Renters continue to face a tough time paying rent, but the burden is also falling on small landlords. Based on a household level tabulation of the January 6-18 US Census Bureau’s Household Pulse Survey data, 19.2% of renter households, or 8.1 million renter households,1 are not caught up on rent payments2.
Slightly more than half, or 53.4% of renter households, who are not caught up on rent, live in one-family detached and attached homes and 2-to-4- unit properties. One third of renter households not caught up on rent live in one-family homes (detached and attached).3
Missed rent payments have a serious impact on small landlord businesses because 73% of rental properties with 1-to-4 units are managed by “mom-and-pop” landlords who are the owners or have an unpaid agent to manage the property, according to the US Census Bureau 2018 Rental Housing Finance Survey.
33% of renter households not caught up on rent live in one-family detached and attached homes
Baased on a tabulation of the 2019 American Community Survey PUMS data, there were 20.5 million renter housholds who lived in detached and attached single-family homes, 2-unit apartments, and 3-to-4 unit apartments. Of this, 4.2 million are not caught up on rent, accounting for 53.4% of the 8 million renter households who are not caught up on rent.4
Looking at just one-family houses that are attached or detached, there are 2.62 million renter households who are not caught up on rent, or 33% of all renter households not caught up on rent.
About one in five renter household living in a one-family home is not caught up on rent.
Landlords also need to pay their mortgage. It is possible that most of the mortgages that are past due are coming from investors. According to the Mortgage Bankers Association, 2.84 million residential mortgage loans were past due as of 2020 Q4.
To note, the 2.62 million one-family homes account for just 3% of the 93.8 million single-family detached and attached housing units. Given the small share, a wave of foreclosure is not likely which can then affect prices. Moreover, homeowners can currently request forbearance. However, with a third of renters living in single-family homes, renter assistance is required to help renters pay the rent that can then enable landlords, mostly of the “mom and pop” type, to make their mortgage payment and keep their investment property.
$11 billion in monthly renter assistance needed
The $25 billion rental assistance package will immensely help renters pay for missed rent. However, renters continue to need assistance with 14.5% of renter households reporting they have ‘no’ confidence they can pay next month’s rent or will have rent deferred. Another 16.2% have ‘little’ confidence they can pay rent.
If we assume that those who have ‘no’ confidence or will have rent deferred can’t pay 100% of the rent, that amounts to about $7.2 billion per month.
If we assume that those who have ‘little’ confidence can pay half the rent, that amounts to another $4 billion per month.
All in all, about $11 billion per month is needed to assist renters and landlords.
Over a 6-month period, the cost is about $67 billion dollars.
1 Out of 41.95 million households who occupy rental units with a rent payment based on the 2019 American Community Survey Table DP04.
2 NAR tabulation of the US Census Bureau’s Public Use File using housing weights. The calculation excludes the number of renter households with missing/did not report code (code -99) or who saw the question but category was not selected (code -88).
3 NAR tabulation of the January 6-18 US Census Bureau Household Pulse Survey Public Use File and the 2019 American Community Survey PUMS data.
4 Table ACS DP04 official figure of occupied units paying rent is 8.06 million. Using the 2019 PUMS data to tabulate the occupied rental units with rent by type of building, PUMS tabulations yields a slightly lower estimate of 7.85 million.