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Another picture: I have no words

edited August 10 in Off-Topic
I figured there was going to be a large percentage of evictions for nonpayment of rent but nowhere near this amount

Over 40% of US Renters at Risk of Eviction

Comments

  • That 40% number is definitely eye catching.

    Here is some Household Pulse Data for the 7/15/20 reporting date. It appears this table involves self reported confidence estimates made by repondants. About 32% reported no confidence or slight confidence in making next month's rent payment. I could not find a table clearly showing the share of renter households facing a rental shortfall and potential eviction. And, it's not clear how much predictive usefulness can be obtained from the self reported info in the table I found. (Maybe I misread the table or there is another better table somewhere?) Anyway.....

    Housing Table 2b. Confidence in Ability to Make Next Month's Payment for Renter-Occupied Housing Units, by Select Characteristics: United States

    Source: U.S. Census Bureau Household Pulse Survey, Week 10.

    Occupied with
    Rent................No confidence....Slight confidence...Moderate confidence..High confidence

    70,155,176.....8,888,584............13,715,231..............19,064,077..................27,399,975


    https://census.gov/data/tables/2020/demo/hhp/hhp10.html
  • I wasn't familiar with the Household Pulse Surveys:
    The U.S. Census Bureau, in collaboration with five federal agencies, is in a unique position to produce data on the social and economic effects of COVID-19 on American households.

    The Household Pulse Survey is designed to deploy quickly and efficiently, collecting data to measure household experiences during the Coronavirus (COVID-19) pandemic. Data will be disseminated in near real-time to inform federal and state response and recovery planning.
    https://www.census.gov/householdpulsedata

    Textbook tradeoff of speed vs. accuracy. That's not a knock on the data. It's designed for government rapid response. Yeah, right.

    The Statista page says: "An analysis from global advisory firm Stout Risius Ross estimates that over 40 percent of renter households across the country will experience a rental shortfall during the current crisis with close to 12 million people facing eviction over the coming four months alone. 17 million are set to be impacted over the course of the pandemic"

    I can't get their numbers to add up. Assuming we even know what "the course of the pandemic is", 17M affected out of roughly 70M renters (see @davfor 's data above) is around 1/4, not 40%. Still a shocking number.

    Let's try something simpler. Forget about projecting over four months or "the course of the pandemic." Just stick with who can/can't make next month's rent.

    There are more current figures. Week 12 (the final HPS survey) numbers are here:
    https://www.census.gov/data/tables/2020/demo/hhp/hhp12.html

    Based on these figures, Bloomberg CityLab reports:
    One-Third of American Renters Expected to Miss Their August Payment
    https://www.bloomberg.com/news/articles/2020-08-07/survey-exposes-america-s-looming-rent-crisis

    This 1/3 figure is easy to verify. Plugging the week 12 numbers into davfor's table:

    Occupied with
    Rent................No confidence....Slight confidence...Moderate confidence..High confidence

    69,708,373.....9,854,048............13,905,774..............18,744,318..................26,031,067

    Those who expect to miss their August rent, let alone any later payments, is thus:
    (No confidence + Slight confidence) / Occupied with rent = 34%, as reported by CityLab.
    image
  • No Alaska. No Hawaii. Expenses, especially for rent/mortgage in those States, are YOOGE.
  • There's a renters sheet for each state in the HPS weekly survey spreadsheets.
    https://www.census.gov/data/tables/2020/demo/hhp/hhp12.html

    AK: 25%
    Occupied with
    Rent................No confidence....Slight confidence...Moderate confidence..High confidence

    149,184..........19,628.................17,300...................37,418.......................69,860


    DC: 35%
    Occupied with
    Rent................No confidence....Slight confidence...Moderate confidence..High confidence

    209,195..........20,951.................52,739...................25,416.......................105,714


    Washington DC Metro Area: 33%
    Occupied with
    Rent................No confidence....Slight confidence...Moderate confidence..High confidence

    1,245,567........158,188...............253,388................221,466......................583,411



    HI: 27%
    Occupied with
    Rent................No confidence....Slight confidence...Moderate confidence..High confidence

    307,251..........25,331.................59,085...................103,887.....................111,581


    You mentioned owner-occupied homes (mortgages). Here's the spreadsheet with that data. Percentages are left as an exercise for the reader:-)
    https://www2.census.gov/programs-surveys/demo/tables/hhp/2020/wk12/housing2a_week12.xlsx
  • edited August 10
    @msf Thanks for digging into this. I focused on the 7/15 report because that was referenced in the article. There is a lot of hardship going around right now. So, it's clear there are many in danger of not being able to pay their rent. But, if it gets to the point that 40% really can not pay their rent, it makes sense that landlords will be negotiating with renters. Otherwise, they will be sitting on a lot of empty rental units. That will create an extreme lose-lose situation for both tenants and owners. I just don't see that we are there yet.
  • I figured that you linked to the week 10 report because that was the source of the article's data. Likewise, I used the later data primarily because it was in the CityLab article.

