The Real Estate Apartment Crisis
The typical delinquent apartment renter now owes $5,600, being nearly four months behind on their monthly payment, according to a new analysis. This also includes utilities and late fees.
In total, an astounding $57.3 billion is owed by just more than 10 million renters.
A new analysis from Mark Zandi, chief economist at Moody’s Analytics, and Jim Parrott, a fellow at the Urban Institute, shows the typical delinquent renter now owes $5,600, being nearly four months behind on their monthly payment. This also includes utilities and late fees. In total, an astounding $57.3 billion is owed. This includes all delinquent renters, not just those suffering financially due to the Covid pandemic.
The $900 billion relief package passed in December provides $25 billion for both renters and landlords. It is being disbursed by the states and can be used for past and present rent, as well as fees and utilities. Renters must show that they suffered financial hardship due to the pandemic, have incomes below 80% of their area median income, and are at risk of becoming homeless.
The Biden administration has proposed $25 billion in additional apartment rental relief in its $1.9 trillion stimulus package. It includes an extension of the eviction moratorium through the end of September 2021. That plan is already drawing criticism from Republicans and even some Democrats as being far too expensive. It remains to be seen if any cuts to that plan would come from the rental relief.
Meanwhile, landlords, many of whom are now struggling to pay the mortgages on their properties, are concerned that an extension of the eviction moratorium through September would do more harm than good.
Allocated rental assistance funds do not fully address the $70 billion in outstanding debt nor accruing debt moving forward. The industry simply cannot continue operating under these policies without disastrous harm to housing affordability.