The COVID-19 pandemic saw both property owners and renters experience significant changes, but there are already signs of recovery in 2021.
Pre- Pandemic: 2019 Renter Demographics
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
- 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.
Of the 44 million renter households, nearly 10.8 million are considered extremely low-income.
- 70% (7.6 million) of lower-income households were severely housing cost-burdened, frequently spending over half their monthly income on rent.
- 48% of extremely low-income renter households are seniors or disabled
- Among income groups, only extremely low-income groups face the highest shortage of affordable rental properties.
- In comparison, only 0.9% of extremely middle-income households were severely housing cost-burdened.
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
- 33% of renters have no or poor credit
- 46% of renters do not have a line of credit
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.
The housing shortage prior to the pandemic disproportionately affected extremely low-income households, with only 7.4 million rental units in the U.S. available for rent at prices that the 10.8 million households in that category could afford.
Paying The Rent
By 6 March 2021, 80.4% of renter households in professionally managed apartment units had fully or partially paid their rent, a 4.1% decrease from the number of households who paid rent that week the previous in 2020.
7% of renters were occupying a rental unit without paying rent in March 2021, compared to 4.6% in July 2020.
64% of renters had moderate to high confidence they could afford the rent in March 2021:
- 57% were white, 18% were Hispanic, 14% were black, 5% were Asian, and 5% were other races
- 34% had children under age 18 in the home
- 51% had lost a source of income
Among the 11% of renters who had no confidence they could afford rent in 2021:
- 37% were white, 34% were Hispanic, 21% were black, 2% were Asian, and 5% were other races
- 54% had children under age 18 in the home
- 80% had lost a source of income
In March 2021, luxury and mid-range apartment properties saw 94.9% rents paid compared to 89% of lower-income properties.
The cities with the largest annual decline in rent payments in the U.S. are New Orleans (-15.2%), Baltimore (-13.7%), Portland (-10.7%), Seattle (-10.5%), and Los Angeles (-9.6%).
Renters are increasingly paying fully online via an electronic check, debit, or credit card.
- Payments made via credit/debit card are up 5% in 2021 with 18% of card payments online
- eCheck payments are also up 5% to 59% in 2021
- Scanned checks have decreased 9% to only 21% of rent payments
- Rent paid via money orders has not changed, remaining at 3%
Late fees posted also declined in February 2021, with a 19% decline from February 2020.
- In February 2021, late fees averaged $9.90 per unit
- In February 2021, late fees remained 80% higher than February 2020
Rental Occupancy & Rates
Applications and move-ins rapidly began to decline as COVID-19 took hold in early 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
Entrata began offering self-guided and virtual tours of apartments in July 2020. By March 2021:
- 184,000 self-guided tours were completed, resulting in 25,000 new leases
- 90,000 virtual tours were completed, resulting in 18,000 new leases
43% of property owners with apartments available to rent offered an incentive or rent giveaway in the first quarter of 2021
For the most part, rental occupancy has not decreased during the pandemic for most apartment properties. In February 2021, occupancy was at 94% compared to 93.4% in February 2020.
Since the pandemic, renters have been reluctant to commit to long-term leases. In February 2021, lease renewals had dipped to 43% from 56% in February 2020.
The percentage of renters remaining in month-to-month leases after a lease had expired was at 7.7% in February 2021 compared to 6.8% in 2020
The number of resident service requests declined 56% in April 2020 compared to the previous year.
Before the coronavirus pandemic, the average number of eviction cases in the U.S. was 3.7 million. During the pandemic, the protections put in place for renters have prevented at least 1.6 million eviction filings in 2020 and into 2021.
- Between March and July 2020, the Eviction Lab estimates that filings decreased to 4.2% of the usual rate: from 50,000/mo (pre-pandemic) to an average of 2,100/mo.
- With state and local protections expiring at the end of summer 2020, the number of cases filed rose to over 7,000/mo.
The CARES Act was 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. This did not offer protections to renters living in properties not affiliated closely with government funding or programs.
- Section 4024- Renters living in properties participating in specific federal programs, which was estimated to cover as many as 20 million renter households
- Section 4023- Renters living in multifamily properties under mortgage forbearance, which was estimated to cover nearly half of renters in multifamily units (estimated to be around 9.6 million households)
- Section 4022- Renters living in single-family properties with federally backed mortgages in foreclosure (estimated to be around 2.8 million households)
After the CARES Act moratorium expired on July 24, 2020, the rate of evictions remained 74% lower than the same time period in 2019.
The Centers for Disease Control and Prevention CDC issued an order prohibiting evictions of eligible renters, and on March 31, 2021, announced an extension of its eviction moratorium, with various government entities including the Consumer Financial Protection Bureau and Federal Trade Commission enforcing penalties against landlords that violate the order.
After the CDC’s eviction moratorium was issued, the rate of evictions began to increase again but still remained around 50% lower in December 2020 than the same period in December 2019. The moratorium did not automatically protect renters, who were required to provide a declaration form to their landlord asserting eligibility for protection from eviction. Lack of outreach and communication has led to higher eviction rates.
Local governments, counties, and states have also implemented moratoriums on evictions through courts, executive orders, and legislative measures.
States that did not adopt a state-level order included Arkansas, Georgia, Missouri, Ohio, Oklahoma, South Dakota, and Wyoming.
The GAO (Government Accountability Office) found that even with the moratorium, many eligible renters were not accessing protections given them under the moratoriums.
