Yardi Matrix Research Director Paul Fiorilla sheds light on the policies, economic issues and market trends that are challenging the industry.
The apartment industry is facing the national spotlight related to a potential wave of evictions just as multifamily fundamentals are hitting unprecedented heights.
Although this juxtaposition seems contradictory, it illustrates both the bifurcated COVID-era economy and the apartment market. Larger, professionally managed properties that cater to a more upscale tenant base are performing better than assets and tenants in smaller properties. “It’s a tale of two different worlds,” said a researcher at an industry trade group.
What’s more, the bifurcation exposes vulnerabilities in the rental housing market—such as the need for better aid mechanisms, the need to relax limitations on supply, and the need for better data in the middle market segment—that must be fixed to solve the nation’s longstanding housing woes.
EVICTION BAN IMPACT
The Centers for Disease Control and Prevention (CDC) last week announced the controversial extension of its eviction moratorium through Oct. 31 in areas hard-hit by COVID-19. The government was responding to pressure from advocates for the poor, who warned that unless the eviction ban was extended, millions of residents could be evicted and possibly thrown into homelessness.
Studies by Moody’s Analytics and the National Equity Atlas (NEA) put the number of renter households that are behind on rent payments at 6.4 million. Moody’s estimates that at midyear, tenant households owe an average $4,270 in back rent totaling $27.5 billion, while the NEA estimates that the average household in arrears owes $3,300 totaling $21.3 billion.
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