Rent collections in the Twin Cities metro during June were down slightly compared with the previous two months with residents of the most affordable apartments appearing to be having the most trouble making their rent payments, according to the Minnesota Multi-Housing Association (MHA).
During the month, 94% of renters in the newest, more-expensive buildings (Class A) paid their rent while 92% of renters up paid in buildings that are generally 10 to 25 years older (Class B). In older, more-affordable apartments (Class C), 88% of renters made their rent payments. No-pay rates for the two previous months were similar, or the same as during June and only slightly behind last year at the same time.
“Our members continue to work with residents who have challenges, but it’s clear that Minnesotans are paying rent when they are able,” MHA President and CEO Cecil Smith said.
Those figures are based on a survey of more than 34,000 market-rate rentals managed by members of the MHA. The National Multi-Family Housing Council (NMHC) said that June rent collections nationwide averaged 80.8%, slightly higher than the previous month.
Though most renters were eligible for $1,200 federal stimulus payments and are receiving an additional $600 per week of federal unemployment support, the MHA issued guidance to members in late March to waive late fees, halt evictions and make payment plans with cash-strapped renters. A statewide eviction moratorium enacted soon after the MHA guidance has been extended to July 12.
That guidance came as stay-at-home orders were implemented and the unemployment rate soared to levels not seen since the Great Depression.
“We’ll continue to track this data to help policymakers and our members understand the rental-market landscape in light of the recession,” said Smith
With expanded unemployment benefits set to end on July 31 and thousands of new rental apartments expected to be completed in the next three years in the Twin Cities, investors and building owners are preparing for a challenging new phase in what had otherwise been a robust rental market.
The Twin Cities has long had one of the lowest vacancy rates in the nation and above-average rent increases. But according to a recent quarterly report from Marquette Advisors, the average vacancy rate in the metro is expected to hit double digits in the coming years.
A recent report from Zillow shows that during April rent increases in the Twin Cities slowed, though it wasn’t one of the 16 major markets where rents fell during the month.
Zillow said that in the Twin Cities metro the average rent during April was $1,534, a 3.1% increase over last year compared with a 4.1 % annual increase during March.