Rent Payments Down 29% in August as Federal Aid Disappears

A trends report by property management software company Rentec Direct found that rent payments in August of 2020 were down 29% year-over-year and 12% in the last five months, signaling that the expiration of federal aid to offset economic hardship due to the pandemic has a high cost. 

“Our data shows a consistent downward trend in the number of rent payments received by property managers and landlords, dropping more than 12 percent in the last five months alone,” Nathan Miller, president of Rentec Direct, said in a statement. “Many tenants are relying on various temporary regulations that protect them as widespread unemployment and income loss impact the nation, and this means fewer renters are paying their rent.”

While rent payments overall are down, a disturbing trend that has emerged is the reduction in online payments in August, which while not suffering to the degree overall rent payments have, is still significant, as traditionally those paying online tend to make their payments with more regularity. 

(It should be noted that the authors of this study at Rentec Direct offer an online accounting system for online payments)

Online payments were down 11% compared to March of this year, after only dipping 1.6% in July. 

Despite the comparative consistency of online payments versus traditional payments, the number of applications for online rent payment collection decreased by over 9% when compared with pre-pandemic averages. 

The report was compiled using data from Rentec Direct’s anonymized internal data of 620,000 rental properties across the nation. The numbers were for the first week of the previous five months, when most rent is due. The company said it examined payments from January and February of this year as a baseline. 

The White House took executive action on federal assistance for Americans after Congress was unable to come to an agreement over the extension of federal benefits for those on unemployment, who were previously getting an additional $600 a week. That aid ended August 1. 

The executive orders call for $44 billion in disaster relief funds from DHS to be distributed as an additional $300 per week in unemployment aid to the more than 30 million Americans who are currently unemployed. At that rate, the money would run out by the end of September.