Operators and Residents Agree: We Need Help with the Rent
By Joe Bousquin
Recent surveys provide a picture of operators and residents coming together to make the best of a challenging situation and helping each other through tough times.
Three surveys give new insights into the impacts of COVID-19 pandemic on apartment operators and residents, as well as each group’s biggest concerns about the future.
Combined, they provide a picture of operators and residents coming together to make the best of a challenging situation and helping each other through tough times. But they also provide insight into lingering apprehension about the long-term financial impacts the shutdown of the economy and job losses will have on the apartment industry, and residents’ ability to pay rent going forward.
The results come from three sources:
- Joint National Apartment Association (NAA) and Institute of Real Estate Management (IREM) COVID-19 Industry Impact Report (Surveyed operators of 960K units nationally)
- SatisFacts COVID-19 National Renter Survey (Surveyed 100k residents nationally)
- Brightline Strategies COVID-19 Residential Impact Survey (Surveyed 1,100 residents in the Washington, D.C. area)
One critical area that operators and residents agree on in all three has been the importance of regularly updated and clear communication throughout the pandemic.
According to the Brightline data, 7-in-10 residents approved of their apartment management company’s response during COVID-19, while SatisFacts reported that the amount and frequency of COVID-19 related communication from apartment operators was directly correlated to a renter’s intent to renew.
At the same time, operators polled by the NAA put communication at the top of their list in terms of steps they’ve been taking to help manage properties through the crisis.
“Operators are hyper aware that communication is key, and they’re communicating with residents regularly,” says Paula Munger, Director, Industry Research & Analysis at the NAA. “Residents have been really appreciative of knowing what their plan is, and the measures they are taking to keep them safe. So I think communication is a factor for both residents and owners-operators that’s super important right now.”
Another area where residents and operators share common ground is the need for financial assistance to make rent in the coming months.
For instance, operators in the NAA-IREM survey reported providing rental assistance to 21 percent of residents, while 34 percent of respondents to the SatisFacts survey said their apartment management company had offered a rent payment plan.
At the same time, more than half of renters in the SatisFacts survey said they took some kind of hit to their incomes, while 1 in 4 respondants said they experienced a 75 percent or higher cut in their pay. A full 45 percent of respondents in the Brightline survey said they had been furloughed or had work hours cut.
“The main thing apartment operators want to see in the next round of COVID-19 legislation is renter assistance, and that’s what renters want to see as well,” Munger says. “Everyone’s concerned, especially with the extra federal unemployment benefits running out next month.”
While the National Multi Housing Council’s Rent Payment Tracker found that 91.7 percent of renters paid some portion of their rent in April, and 93.3 percent did so in May, those statistics rely on data from property management software, which is typically used by large property management firms.
Munger says many in the industry are concerned that the numbers don’t show the hardships that smaller landlords are facing. That’s especially true for those who charge less rent, the area of the market that’s been hit hardest, according to the SatisFacts survey. It found renters who pay less than $1,000 a month in rent were also the largest group to experience a 100 percent cut in income.
“The renters who are in those naturally occurring affordable properties aren’t in a Greystar or Bozzuto building, so they’re not getting tracked,” Munger says. “That mom and pop who own a fourplex aren’t using that software. So every week, we’re missing a big chunk of the market. We’re concerned those smaller owners and operators aren’t getting captured in those data.”