Behavior Patterns Similar to Those of Market-Rate Tenants
Solon, Ohio – June 23, 2020 – Although COVID-19 has had an outsized economic impact on residents of public and affordable housing, it has had minimal impact to date on rent payments or move-outs, according to a new report by MRI Software (“MRI”), a global leader in real estate software solutions.
The report, which compares data from more than 1.5 million active affordable and public housing units in February-May 2020 and February-May 2019, revealed patterns similar to those highlighted in MRI’s recent report on the conventional multifamily sector and the National Multifamily Housing Council’s Rent Payment Tracker.
Notable findings include:
- Stable rates of rent payments: These are close to pre-pandemic rates, and there has been little change year over year. In May 2020, rates of payments by residents of public housing dropped only 2% from May 2019. For residents of affordable housing, which serves a relatively higher income group, rent payments declined 10% year over year for May, while improving 3% from pre-pandemic levels in February 2020.
(For comparison: The NMHC’s Rent Payment Tracker showed that 89% of market-rate households had paid June rent as of June 13, 2020, a 0.1 percent increase from the share who paid rent by June 13, 2019.)
- Low turnover: Over the course of the pandemic, there has been a significant decline in applications, new admission certifications, and move-out certifications compared to the same period in 2019. The decrease for all three metrics reached nearly 40% in public housing and similarly ranges between 30% and 40% in affordable housing.
(For comparison: MRI’s report on the conventional multifamily sector showed a drop of 21% in move-ins to market-rate apartments between February-May 2020 and February-May 2019.)
The full Market Insights Report on Affordable and Public Housing can be downloaded here.
“We expected to see a less positive picture in the affordable and public housing sectors than in the conventional sector given the seemingly more acute impact of the pandemic on this population, but the trends are surprisingly similar, says Brian Zrimsek, Industry Principal, MRI Software. “Like tenants of market-rate units, tenants of affordable and public housing units seem to be staying in place while also prioritizing rent over other expenses.”
Zrimsek warns that the situation could change in the near future without a new stimulus package or an extension of enhanced unemployment benefits. “The labor market heavily influences the real estate market,” he notes. “The real estate industry is facing uncharted waters as a result of the scale of the impact of COVID-19. To date, rental payments and occupancy rates have remained high due to enhanced unemployment benefits and eviction moratoriums. As businesses reopen and safety nets are removed, then we will see where the rocks really are.”
Zrimsek will discuss the report and trends in both sectors during a webinar on Thursday, June 25 at 2 p.m. EDT along with special guests from Nexus, G5, Landlord Web Solutions (LWS), ServusConnect, and Zego.
About MRI Software
MRI Software is a leading provider of innovative real estate software applications and hosted solutions. MRI’s comprehensive and flexible technology platform coupled with an open and connected ecosystem meets the unique needs of real estate businesses – from property-level management and accounting to investment modelling and analytics for the global commercial and residential markets. A pioneer of the real estate software industry, MRI develops lasting client relationships based on nearly five decades of expertise and insight. Through leading solutions and a rich partner ecosystem, MRI gives organizations the freedom to transform the way communities live, work and play while elevating their business and gaining a competitive edge. For more information, please visit mrisoftware.com.
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