The economic crisis brought on by the Wuhan Coronavirus in the United States had a major impact on apartment dwellers' ability to make rent this month. According to reporting from the National Multifamily Housing Council and real estate estimates from multiple data providers, nearly one-third of all renters skipped payment for the month of April.
As more than 10 million Americans filed for unemployment benefits at the end of March after businesses were forced to shutter across the country, concern about finances has been wide-spread. At the beginning of the year, the US had more jobs and boasted lower unemployment than ever before. The onset of the virus in March stopped the surging job market and the economy dead in its tracks.
Under typical circumstances, on-time rent payments are still recorded as lower than 100 percent with approximately 81 percent and 82 percent, respectively, in March and April of 2019. The 69 percent estimated for April 2020 by the NMHC and other rental data agencies like Entrata, RealPage, and Yardi, however, shows a precipitous drop in timely payments.
The recently enacted CARES Act provides some relief for landlords with government sponsored mortgages for multi-family rental complexes, but these are estimated to account for fewer than one-third of all rental apartments. Many local laws and temporary policies made in the wake of the pandemic will also prevent many tenants from being evicted or having to pay exorbitant late fees due to sudden job loss.
Some landlords not protected by the federal governments have agreed to make payment deals with tenants that would provide extra time to make up the missed rent on a case by case basis. But as the Wuhan coronavirus continues to take hold across the country and social distancing laws are tightened, many apartment renters remain concerned about falling behind on future rental payments as well.
The HMHC did not provide details about single-family homes or businesses falling behind on rent payments but reports of major chains not having the cash in time for their April installment have been persistent. Luxury fitness chain Equinox did not make April rent payments at several locations in New York City.
The CEO of New York real estate developer Related Companies, Jeff Blau, said that while most of his residential and commercial clients paid their April installment on time, only 26 percent of retail tenants made their payment by the due date.
Related Companies currently controls a $60 portfolio that includes Hudson Yards, a massive, luxury, retail, business, and residential development on Manhattan's West Side. The giant developer also holds the largest private portfolio of affordable housing in the nation and is the parent company to the delinquent Equinox.
Despite the financial struggle of the notoriously expensive Equinox, however, Blau insisted that rent still needed to be paid by hook or by crook.
"It’s a whole ecosystem. The people that can pay need to pay,” he said in a Wednesday radio interview. “Landlords need to help out those that can’t, and then the banks need to help out those landlords that are hurt by people that couldn’t pay the rent ... That’s how this whole thing I think has to get resolved."
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