Bay Area renters making fewer payments as pandemic lengthens

A growing percentage of Bay Area tenants missed rent in
September as persistent unemployment and shrinking federal aid
compounded the stress on renters and landlords.

Rent payments in San Jose, Oakland and San Francisco during the
first week of September dropped roughly 9 percent from the previous
year, according to data released Wednesday by real estate data firm
RealPage, among the biggest drops in the nation.

The percentage of renters making at least some payment in
September fell, year-over-year, across the region. The rate dropped
from 92.9 in September 2019 to 83.7 percent this �September in San
Jose and Santa Clara County. During the same period, the rate of
East Bay rent payments fell from 90.4 to 81.2 percent and decreased
in San Francisco and San Mateo County from 91.3 to 82.3
percent.

RealPage market analyst Adam Couch said renters are struggling
more in high-cost markets like the Bay Area. Federal unemployment
benefits early in the coronavirus crisis helped renters pay their
bills. He cautioned that the Labor Day weekend likely delayed
reporting of some payments.

The drop in San Jose, Oakland and San Francisco, Couch said,
“is one of the largest that we’ve seen across the
nation.â€

The extended health crisis has set public officials, landlords
and renters searching for relief and ways to forestall evictions
and widespread displacement. Staggering unemployment, reaching
nearly 8 million in California, has hit service workers and others
hard. About 1 in 5 new unemployment claims filed in the U.S. in the
week ending Aug. 22 were from California.

Bay Area rents, despite recent dips, remain among the highest in
the country. The median price in September for a two-bedroom
apartment in San Jose was $2,750, $2,800 in Oakland and $4,070 in
San Francisco, according to apartment site Zumper.

The region’s rental market has shown signs of weakening
throughout the crisis. Bay Area rent payments also have slipped
monthly since RealPage reporting began in April. In June, for
example, Bay Area payments ranged from 86.9 percent (San Francisco,
San Mateo County and the East Bay) to 88.5 percent (Santa Clara
County).

The crisis has hit hardest among renters in older, less
expensive units known as “Class C,†Couch said. About 65
percent of tenants in these less expensive units nationally made
payments in September, a drop of 10 percent from the previous
year.

The market is also weakening nationally.

About 76 percent of U.S. tenants have made some payment in
September, down from 80 percent at the beginning of the crisis in
May, according to a survey released Wednesday by the National
Multifamily Housing Council. Real estate experts say the decline in
federal aid and sluggish pandemic economy have hurt renter
performance.

Supplemental federal unemployment insurance, an additional $600
weekly, expired in late July. This month, out-of-work residents are
scheduled to receive an additional $300 weekly payment drawn from
Federal Emergency Management Agency funds. Congress has not passed
a new stimulus bill, although negotiations are expected to heat up
this month.

“The initial rent payment figures from September have begun to
demonstrate the increasing challenges apartment residents are
facing,†said NMHC president Doug Bibby. “Falling rent payments
mean that apartment owners and operators will increasingly have
difficulty meeting their mortgages, paying their taxes and
utilities and meeting payroll.â€

Advocates for large and small landlords across California have
called for federal assistance to boost financially vulnerable
tenants and property owners.

Bay Area relief agencies report record demand for their
services. San Jose-based Destination: Home reported receiving 30
times more requests than normal during the pandemic. More than 9 in
10 requests have come from households of color.

The Law Foundation of Silicon Valley has received 2,300 calls
for legal assistance during the pandemic, a dramatic increase from
normal caseloads.

A new state law enacted this month weakened a ban on evictions
for non-payment of rent during the crisis. Tenants cannot be
legally displaced for rent owed between March and August but must
pay at least 25 percent of their monthly bills through January or
face possible legal consequences.

Related Articles

As the courts have re-opened, foundation lawyers have been
representing tenants facing eviction for health and safety reasons.

Staff attorney Caryn Hreha appeared in court this week to
represent a single mother with two school-aged children for a lease
violation. The woman, a nurse, has seen her income dwindle with the
elimination of elective surgeries. She has not paid rent in six
months.

Hreha said the case was typical. “If you’re feeling
overwhelmed and feeling concerned,†she said, “you should ask
about your legal rights.â€

Source: FS – All – Real Estate News 1
Bay Area renters making fewer payments as pandemic
lengthens