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Wednesday, Feb 28, 2024

Pandemic Leaves Property Owners With $2.4 Billion Hole

San Diego County apartment owners have lost an estimated $2.4 billion in unpaid rents since March 2020, according to a study by the Fermanian Institute at Point Loma Nazarene University for the Southern California Rental Housing Association.

“We’re not talking about big real estate trusts with reserves to manage through this kind of crisis,” said Alan Pentico, CEO of the Rental Housing Association.

“Nearly 70% of our members are mom and pop operators who own 15 units or less and still need to make mortgage and tax payments on their properties, even if their residents are unable to pay rent,” Pentico said.

Catching Up

Renters who skipped rent payments cut across all income levels, according to Lucinda Lilley, president of the Rental Housing Association and vice president of FBS Property Management in San Diego.

Half of the landlords surveyed said that they were hit with missed payments.

Among those with significant payment lapses, property owners said that they were owed an average of five months back rent, totaling about $5,000 per apartment, according to the study.

Even so, the study done for the Southern California Rental Housing Association showed that most renters were staying current.

Since March 2020, 86% of tenants paid their rent, according to the study, and “falling unemployment has strengthened tenants’ ability to catch up or continue making rental payments.”

“Rental housing providers have been working with our renters since the pandemic began,” Lilley said. “That’s been our message since this began. We are not at odds with each other when it really comes down to it.”

According to the Fermanian Institute study, 53% of landlords surveyed negotiated temporary reduced rental rates, 47% agreed to waive late fees and penalties, 32% offered a payment plan, 15 % removed the penalty of early lease termination and 11% offered rent forgiveness.

Government rental assistance programs have helped renters and landlords, but Lilley said the programs were difficult for some to navigate.

“When it came to attempting to get rental assistance, in order to obtain it, you had to have access to computers and have the technology to get through it and a lot of them (renters) didn’t have it,” Lilley said.


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