Affordable Housing Market Gets Some Reassurance About Payments

The sector’s collections and move-out/move-in rates for October look promising, though public housing didn’t fare quite as well in a new report.

Providing a glimmer of hope to the affordable housing sector, rent payments last month reached past 80% year-over-year for the first time since June, according to a new report from MRI Software. The metric did slip a bit in public housing, however. 

Rent payments in affordable housing rose to 82%, while public housing collections dropped slightly for the month to 94%, compared to 98% in September. Also boosting hopes, affordable housing occupancy is tightening as move-outs fell by a “substantial” 17%, and move-ins year-over-year came in at 92%.

“In our previous report, we expressed concern about the collection rates in affordable housing,” said Brian Zrimsek, industry principal of the prop tech firm, in a prepared statement, “but the recent stats are reassuring,”

The picture is different in public housing, MRI’s report noted, “as move-in and move-out volumes are fairly consistent with each other, continuing a months-long trend at 50% to 60% of prior year.”

Explained Zrimsek, “Some people lump the affordable and public housing sectors together, but as our data demonstrates, the sectors respond quite differently to economic, political, and social pressures.”

Meanwhile, both the affordable and public housing sectors can boast that their tenant population largely stayed put compared to 2019, the report said. October showed a continued improvement in new affordable housing admissions, with applications and move outs alike remaining well off 2019’s pace. Public housing also continued to show a sustained decline across the three metrics, with trends continuing well off of 2019 volumes.

The new research comes on the heels of positive reports for affordable housing in September, mixed with some concerning results for public housing. Admission volume for the former property type rebounded to 95% of year-over-year activity, while for the latter it was only 68% of year-over-year performance.

Rent collection for affordable housing still was challenging in the early fall. It fell below 80% of prior year rates in September for the third consecutive month, hitting 78%, though it came in at 98% for public housing. Explains Zrimsek, “Public housing is more cushioned because of its larger rental subsidies. That’s why collection rates tend to be higher than in affordable housing.”

After all of the data, Zrimsek mixed MRI’s optimism with a dose of Coronavirus induced reality.  “Uncertainty remains ahead with COVID case volume on the rise, continued unemployment, lack of stimulus clarity, and a fuller economic recovery all ahead of us. Budgets must be carefully constructed, and multiple scenarios considered before settling on a plan of record.”