Early December apartment rent collections have taken a tumble, according to the latest Rent Tracker data from the National Multifamily Housing Council. In the first six days of December, which is generally a strong indicator of rent collections for the month, renters paid 75.4% of rent payments, a 7.8% decrease from the first six days in November.
The decrease in rent payments is concerning, although NMHC says that only the full month will provide an accurate picture of rent collection trends. However, the decrease comes as the pandemic has surged nationally and some markets have entered a critical phase of the coronavirus outbreak. This has also put more pressure on businesses, employment and individual economic resources.
December 5 and 6 also fell on a weekend this month, which could have contributed to an increase in payments later in the month. As a result, renters that typically pay within the first six days of the month may have a payment come in a few days later, providing hope that rent collections will rebound later in the month.
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The decrease in rent collections could put more pressure on Congress to pass another round of stimulus. The NMHC says that renter assistance will be critical to the next plan, and the most recent talks in Congress are moving in that direction. The latest iteration of the bill includes $300 a week in federal unemployment benefits for four months, $160 billion in funding for state and local governments and renter's assistance. Although the bill was quickly shutdown by Mitch McConnell, who wants a targeted bill with a figure closer to $500 billion (nearly half of the proposed $980 billion bill), it was a sign that both Democrats and Republicans are seriously considering rent assistance.
Renter assistance would benefit underperforming affordable housing. Currently, salary distributions for low-income households is 2.6% below pre-pandemic numbers, and assistance will help bridge the income gap for these renters and their landlords. Many in the CRE community are counting on the Biden Administration to push forward additional stimulus, meaning that it likely won't come until the first quarter of next year.
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Kelsi Maree Borland
