Covid-19 Hurts US Build-to-Rent Sector
The US build-to-rent sector is struggling with the onslaught of Covid-19 issues from construction bans, delays and almost a third of tenants failing to pay rent.
Only 69 per cent of households paid rent by the first week of April compared to 81 per cent by 5 March and 82 per cent the year before, according to the National Multifamily Housing Council.
The developer and rental property advocacy group also found 55 per cent leading build-to-rent construction firms were experiencing delays at the end of March as Covid-19 cases increased rapidly.
Permitting issues (76pc) and construction moratoriums (62pc) caused the most delays with 73 per cent of companies implementing strategies to deal with hurdles.
Construction on non-essential sites was banned in many cities including New York, Boston, Seattle, San Francisco and Detroit.
Related: ‘Social Distancing’ on Sites Buys Construction Sector Time
US multifamily construction firm Covid-19 strategies
| Responses from firms experiencing delays | |
|---|---|
| Impacted by material availability | 24% |
| Impacted by labour availability | 41% |
| Sourcing materials from alternative locations | 43% |
| Sourcing alternative building materials | 16% |
| Using technology to replace in-person transactions like inspections and approvals | 67% |
| Staggering shifts to reduce on-site exposure | 52% |
| Offering workforce incentives or other benefits | 14% |
Source: 2020 NMHC Construction Survey to 1 April
NMHC president Doug Bibby said a range of surveys assessed the impact of Covid-19 on the US build-to-rent sector, which included a a rent payment tracker for 13.4 million units.
“The Covid-19 outbreak has resulted in significant health and financial challenges for apartment residents and multifamily owners, operators and employees in communities across the country,” Bibby said.
“However, it is important to note that a large number of residents met their obligations despite unparalleled circumstances, and we will see that figure increase over the coming weeks.”
The US federal government had a similar economic response to the virus as Australia's rental moratorium and coronavirus stimulus package.
Many multifamily property owners were granted mortgage relief by the Federal Housing Finance Agency providing tenants impacted by coronavirus unable to pay rent were not evicted.
To support individuals, businesses, governments, education and the health system a US$2 trillion (A$3.1tn) bill known as the Coronavirus Aid, Relief and Economic Security Act was passed and included cash payments to individuals and benefits to businesses.
Covid-19 cases in the US reached 682,456 at the time of publishing while Australia sat at 6,394.
