Spending Stimulus on Rent: How COVID-19 is Affecting Rental Housing – Recent Survey Illustrates the

The impact of COVID-19 and our efforts at slowing the spread of the virus are shaping both long-term and short-term plans for virtually everyone across the country. For the rental housing business, the uncertainty brought on by the pandemic is altering plans, demanding new practices, and multiplying stress for everyone.

To help us gain a deeper understanding of the virus’ impact and better navigate a path forward, Entrata reached out to over 1,000 renters across the United States. The results, compiled in our report “Renting in a COVID-19 World,” provided a clear snapshot of the challenges facing the rental market and highlighted many of the leading efforts at responding to the problems.

Renters Scramble for Relief From the Pandemic

As COVID-19 rapidly spread across the country, the most immediate challenges were faced by renters. Stay-at-home orders led to a wave of closing businesses and unemployment claims – millions of people who could not work from home or did not have a job that is deemed essential were jobless, virtually overnight. Congress quickly voted for a stimulus bill to help people cover expenses, and nearly 60 percent of renters used the full or partial amount of their $1,200 stimulus check to help pay rent.

The ever-widening impact of the pandemic had a massive, unprecedented impact on short-term housing plans for many people, as reflected in the study results. Nearly half (42%) of renters were forced to make quick, unanticipated changes, including renewing a current lease instead of buying a home (16%) and moving in with relatives or friends (7%).

Other people sought financial relief by moving to a cheaper apartment, as reported by 13% of total renters. Moving to a less-expensive place was reported in higher levels among respondents who were married or in a domestic partnership (20%) as compared to single renters (8%), likely due to job losses among couples who need both incomes to cover expenses.

Property Owners and Managers on the Hunt for Longer-Term Solutions

Although the challenges of mass unemployment hit renters first, the impact was inevitably felt by managers and operators of rental properties. Unsurprisingly, the majority of renters (58%) wanted management to forgive or defer rent to help those affected by the pandemic. Although rent forgiveness even became a political talking point in several national campaigns, most managers cannot afford to simply forego charging rent.

At the same time, both management and renters appear to understand the challenges each other are facing and are working hard to be flexible, according to the study. Around 37% of renters indicated that management had waived late fees since COVID-19 set in, and over 66% took advantage of the opportunity to pay rent later in the month. Overall, only 18% of renters indicated they were unhappy with their management’s response.

COVID-19 Exposes Renters’ Deeper Concerns with Personal Finances

Few people escaped the first few months of the COVID-19 pandemic without scars. Even those who did not have to reckon with the actual virus still found themselves making urgent decisions about finances and lifestyles. Among renters, nearly 80% significantly cut their regular spending.

Many renters reported not having much in the way of savings, which could be a more significant long-term concern than the pandemic. Nearly 40% had less than $1,000 in savings and 20% said they didn’t have any savings at all. It should not come as a surprise, then, that 22% of renters in the past six months requested a postponement or cancellation of rent due to COVID-19, and 17% were unable to pay their rent.

Though the rental community is facing unique challenges right now, I am encouraged by the willingness of apartment owners and operators and America’s renters to cooperate as recovery efforts are implemented. I am optimistic that despite the pandemic, we will see continued stabilization in the industry as we bring a close to this year and move forward into 2021.

Chase Harrington is the President & Chief Operating Officer at Entrata. Entrata, Inc. operates as a software development company offering property management software that brings all the websites, accounting, utilities, and other information on one unified platform. Entrata provides applications for management, marketing, and leasing solutions. For more information, go to www.entrata.com.