By Paul Bubny

With apologies to the old game show that went by this name, it’s not “the $64,000 question” that the multifamily sector is asking. Instead, it’s more like the $965/$1,197 question—i.e. the current median monthly U.S. rent for one- and two-bedroom apartments, respectively, according to Apartment List.

That question: with some 16 million Americans having filed for unemployment benefits in the past few weeks due to the coronavirus pandemic, will we see a drop-off in the number of tenants paying their rents on time—or at all?

It’s a question that the industry may need to wait a month or two to answer definitively. However, early indications are that the economic pause necessary to contain the pandemic has had an impact on renters, although the majority sent their rent checks in on time.

The National Multifamily Housing Council (NMHC) reported a 12-percentage point decrease in the share of apartment households that paid rent through April 5, in the first review of the effect of the COVID-19 outbreak on rent payments. NMHC’s Rent Payment Tracker found that 69% of households had paid their rent by April 5, compared to 81% that had paid by March 5, 2020, and 82% that had paid by the same time last year.

“The COVID-19 outbreak has resulted in significant health and financial challenges for apartment residents and multifamily owners, operators and employees in communities across the country,” said NMHC president Doug Bibby. “However, it is important to note that a large number of residents met their obligations despite unparalleled circumstances, and we will see that figure increase over the coming weeks. That is a testament to the quick, proactive actions taken by NMHC members who put forward bold solutions.”

As part of a COVID-19 resource page on its website, NMHC has developed talking points that property owners and managers can use to help guide discussions or communications with residents who have been impacted. Those talking points include a reminder to unaffected residents that their rent is still due.

Separately, one of the vendors that NMHC relies on in putting together its Rent Payment Tracker, Entrata, reported that more than 83% of occupied units at conventional properties in its database made a rent payment by April 7. That’s down only slightly from 84% in March 2020.

Only 5% of April 2020 payments at conventional apartments were partial payments, Entrata said. The numbers were slightly less positive for student housing properties in the Entrata database, with delinquencies on rent payments nearly doubling from the prior month to 13.8%.

For its part, Equity Residential reported an even higher percentage of on-time rent payments for April, 93%, at its apartment properties. The Chicago-based REIT previously had announced it would implement measures to support residents during the COVID-19 shutdown, including a 90-day halt to evictions and the creation of payment plans.

Lehi, UT-based Entrata also reported a significant spike in the number of repayment agreements created in April. In the first week, properties in its conventional apartment database generated 1,162 repayment agreements, compared to 42 in March of this year and 17 in April 2019.

Comparable monthly and year-over-year increases were seen on the student housing side as well. In both sectors, it’s anticipated these numbers will continue to rise sharply as more properties work with their residents to make payment plans.

For comments, questions or concerns, please contact Paul Bubny