During this period of rising rents, how well has the rental industry performed in terms of timely rent collections?
The median asking rent for a one-bedroom apartment in a multifamily structure increased by 12 per cent year on year in the 100 largest markets in the United States, according to the latest data.
The median asking rent for two-bedroom apartments increased by 14 per cent in the last year.
In 34 cities, asking rents increased by 15 per cent to 28 per cent year on year, according to the report.
Apparently, there has been a perplexing decline in on-time rent payments that began in mid-2019 and has continued through the end of 2021,
with only the months when large stimulus checks – not small ones – were distributed, which enabled more households to make timely rent payments being the exception.
Only 92 per cent of renter families have made their December rent payment at the end of December, the lowest percentage since April 2019, and the lowest percentage since December 2019.
This is down from 93.8 per cent in December 2020 and 95.9 per cent in December 2019.
What sticks out is the downward trend that has been in place for 33 months, which has been broken by the months in which large stimulus checks have been deposited into household bank accounts.
What is also noteworthy is that the $600 shimmies that were distributed at the end of December 2020 and the beginning of January 2021 was insufficient in terms of rents.
Most likely, they were employed to deal with the credit-card hangover caused by Christmas essentials.
Despite the fact that the majority of eviction restrictions have already been lifted, numerous government agencies are currently implementing rent-
and landlord-support programmes to deal with the eviction bans, as well as the lifting of eviction bans.
This was on top of the now-expired infusions of free money provided through programmes like increased unemployment compensation, PPP loans, stimulus payments, and other initiatives.
Actual rent collections from 11.8 million market-rate apartments in multifamily buildings (as opposed to single-family rentals) maintained by corporate landlords were used to compile these statistics.
The 44 million renter households in the United States are housed in these flats, which account for around one-quarter of the total.
NMHC offered this specific pandemic-era rent-collection tracker, which is based on data from companies that sell property-management software to larger landlords.
The data was compiled by the National Multifamily Housing Council (NMHC).
Rent collection statistics for mom-and-pop businesses, single-family rental homes, subsidised affordable housing units,
privatised military housing units, and student housing are not included in this data set.
NMHC stated that “although the tracker is designed to serve as an indicator of resident financial issues,
it is also intended to follow the recovery as a whole, including the efficacy of government stimulus and subsidies.” However, the trend has been deteriorating.
The majority of these apartments are located in expensive urban centres and have upscale amenities.
They are primarily targeted at young professionals with high incomes as well as empty-nesters with high incomes, as a result of a recent boom in apartment building development in such locations.
As a result, tenants are not always the most disadvantaged.
Rent rises on a massive scale, anyone?
This trend in rent collection coincides with a significant increase in market rents in several locations.
Rents for one-bedroom apartments increased by 12 per cent on an annual basis across the country’s top 100 metropolitan areas in multifamily buildings
– many of which are maintained by the same landlords who collected the data in the previous section – according to recent data. In 34 cities, asking rents increased by 15 per cent to 28 per cent year on year, according to the report.
Those are significant increases in size. A 20 per cent increase in a $2,000 rent payment means that the household will have to come up with $400 more per month merely to cover the cost of the rent.
Some of them are large, costly cities, such as Boston, Miami, Austin, and New York, while others are little towns.
Others are in smaller cities with significantly lower rents, where renters are now being dragged over the coals for their actions.
My open letter to Powell has a comprehensive list of those cities, as well as information on their rent increases: Greetings, Mr Powell, Chairman of the Federal Reserve.
Rents are soaring, and people are suffering as a result.
The city that came out on top was Fresno, California, where the median asking rent for 1-bedroom apartments increased by 28 percent year over year and by 41 per cent in two years:
Would you believe that there is a connection between these dramatic rent rises and the poor timeliness of rent payments over the entire universe of 11.8 million renters in apartment buildings?
In the absence of hard evidence, my instinct tells me that when rents are hiked by such a significant amount,
and when rents already account for a significant portion of the household budget, there will be problems.
These rent hikes cannot be dismissed as a blip on the radar.
Even in households where wages have increased by 6 per cent, a 20 per cent rise in rent is a difficult nut to crack. In addition, a bigger proportion of tenants appears to be falling behind on their rent.