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Rental market: tenants struggling, landlords too

University of Hawaii Economic Research Organization has published the results of its first monthly survey, designed to help explain how the residential rental market is faring during the extended COVID-19 crisis.   The survey was voluntary, with respondents being rental unit owners or managers.  The results–not surprisingly– are concerning, relative to the health of Hawaii’s economy.

Author Philip Garboden said UHERO wanted to understand if tenants are finding it more difficult to pay their rent, and also what rental property owners are seeing.   He said he wanted to look at the overall rental market.  He had a caution about the results, which was, “it is likely that individuals with more intense opinions about an issue would be more likely to take the time to provide data. Thus, we strongly encourage caution when interpreting any particular statistic. Not only do surveys of this kind have large margins of error, but certain segments of the population may not be adequately represented.”

Statewide, 271 landlords and property managers completed the survey with data on 6,719 rental units in the state.   The survey included 772 rental units on the Big Island.

Garboden says prior to the epidemic, 95% of tenants would have paid their rent by the 15th of the month and fewer than 3% would have 30- or 60- day rent delinquencies. But on August 15th, the number of tenants fully caught up on their rent dropped to 85% and severe delinquencies rose to over 8% of rental households.

Garboden says most landlords and property managers expressed willingness to work with tenants, rather than evict them.  But the study showed a higher vacancy rate than normal, with some renters moving out to live with family.  In addition, UHERO predicts that some will leave the state to try to find work elsewhere.

The Hawaii unemployment rate was at 12.5% in August, according to the State Department of Labor and Industrial Relations–and on the Big Island the rate is reported as 11.8%.

The UHERO survey results include the following about landlords’ perception of tenants’ situations:

Have suffered an economic hardship but paid rent on time. 42.75%
Have suffered an economic hardship and paid rent late. 10.17%
Have suffered an economic hardship and are currently delinquent on rent. 6.67%
Have not suffered an economic hardship but are currently delinquent on rent. 2.99%
None of the above 37.43%

 

Garboden says they want owners or managers of rental property to fill out their survey, even if they did not do so previously, in order to get a true look at Hawaii’s rental market.

For the complete story with results from the first survey on the UHERO web site, click here.

 

 

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