Survey: 97% paid S.F. rent for May
The vast majority of San Francisco residential tenants continued to pay their rent in May, despite steep layoffs and soaring unemployment, according to a survey of San Francisco Apartment Association members.
The survey of 352 property owners or managers, which encompassed 13,961 San Francisco apartment units, found that 96.8% of tenants paid their rent in May. The percentage of tenants unable to afford rent amid the coronavirus epidemic declined to 3.2% in May compared to April, when a similar survey found 5.7% of tenants couldn’t pay.
The surprising ability of tenants to come up with May rent could be in part due to the $1,200 stimulus checks many received, as well as unemployment checks, which in California can range from $640 to $1,050 a week, according to Charley Goss, policy director for the Apartment Association.
The survey is the largest of its kind, but
represents only around 6% of the city’s rental stock. San Francisco has nearly 400,000 housing units, and around 57% of residents are renters, according to the city’s Planning Department and the Federal Reserve.
Landlord and property manager J.J. Panzer, who owns or manages 519 units, said that he had 35 tenants unable to pay all or a portion of their rent in May because of lost income due to the coronavirus. That’s about 6.5% of his portfolio and about twice what it was last month.
“It was better than expected, but doubling from one month to the next is shocking, even if the numbers are small,” he said. “It makes me wonder how many more people there are in rental housing who haven’t asked for help yet but are going to need it. I will be greatly concerned if it jumps from 35 to 70 in June.”
In addition to laidoff workers unable to make rent, landlords are also seeing an increase in the number of tenants looking to break leases. Of the landlords surveyed, 17% said they had a tenant give notice that they intend to move out. The April Apartment Association survey found that 21% of landlords had tenants who broke leases.
Panzer said that the first wave of tenants who were unable to pay all worked in “hightouch” jobs such as tourism, hotels, restaurants, dogwalking, retail and construction. While some of them may be able to return to work, a new wave of tech workers have swelled the ranks of the unemployed. The Chronicle found over 93,000 jobs lost in the Bay Area since March, including about 9,000 tech workers.
“Suddenly, a whole bunch of renters who had been able to work from home are out of work, too,” said Goss. “Those renters have not been impacted by coronavirus in April or May, but they very well might be in June.”
Similar to last month, commercial tenants were much less likely to be able to pay than residential tenants. The landlords in the apartment association survey found 57% percent of commercial tenants didn’t pay May rent, as shops and restaurants were shuttered or reduced to take out orders.
Some landlords will increasingly face a combination of vacant units, shuttered storefronts, and laidoff residential renters, Goss said.
“When you combine those three things, it’s a triplewhammy,” he said.
The number of San Francisco tenants still writing monthly checks is much lower than national figures. A survey of 4,000 Americans by Apartment List found that 22% of respondents have not yet made a housing payment for May — rent or mortgage — and an additional 9% have made only a partial payment. Missed payments remain common for renters and homeowners alike.
Igor Popov, chief economist at Apartment List, said that the San Francisco tenants, who live in the nation’s most expensive housing market, may be better able to weather the coronavirus storm than folks in lowerincome cities. But the impact may be delayed for tech workers who were able to work from home early in the health crisis but now find themselves with astronomical rents and no income.
“What we are realizing now is there is more structural change happening in the economy as a result of COVID19 — the costs are distributed more evenly across the economy,” he said. “This is not just a service industry, restaurants and retaildriven crisis. It’s pretty broad.”