    One would hope landlords would be forgiving, but many times it doesn't seem to work out that way. I can't say how residential leases play out. However, so often I see storefronts vacant for years if not a decade after the landlord raised the commercial rent too high for its existing tenant. It never made sense to me.

    I have read that in the residential arena, the owners of large apartment buildings will do anything but reduce rent: offer free months, free/reduced price amenities, etc. But not drop the rent; never lower the starting point for the next tenant or next year's lease. That sort of giveback is not going to help existing renters.

    With so many people unemployed, its questionable whether tenants can come up with any rent payment, let alone the full amount. And landlords may be leery of deferring rent for someone out of work.

    I wish I weren't so pessimistic here. I agree, it is a lose-lose situation. There are many small landlords who are actual human beings that know their tenants and will work with them. But so many apartment landlords in cities are faceless corporations. And in the aftermath of the GFC and foreclosures, the number of corporate landlords of single family homes has grown also.

    See, e.g. Corporate Landlords, Institutional Investors, and Displacement: Eviction Rates in Singlefamily Rentals (higher eviction rates by corporate landlords than by small landlords in an Atlanta study)
    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2893552

  • edited August 10
    @msf I managed a portfolio of single family home loans in three counties in NW Oregon in the late '70's and early '80's. We literally had a depression there with 20%+ unemployment due to the timber industry grinding to a halt in one of those counties. One of my specialties became processing foreclosures and managing inventory properties. It took about a decade for the area to recover from that downturn. It seems to me that a pending overall 40% eviction rate would imply the country as a whole is currently at a similarly dire point in the residential rental housing space. The next few months will tell us if that is the case. (The three apartment REITs in which I have small investments are not reporting non-payment problems of that magnitude. Rent collections have remained 90%+ so far.)
  • @msf A quick thought about your corporate landlord comment.

    There are perhaps a couple of scenarios looking forward. The base case appears to be that an additional significant stimulus package will emerge from current negotiations. In that case, coupled with somewhat improving unemployment numbers, I think that rent collections will not deteriorate substantially over the next few months.

    The other case is that both sides of the negotiations decide its in their interests to see the economy struggle more than is necessary. That is where your link to the eviction rate article comes into play. I have owned single family, duplex, and condo rentals through the decades. It is my sense that many small owners will work with tenants given the unique nature of this pandemic event, the likelihood its duration will be somewhat limited, and the prospect that finding a replacement tenant will prove to be challenging. Likewise, I suspect that at least some corporate type owners will look at their options in this unique situation and will also decide that at least partial rent deferrals will be in their best interests -- perhaps eventually to be coupled with partial rent forgiveness somewhere down the road. My internal gut meter -- which I prefer to the limited analysis presented in the article @Mark posted -- tells me that evictions in the 10 to 20% range may result in that case. A 40% eviction rate would imply to me everything has gone terribly wrong!
  • edited August 10
    Like msf, I've never understood the situation where storefronts stand empty for years because the former business tenant could not operate successfully with the rent increases, and was forced either out of business, or to move. Having at one time been in a small partnership owning a commercial building, and another owning a four-unit apartment house, we certainly would have preferred to work with a tenant rather than have to go through all of the issues to obtain a new one.

    In the present situation with the potential for a significant number of housing tenants to be unable to meet the rentals, where would a building owner hope to find replacement tenants without drastically lowering the rental fees? Wouldn't it make more sense for the owners to hang on for at least six months or so to see how this all is going to play out?

    What's the point of housing evictions, thus increasing the supply, when there's no demand capable of meeting the rental requirements?
  • "Who're they going to complain to? Their parents?" MBurns of the Simpsons after stealing electrical power from the orphanage.
  • The Census Bureau has continued its Household Pulse Survey past the planned end date at Week 12. It has started a "Phase 2" survey, starting with Week 13. As it notes in its documentation, while it uses the term "week" for continuity, the last survey was conducted over the span of nearly two weeks: August 19 - August 31.

    The Census Bureau has added an interactive graphical page that makes it very easy to look at your statistic of choice and to zoom in on state or major metropolitan region.

    https://www.census.gov/data-tools/demo/hhp/#/?measures=EVR&s_state=

    The survey reports that nationwide a third (33.4%) of "adults [are] living in households where eviction or foreclosure in the next two months is either very likely or somewhat likely."

    In 11 states, that percentage is over 40%, with just six states under 20%. A couple of qualifications: the error bars are huge, and somewhat inconsistently, nationwide the percentage of adults not current on their rent/mortgage or expect to be unable to make next month's payment is "just" 7.2%.
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