The COVID-19 crisis has forced sudden, intense stresses into a rental market already facing an affordable housing shortage. From renter unemployment and underemployment to eviction moratoriums to the added complications of property management in a pandemic environment, there is uncertainty surrounding what the future holds for both renters and landlords. Since early June 2020, HousingLink has engaged in multiple efforts at trying understand how both renters and landlords are coping in these extraordinary times.
Rental Housing Trends in a Pandemic
A Presentation in Home Line's COVID-19 Webinar Series
On September 9, 2020, HousingLink presented on Rental Housing Trends in a Pandemic
for Home Line
's COVID-19 Webinar Series
. See a video of the full webinar below (HousingLink's presentation begins around the 19-minute mark).
Pandemic Challenges Faced by Minnesota Landlords
New survey findings and recommendations to policy makers
Read Full Report Here
In September 2020, Family Housing Fund and HousingLink surveyed landlords managing smaller rental properties and smaller rental portfolios to gain insights into how these landlords perceive the rental crisis, its impact on their business, and their relationships with tenants. A primary goal was to fill the knowledge gap on rent payments for properties with fewer than five units and learn how landlords with small portfolios are weathering the pandemic.
The results of the survey indicate real concerns among the small-rental market and suggest that the scope of the need has been underestimated. More than half of owners of smaller properties engaged in this survey said they have at least one unit with rent past due. Importantly, three in five landlord-respondents are considering a change to their business model if there is not additional assistance for renters or landlords, which suggests significant future instability in this part of the rental market. While greater detail on findings by portfolio size are outlined below, the full survey results offer three primary takeaways.
- Twelve percent of all landlord respondents reported an inability to cover operating costs and other financial obligations or an inability to continue operating their rental business due to pandemic-related challenges.
- Twenty-nine percent of landlord respondents report that their tenants have applied for one or more emergency financial resources. Fourteen percent report that their tenants applied but did not receive assistance, indicating there are tenants and landlords in need of support but unable to utilize available resources.
- If no additional rental assistance comes available, respondents indicated the following likely outcomes:
Deferral of property maintenance (37% of respondents),
Building owners incurring additional debt (29% of respondents), and
Building owners putting their buildings up for sale (27% of respondents).
For more findings and analysis, read the entire report: Pandemic Challenges Faced by Minnesota Landlords
Paying Rent in the Pandemic: A Renter Survey
Following local property management surveys over the past couple of months that show a majority of tenants staying current on rents, we realized a piece of information was missing. The rent survey is against a backdrop of most households having received some form of Federal assistance in the form of a stimulus check and/or enhanced unemployment via the CARES Act. With the unemployment boost ending at the end of July and the Governor's executive order prohibiting evictions set to expire on July 13, there is a lot of concern about what this portends for renters in August and beyond.
HousingLink decided to step into this from the renters' perspective to get not only at "are you staying current on rent?" but into questions such as:
- "How important has your stimulus check or unemployment boost been in helping you pay your rent since April?" and
- "Knowing that the Federal Government’s $600/week unemployment insurance ends on July 31, how do things look for you after that if there is not more assistance provided?"
We received responses from 926 renters who affirmed our concerns about the precarious situation in which most low- to moderate-income renters find themselves. Here are a few findings:
- Those staying current on rent have fallen from 91% to 72%.
- An alarming 70% of those already employed have lost their job or hours during the pandemic, with only 20% of those expecting to be back to working at full capacity by July 31.
- 26% of respondents do not believe they will be able to continue paying rent after July 31. This does not include those who will be able to pay rent but at the expense of other bills.
These survey results are painting the picture of lower-income renters. 90% of households with active HousingLink renter accounts make under $44,000/year. These are the the households most likely to be paying rent on a check-to-check basis, and as these survey results show, they have been hard-hit by loss of work and hours.
Rent Payments During a Pandemic: A Landlord Survey
Recent surveys of larger property management companies have suggested that a majority of tenants have remained current on monthly rent payments. To provide the additional additional market context of "shadow market" properties including single-family and duplex rentals, HousingLink conducted a survey of one-to-four unit property landlords, asking the number of units with rent six days late as of the sixth of the month, and rent 30 days late as of the sixth of the month.
We asked landlords to give us that figure for each month from March through July of 2020, and received 108 responses. Notably:
- Rents 6 days late have have gone from 9% of all units in March to 21% in July.
- Rents 30 days late have gone from 7% of all units in March to 10% in July.
It is important to recall that these findings are against the backdrop of renter assistance in the form of the Federal CARES Act stimulus checks and unemployment assistance (the former of which was a one-time payment, and the latter of which ends at the end of July). 26% of the respondents to our renter survey do not believe they will be able to continue paying rent after July 31 without further assistance.