As May 1 approached, fears began to spike among landlords that their tenants would not be able to pay rent. Millions of Americans had already not paid April rent, and that number was expected to rise in May, as more people ran through their meager savings and struggled with the consequences of layoffs, furloughs, and lost income.
Though it’s not easy to find hard data about exactly how many people in the U.S. couldn't or didn't pay May rent, a survey of 4,000 renters and homeowners from the real estate website ApartmentList found that nearly a third of them haven't fully paid May housing costs, with 22 percent saying they hadn't paid at all and 9 percent saying they had made a partial payment. The portion of people who made full rent or mortgage payments was just 69 percent, down from 76 percent in April, a difference driven by 10 percent more respondents saying they hadn't been able to make any payment at all.
It's another sign of how deeply the pandemic has harmed the economy and devastated so many people's personal finances. Though there have been efforts to provide relief to individuals, ranging from enhanced unemployment payments to individual cities' rent relief programs and bans on rent increases, those clearly haven't been sufficient. State unemployment systems are rickety and sometimes designed to be slow and hard to navigate, and have therefore not provided payments to millions in a timely manner. Eviction and foreclosure moratoriums ensure that people cannot be legally forced from their homes at least, but in many cases those who can't pay will eventually be kicked out; in Texas, an eviction moratorium is set to expire in the middle of May.
An equal proportion of renters and mortgage holders were unable to make payments in March, according to the survey, but most of the pain was being felt by the poorest households, with 41 percent of those earning less than $25,000 a year being unable to make a full payment in May compared to 23 percent of those earning more than $100,000.
The good news in the ApartmentList data is that by the end of April, only 1 in 10 of respondents hadn't made their rent or mortgage payment for that month, suggesting that many people have been able to come to an accommodation with their landlord or lender, or else were able to get stimulus or unemployment money. The bad news, said ApartmentList Chief Economist Igor Popov, is that 16 percent of those who were able to pay in full and on time at the beginning of April haven't made any payment in May.
"That's a worrying number because those are the people financially solid enough to settle up on time in April, and they're having a hard time in May," said Popov. "Even though there's optimism that there might be some money in the pipeline coming for people, either through work or from policy, it just gets harder to sustain whatever runway you have in the second month of pandemic housing bills because of the massive job loss and economic loss we're seeing."
Coupled with the finding that 60 percent of those who couldn't pay in full in April haven't paid anything in May, that number paints a grim picture of people stretching their budgets and trying to negotiate with landlords, but still coming up short. Despite widespread and well-publicized calls for tenants to engage in "rent strikes" to pressure landlords and policymakers to waive rent and mortgage payments for the duration of the pandemic, no city or state appears to have taken that radical step.
One counterintuitive finding of the survey was that more renters and homeowners were confident they could afford their housing through the end of June. There may be a widespread assumption that with many states slowly easing restrictions (some in ways that will expose workers to danger), the economy will begin to recover, and the worst of it is over.
Popov isn't so sure—it all depends on whether the U.S. can put a lid on new COVID-19 cases and deaths. "If we have passed the peak from the standpoint of coronavirus deaths, it will be very natural to believe that we're past the worst of it in the housing market," he said. "If we're entering the fall with COVID-19 taking another chomp out of the economy, that's going to throw things into a whole new state of worry."
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