Income for the US build-to-rent sector has returned to pre-Covid-19 levels however the industry is not out of the woods yet.
From a survey of 11.4 million apartments in the country 80.2 per cent of households made a full or partial rent by 6 May according to the National Multifamily Housing Council rent payment tracker.
This result came despite more than 1.36 million people becoming infected with the virus since mid-March and more than 20 million people losing their jobs in April.
The drop was only 1.5 points compared to May 1-6, 2019 where 81.7 per cent of households had paid.
NMHC president Doug Bibby said although it was a strong start to the month Congress still needed to support the multifamily sector with $100 billion in direct renter assistance to prevent foreclosures.
“The cascading effect of any rent gap is meaningful,” said Bibby.
“Apartment owners have $1.6 trillion in outstanding mortgage debt.
“If they can’t cover their debt, we might see a wave of multifamily foreclosures that could rival the single-family foreclosures that occurred during the great recession.
“In addition, apartment owners pay $58 billion in property taxes.”
The developer and rental property advocacy group president said firms were in uncharted waters and they would be watching households closely to see if they have enough money to cover rent plus all the other financial pressures caused by the crisis.
“Despite the fact that over 20 million people lost their jobs in April, for the second month in a row, we are seeing evidence that apartment renters who can pay rent are stepping up and doing so,” Bibby said.
“We expect May to largely mirror April, when the payment rate increased throughout the month as financial assistance worked its way to people’s bank accounts.”
At the start of April it was first reported only 69 per cent of households had paid rent however this jumped to 94.6 per cent by the end of the month.
This compared to end of April 2019 where 97.7 per cent of people had paid their rent.
NHMC have now opened the next round of a construction survey for multifamily building firms to chart the impact of Covid-19 on delays which affected 55 per cent of respondents in mid-April.