U.S.C. § 17151(d)
  • HOME (42 U.S.C. § 12741 et seq.)
  • Housing Opportunities for Persons with AIDS (HOPWA) (42 U.S.C. § 12901, et seq.)
  • Section 515 Rural Rental Housing (42 U.S.C. § 1485)
  • Sections 514 and 516 Farm Labor Housing (42 U.S.C. §§ 1484, 1486)
  • Section 533 Housing Preservation Grants (42 U.S.C. § 1490m)
  • Section 538 multifamily rental housing (42 U.S.C. § 1490p-2)
  • Low-Income Housing Tax Credit (LIHTC) (26 U.S.C. § 42)
What are the advantages for landlords to conduct more business online, or "virtually?"

While there are always exceptions to the rule, tenants are increasingly preferring to make payments, open service requests, or communicate with their landlords online, through email, or through a service portal of some sort.

The easier a landlord can make it for a tenant to pay rent, for example, the more likely that tenant will actually pay. Landlords who accept credit cards online without steep fees passed on to the tenant are enjoying a higher rate of on-time rent payments.

Why would a landlord want to allow a tenant to break their lease without penalty?

Many tenants who have lost their jobs find that rent is their largest expense. With many protections in place for renters, they are going to be less inclined to pay rent. Additionally, at the end of the moratorium, many renters may find they are unable to suddenly pay 3 months’ worth of rent.

If a tenant is not likely to be able to catch up on their rent, it may be better for both landlord and the tenant to allow them to break their lease without a penalty or fee. The landlord may then be able to offer the unit to a tenant who can pay rent and the tenant can find housing more affordable without having to pay steep fees to do so.

In previous recessions and economic downturns, unemployed persons often stayed with family or friends until they found a job again or found a more affordable apartment.

What can a landlord do to help tenants and also their own business?

Establishing/keeping the lines of communication open and remaining approachable for tenants will only benefit a landlord. A tenant’s willingness to communicate can help a landlord anticipate and avoid problems down the road, such as receiving advance notice when that tenant may not be able to pay rent.

If possible, some landlords may be able to apply security deposits or rent deposits towards rent. Be sure you are not breaking any laws by doing this.

Some landlords are accepting partial rent payments. Sometimes a little is better than none at all.

Some tenants may have suggestions or be able to come up with compromises that work with both parties.

Some landlords have gotten creative. For example, a smaller multi-family property owner discovered he had a licensed general contractor living in a property and worked out an agreement written by another tenant who is a paralegal to help with the upkeep of his properties in exchange for rent.