Rent payments increased in May, despite job losses

Unemployment and stimulus checks help tenants pay their bills

More tenants paid their rent in the first week of May than in the first week of April, as unemployment and stimulus checks helped struggling families pay their bills, according to a national survey.

About 80 percent of tenants made full or partial payments during the first week of May, a slight increase from 78 percent in April, according to a new survey of 11.4 million apartments by the National Multifamily Housing Council.

“By and large, these are pretty good national numbers,” said Jeff Adler, vice president of real estate data firm MatrixYardi Systems. But Adler warned the impact of the pandemic has just begun. “We’re not out of the woods in any respect. We’re sort of just entering the woods.”

The upheaval caused by the COVID-19 pandemic has put more than 4 million Californians out of work, leaving many families struggling to meet the state’s highest-in-the-nation housing costs. The state has paid in excess of $10 billion in unemployment claims.

Regardless of whether tenants have paid rent, California and Bay Area cities and counties have largely banned evictions except in extreme cases for unsafe living conditions. Health officials say keeping people in stable housing is a key part of preventing further spread of the virus.

Three of the top five most expensive cities in the country in May were in the Bay Area, according to rental listing site Zumper.

The median rent in Oakland for a two-bedroom was $2,800, up 4.4 percent from the previous year. A two-bedroom in San Jose rented for $3,040, a 3.8 percent increase from last May. Rent on a two-bedroom in San Francisco stayed flat from the previous year at $4,500.

The national housing council survey did not offer details on specific cities, but one analyst said he was keeping an eye on the San Francisco and East Bay metro area in coming weeks. “The results were not bad, but they came in below expectations,” said Greg Willett, chief economist for RealPage. He also noted weaker than expected results in Seattle, Atlanta and the Washington, D.C. metros.

Renters in four metros were particularly hard hit — New York, Los Angeles, Las Vegas and New Orleans, he said.

Other, smaller housing reports have hinted at growing problems. A survey of 4,000 renters and homeowners by Apartment List found nearly one-quarter did not pay their full mortgage or rent payment in April. However, most of those payments were made up by the end of the month.

The number of partial or non

payments in the beginning of May rose to 31 percent, according to the survey. Roughly 8 in 10 respondents said they made at least a partial payment for the month, down from about 9 in 10 renters and homeowners making payments in April, according to Apartment List.

The national housing council report found payment rates slightly below the same periods from last year. In April 2019, 97.7 percent of renters made payments, compared to 94.6 percent for the full month of April this year, according to the industry trade group.

In the first week of May last year, 81.7 percent of renters made at least some payment, while payments dipped to 80.2 percent this year. The report looked at professionally managed apartments around the country.

Adler said the combination of unemployment and stimulus checks, along with the determination of renters to not miss payments and protect their credit scores, contributed to the strong showing.

Real estate professionals urged caution in the weeks and months ahead.

“The May number was very heartening and a bit surprising,” said NMHC president Doug Bibby. But, he added, “There are a growing number of warning signals percolating out there. Those are what we have to watch very carefully.”