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Solon, OH: Rent collection in affordable housing continues to lag as the pandemic wears on, according to the latest report from proptech firm MRI Software (“MRI”). Year-over-year collection rates in public housing remain comparatively high. Meanwhile, tenants in both sectors are staying in place.
MRI’s report compiles data from more than 1.5 million affordable and public housing units throughout the U.S. in January-August 2020 and January-August 2019. The analysis comprises both year-over-year and month-over-month comparisons.
Highlights of the findings include:
• Rent collection in affordable housing in August 2020 reached only 77 percent of 2019 levels. The July 2020 rate was 76 percent of July 2019.
• The rates of rent collection in August 2020 remained relatively strong in public housing, at 94 percent of August 2019 levels. July 2020’s percentage was 96 percent of July 2019.
• Tenants are staying in place. Applications, new admission certifications, and move-out certifications in August 2020 were low compared to August 2019. The same was true of July 2020 compared to July 2019.
Brian Zrimsek, Industry Principal at MRI Software, attributes the divergence between rent collection rates in affordable and public housing to the deeper rental subsidies offered in public housing. A wide range of factors will determine whether the collection rates in affordable housing will improve like governmental assistance, vaccine availability, virus control, unemployment, and reopening.
One factor contributing to tenant stasis is lockdowns, especially in larger urban areas, where many affordable and public housing sites are located. Zrimsek notes, however, that applications and moves are down not only in affordable and public housing but also in conventional housing. “If economic pressures persist across asset classes, we could see increased demand for affordable and public housing from tenants now in market-rate housing and even from homeowners,” he says.
In Zrimsek’s view, there is one certainty amid all of the uncertainty: “The demand for affordable housing will not abate.”