The eviction moratorium was found unlawful in a U.S. District court, and while the decision is under appeal, the extension may not apply to National Association of Home Builders (NAHB) members. NAHB encourages its members to pursue funding through the Emergency Rental Assistance Program given to states before beginning eviction proceedings on tenants. Over $46 billion was given to local government and state housing agencies and landlords are encouraged to seek access to this funding to offset financial hardship experienced during the pandemic.
In March 2021, 1.2% of renter households in the U.S. indicated their rent payments were being or would be deferred.
Additional Government Assistance
The CARES Act also created the Coronavirus Relief Fund, which could be used to fund rental assistance programs. Grantees only used a very small percentage of the $150 billion for rental assistance, with only $2.6 billion allocated towards state and local rental assistance.
An additional $25 billion (Emergency Rental Assistance) was directed to fund eligible state and local grantees to be paid directly to property owners and utility providers, and for households experiencing housing instability. The Treasury has indicated that prioritization should be given to Households at or below 50% of the area’s median income.
A survey of 2500 tenants in February 2021 found that housing vouchers have helped both tenants and landlords:
- 74% of federal Housing Choice Voucher holders had income less than $25,000, and 29% had income within the $25,000 range.
- Voucher holders tend to owe less back rent, with 68% of low-income tenants with vouchers owing less than $1,000 in back rent compared to 52% of low income-tenants without vouchers.
- Only 5% of low-income tenants with vouchers owe $5,000 or more, compared to 14% of low income tenants without vouchers.
- 60% of Hispanic landlords, 25% of black landlords and 33% of white landlords indicated that the pandemic has made them more likely to rent to tenants with housing vouchers.
- 49% of landlords surveyed were undecided about housing choice vouchers because they did not have enough information about the program, and of these, 37% said they were unsure if their rental units qualified for participation.
COVID-19 & Renters- End-of-Year 2020
In December 2020, 211,919 renter-occupied housing units were occupied by households that were not paying rent.
Less than half (47.6%) of renters felt it was not very likely or not likely at all that they would be evicted within the next 2 months:
- 70% were between the age of 25 and 54
- 55% had children in the home
- 73% had experienced loss of employment income
- 36% reported a household income at less than $25,000
Over half (52%) of renters felt it was somewhat to very likely they would have to leave their home due to eviction within the next two months. Among these renters:
1,683,990 renters felt it was very likely they would be evicted within 2 months:
- Over half (58%)were households with children
- 88% had experienced loss of employment income
- 67% were unemployed
- 43% reported a household income at less than $25,000
Among 788,140 unemployed adults over the age of 18 surveyed in December 2020 by the Census Bureau:
- 34% indicated they did not want to be employed at this time
- 46% indicated they were laid off due the coronavirus pandemic
Other changes had rocked the rental market nationwide:
- In San Francisco, one of the most expensive rental markets in the U.S., rents dropped 15% during 2020.
- In March 2020, New York saw a 65% drop in new rental listings.
- In May 2020, 53% of New York landlords did not receive full rent
- The cities where the rental market saw consistent growth included Las Vegas (3.8%) and the southwest Florida coast (1%) during the pandemic, partially due to large migration from California and New York.
- During 2020, new multifamily building permit approvals declined an average of 10-15%.
COVID-19 & Renters- First Quarter 2021
As of March 2021, 44.2% of renters had high confidence they could pay their next month’s rent, compared to 11% who had no confidence that they would be able to pay.
In March 2021, approximately 1.8 million households owe $6,100 in back rent totaling nearly $11 billion
Over half (50.7%) of renters felt it was not very likely or not likely at all that they would be evicted within the next 2 months:
- 72% were between the age of 25 and 54
- 49% had children in the home
- 69% had experienced loss of employment income
- 27% reported a household income at less than $25,000, 16% reported a household income between $35,000 and $50,000, 15% reported a household income between $50,000 and $75,000
Less than half (48.4%) of renters felt it was somewhat to very likely they would have to leave their home due to eviction within the next two months. Among these renters:
1,405,765 renters felt it was very likely they would be evicted within 2 months:
- Over half (53%)were households with children
- 87% had experienced loss of employment income
- 67% were unemployed
- 43% reported a household income at less than $25,000
- Census COVID-19 Data Hub
- Housing Choice Voucher Program Section 8 | HUD.gov / US Department of Housing and Urban Development
- Get the Data | Eviction Lab
- COVID-19 Rental Housing Trends
- 1 Statement by Matthew Desmond before the United States House of Representatives Committee on Financial Services for the hearing
- Has Apartment Rent Payment Deterioration Moved Past Bottom? | RP Analytics
- Apartment Rents Are Up Again in San Francisco as Demand Returns
- COVID-19: Where the Apartment Market Stands One Year Later | RP Analytics
- CENTERS FOR DISEASE CONTROL AND PREVENTION DEPARTMENT OF HEALTH AND HUMAN SERVICES ORDER UNDER SECTION 361 OF THE PUBLIC HEALTH
- CDC Extends Eviction Moratorium Through June 30; Order Should Not Apply to NAHB Members
- CFPB Acting Director Uejio and FTC Acting Chairwoman Slaughter Issue Joint Statement on Preventing Illegal Evictions
- JOINT STATEMENT OF CFPB ACTING DIRECTOR DAVE UEJIO AND FTC ACTING CHAIRWOMAN REBECCA SLAUGHTER In the ongoing economic and publ
- Household Rental Debt During COVID-19: Update for 2021
- Text – HR133 – 116th Congress (2019-2020): Consolidated Appropriations Act, 2021 | Congress.gov | Library of Congress