Report: Small Landlords Face Dramatic Drop in Rent Payments
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In a study of two cities, 60% of renters paid in full in June 2020 compared with 77% the same month in 2019.
A new report spotlights how landlords that own three or fewer rental properties have struggled collecting rent and paying their mortgages during the pandemic.
Rental payment rates during the pandemic have dropped only slightly for large, professionally managed landlords, but it’s been a different scenario for small, independent property owners, who are bearing the brunt of the rental crisis, the report states. Small landlords own nearly three-quarters of all rental properties and more than two-fifths of all rental units, according to the U.S. Department of Housing and Urban Development.
The survey, conducted by the Joint Center for Housing Studies of Harvard University and the Bloomberg Harvard City Leadership Initiative, shows that in June, 60% of rent was paid in full to small landlords surveyed in Albany and Rochester, New York, compared with 77% paid in June 2019. In those cities, rental properties were significantly more likely to generate less than 75% of their rental revenue by June 15 (30.7%) relative to June 15, 2019 (13.2%), and just over 25% of the rental properties surveyed generated 75% or less revenue.
By October, rental nonpayment had intensified in low-income and minority communities, but improved in more advantaged neighborhoods. In low-income and minority neighborhoods, landlords have been more likely to evict tenants and less likely to offer rent decreases, the report shows.
Meanwhile, 2.8% of the small landlords surveyed missed mortgage payments, while 8.5% missed property tax payments and 4.5% had tenants facing eviction.
And between March and October, more 30% of small landlords postponed maintenance on their rentals.
Despite the challenges, the New York small landlords surveyed want to recoup losses from tenants. The results indicate that tenants in 13.4% of the properties may be subject to late fees and those in 9.1% of properties may be subject to rent increases. Meanwhile,13.5% of tenants may be facing eviction.
For more information on the findings click here.
Brent Woodie is an associate editor at Route Fifty.
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