MassLandlords launched a new rent collection survey of members and non-members. The survey shows an average default rate of 19% unpaid rent. The impact of the moratorium is landing unevenly hard on some landlords, with 6% of those surveyed collecting no rent in May. The rate of other vacancy (not for renovation, rent, or sale) has more than doubled.
Rent Collection Survey Background
The MassLandlords rent collection survey is a point-in-time survey. Members can enter the most recent three months of collections at any time, and repeatedly. If a member enters March data in March, and then re-enters March data in April, rent that was late in March may show as paid in April. This allows us to track both late payments across the state, and changes in default rates over time.
Vacancy rate is calculated as a percentage of the number of units being held vacant either 1) for renovation, rent, or sale, or 2) for other reasons. “Other reasons” may include reserve for personal use or unwillingness to risk renting to a bad tenant.
Hardest hit is calculated based on three-month rolling sum of total rent owed vs. total rent unpaid.
Vacancies Consistent with Spring Turnover, Unwillingness to Rent
The number of units held vacant for renovation, rent or sale was between 5% and 7%, consistent with a spring market and mom-and-pop landlord operations. (Few mom-and-pop landlords can execute a “zero vacancy” turnover, in which a renter leaves on the last day of the month and a new renter enters the next day. It is typical for any unit turning over to be held vacant for up to a month for repair, cleaning, and marketing.)
The number of units held vacant for other reasons more than doubled, from less than 1% to more than 2%. This is consistent with fear of renting an apartment under the eviction moratorium. It would be less costly to have a vacant unit than one with a renter consuming utilities, exacting wear and tear, and refusing to pay.
Cumulative Arrearage shows Three-Month Default at 19%
Survey respondents reported between 719 and 1,519 units for March, April, and May each. Confirmed nonpayment exceeded $600,000, working out to a cumulative default rate of 19.2%.
Impact of COVID-19, Shutdown, and Moratorium Land Unevenly
Between March 2020 and May of 2020, the number of landlords experiencing more than 20% nonpayment roughly doubled from 23% to 45% of respondents. Although 35% of May respondents reported that they had received all of their rent, 6% of respondents reported that they had received none of it.
Tell us if you've been paid and if you're holding units vacant or trying to rent them.