It is no secret that the COVID-19 turned the world on its end. Entire industries ground to a halt overnight, eliminating countless jobs and putting even more on furloughs. Low wage workers who predominately rent have been affected the most, but new research from the Terner Center for Housing Innovation at The University of California Berkley focuses on the effect of the pandemic on landlords and how they are faring.
According to the most recent Household Pulse Survey conducted by the U.S. Census Bureau, about 8 million renters were behind on rent. While research has been done on this topic, less is known about how landlords are handling the pandemic. To fill this void, two nationwide surveys were conducted by the Terner Center and the Joint Center for Housing Studies (JCHS) in order to find out how the pandemic has impacted rental owners' financial circumstances and property management practices.
While the studies were coordinated to be similar, they also differed in a number of ways. The JCHS study surveyed landlords in 10 major cities who participated in emergency rental assistance programs while the Terner Center’s research focused on landlords who own single-family rentals in large cities and suburbs.
“The findings of the two studies—both fielded in early 2021—were consistent,” the report found. “Roughly a third of landlords reported declines in rent collection during the pandemic, although smaller-scale landlords reported more substantial losses.”
As a whole, landlords from both surveys reported significant rent shortfalls. The JCHS survey found that 31% of landlords received less than 90% of the rent collected than in 2019, while 7% collected less than 50%. The Terner Center survey found that 37% collected less than 90% of rent charged while 9% collected less than 50% charged.
Partly in response to the loss of income, landlords were more likely to grant concessions to tenants, defer maintenance, and reduce payments for debt and other expenses during the pandemic compared to a year earlier,” the report continued. “However, the JCHS study found that even after controlling for a greater shortfall in rent, landlords were still more likely to exhibit changed behavior toward tenants. These results provide evidence that the public policies implemented in the wake of the pandemic influenced landlord management practices to help stabilize tenants.”
On a good note, landlords on both surveys viewed evictions as a last resort. The JCHS survey found 23% of landlords reported pursuing eviction of delinquent tenants in 2020, down from 29% in 2019. The Terner Center found similar results in which 1-in-5 are expected to pursue evictions against tenants that are behind, however, this number increased to 70% where renters were behind by six months or more.
The two studies also found that only a minority of renters have utilized federal and state emergency rental assistance programs.
“In the JCHS study, 42% of landlords with a delinquent tenant had received assistance, while the share was one-in-three in the Terner Center study,” the report said. “Both studies also found that landlords owning fewer properties were less likely to participate in or be aware of rental assistance programs. Given the importance of rent assistance to stabilize both tenants and properties, it is clear that more effective efforts are needed to reach both landlords and tenants.”
The joint research as a whole can be viewed here. A total of 4,190 landlords responded to the two surveys which were conducted from February-to-April 2021