The Pressure on Residence Renters Intensifies as Pandemic Wears On

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The burden on apartment tenants increases as the pandemic progresses. Research by Apartment List found that more than 30% of apartment tenants in the US owed rent repayment in September. The number remained almost unchanged compared to August. About half of renters owe less than $ 1,000 and only 5% owe more than $ 2,000. However, the report suggests that if it weren't for the need, another round of economic reviews would be helpful to help tenants pay off those debts and to help landlords recover losses.

Rent back debt remained stable from August to September, suggesting tenants are working towards paying full rent but are struggling to repay past rents. Landlords also report that tenants are actively looking for ways to pay off the debt, either through a repayment plan or an alternative rental structure. In many cases, this also includes a contract extension that helps landlords maintain occupancy. The data on the apartment list shows that two out of three tenants have applied for an extension of the lease and three out of four tenants have made a repayment agreement. Landlords also meet with tenants halfway. Only one in four tenants who reached an agreement was turned down.

Unfortunately, rental debt problems are most severe among minorities. The Apartment List report found that 48% of Hispanic renters have amassed rental debt, 41% of black renters have amassed rental debt, and 35% of Asian tenants have amassed rental debt. All of these groups individually have a higher rental debt than the total rate of 31%. For comparison: only 24% of white tenants have accumulated rental debts.

Black and Hispanic populations are more likely to rent than other populations. In September, problems with paying rent didn't get any easier. 43% of black and Hispanic Americans reported missing out on a rental payment in the first week of September. By comparison, 25% of white renters missed a payment in the first week of September and 30% of Asian renters missed a payment in the first week of September.

To keep up with rent payments, tenants have made significant sacrifices or have relied on family or friends. The report found that 40% of renters with unpaid rent borrowed money from family or friends, compared to 25% of renters with on-time rent payments. Other tenants have had to make significant financial sacrifices to keep up with rental payments, including selling personal assets, collecting credit card debt, and withdrawing from a retirement account. Both tenants with unpaid rental debts and those who know about rental payments have made these financial sacrifices, although they are more common among tenants with unpaid rental debts. In addition, 36% of all tenants took out personal savings accounts to make rental payments during the pandemic.

The rental collections are declining overall. The Number of households paying rent According to the Rent Payment Tracker from the National Multifamily Housing Council, the figure was 92.1% as of August 27, down from 93.3% in July and 94.2% in June. The rental collections in September should follow this downward trend.

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