Rent collections in affordable housing properties dropped to a 2020 nadir in July, while public housing rent collections bounced back from June, according to real estate technology company MRI Software.
The rent collection rate in affordable housing during July was 76% of July 2019’s rate — the first time that ratio has fallen below 80% all year. Consider that the rent collection rate of professionally managed units in late July this year was just 2.1 percentage points off the rate from late July last year, and the data distinctly suggests that challenges for affordable housing tenants are rising.
The dropoff is stark compared to the monthly rebound in public housing rent collections. The collection rate in public housing during July was 98% of July 2019’s rate, up from 78% in June.
“It’s clear that tenants of affordable and public housing are more vulnerable than those in market-rate units at this point in time,” said Brian Zrimsek, industry principal at MRI Software. “As the pandemic-driven recession continues, the mixed results we’ve seen over the past two months further underscore the fragile situation of many affordable and public housing tenants.”
Pandemic-driven economic uncertainty has also driven many renters in affordable and public housing to decide to stay put. Rental applications for affordable housing in July were at only 23% of the level seen last year, down from nearly 40% in June. Public housing applications are at 51% of last July’s level, though volume has grown month to month.
Move-out certifications in July were also far below 2019 levels — 20% for affordable housing and 52% for public housing. In comparison, applications for market-rate properties were at 81% of last year’s level in July, while move-outs were at 75% of July 2019 levels.
With labor market losses during the coronavirus crisis disproportionately impacting renters compared to homeowners, Zrimsek said that conditions for affordable and public housing tenants remain delicate.
“The next few weeks will be telling, especially if there is a sustained drop in unemployment assistance,” said.
