National multifamily rent collections in September were slightly better than the same period for the previous month, as the economy continued to recover from historic job losses and business closures due to the COVID-19 pandemic.
Of the 11.4 million households surveyed by the National Multifamily Housing Council, approximately 92.2% partially or fully paid their rents for the month by Sept. 27. This marks the sixth consecutive month that the rent collections rate has topped at least 91% by the end of the fourth week. The strong September collections rate was .1 percentage point higher than the rate in August as of the same period, and only 1.5 percentage point less than the rent collections rate by the same period in the previous year (Sept. 27, 2019).
Experts had predicted a weaker September result as Congress has yet to pass a follow up to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in March.
The first round of federal relief included a $1,200 stimulus check ($2,400 for married couples and an extra $500 per child), an extra $600 weekly in addition to regular unemployment benefits to qualified unemployed workers, and Paycheck Protection Program loans for affected businesses to keep employees on their payroll. These relief policies helped keep the multifamily industry afloat as it ensured people would be able to meet their financial obligations.
However, it’s been months since the stimulus checks were doled out and August was the first month without the additional $600 in enhanced weekly unemployment benefits. Moreover, more than 26.5 million Americans are still collecting jobless benefits as of the writing of this article.
Some relief in the form of the Lost Wages Assistance program, which is paying an additional $300 per week in unemployment benefits to qualifying workers, was granted by a presidential executive order on Aug. 8 (and states are working to close the gaps), but Congress is still deliberating on that new federal relief package amid the background of the fast-approaching presidential election on Nov. 3.
The stronger-than-expected results despite the reduced or expired benefits indicates that the multifamily housing industry continues to exhibit resiliency.
We will continue to monitor useful data for the multifamily housing industry and provide helpful updates to the ArborCrowd community. While there is still much uncertainty about the U.S. economic recovery, the strong September rent collections rate is another indicator of the multifamily industry’s strength during periods of extreme financial turbulence.