U.S. Rental Assistance: What You Need to Know
Following the pent-up demand of 2020, the U.S. rental market is currently very competitive with prospective tenants outnumbering available rental properties. This imbalance has led to increasing rental rates across much of the U.S. when compared to pre-COVID levels, impacting both houses and apartments. Here we discuss the key challenges, what Cartus is doing to overcome them, and the best practices organizations can follow to help reduce the impact on their mobility programs.
Low availability in the U.S. rental market is being exacerbated by a number of factors. Prospective landlords are choosing to sell their investment homes rather than rent them out, in order to take advantage of the current demand and low interest rates within the real estate market. In addition, as many people have been given the option to work from home, house sales continue to rise to unprecedented levels in some areas of the U.S., which has reduced available rental stock further. At the same time, other homeowners are selling their properties for profit and renting until house prices settle, which is adding to the already overcrowded rental market.
As the pandemic continues to impact supply chains (international and domestic), delays in construction material deliveries has meant a lack of new homes being built. Leading U.S. property management companies estimate the U.S. real estate market’s supply-demand imbalance will drive up rental rates 4% to 5% in key markets this year.
States such as California are particularly challenging with property viewings hard to secure because entire apartment blocks are completely occupied until early October. In these instances, prospective renters are asked to join a waiting list in case of early vacancies.
- Where possible, organizations should adjust their relocation budget to reflect rising rental rates for both apartments and houses, as well as extra relocation costs. For example, offering over the asking price is becoming increasingly common in the most competitive locations and approved rental applicants may be asked for a refundable deposit to secure a “place in line”.
- When scheduling rental tours, give at least three to four weeks’ notice and an additional three to six months to secure a property. This extended time should be built into mobility program schedules before moves are signed-off.
- Stagger groups of renters moving into one location so they are not all competing with each other for limited inventory.
- Extend temporary housing benefits to give employees additional time to search for a permanent rental property.
When scheduling rental tours, give at least 3-4 weeks’ notice
and 3-6 months to secure a property
- To manage their expectations before the relocation process begins, employees should be made aware of current market trends and the impact they may have on the overall relocation experience. For example, multiple, full-day property viewings are often now replaced with virtual or ad-hoc in-person viewings.
- Employees should try to be as flexible as possible when it comes to property criteria (location, size, style). Pets can also be a limiting factor, so organizations should be prepared to offer additional pet deposits/fees if they allow employees to relocate with pets.
- Once a suitable property is found, employees should aim to make decisions quickly (within hours instead of days) and have all necessary documentation ready before the rental tour begins, e.g., letter of employment or proof of job offer, pet resume (a document that serves to reassure a landlord including information around the pet’s size, whether it has been spayed/neutered or declawed, and testimonies from previous landlords).
Stagger groups of renters moving into one location so they are not all competing with each other for limited inventory
How Can We Help?
- Cartus is working with our rental providers across the U.S. to provide our clients with up-to-date market trends, rates, lead times, and available inventory.
- Cartus consultants are aware of the current challenges and are managing expectations when counselling relocating employees.
Find Out More
Download our Mobility Supply Chain Guide to find out the specific challenges impacting the wider industry, what Cartus is doing to mitigate them, and key recommendations to help companies reduce the impact these challenges have on their relocation programs. Our guide looks specifically at:
- Destination Services
- Temporary Housing
- Rental Assistance
- U.S. Household Goods
- Global Household Goods
Look out for more blogs over the coming weeks, which will deep-dive into specific areas of supply chain and the innovative solutions we are providing to help clients navigate the current challenges. Read our previous posts:
Cartus will continue to work closely with our supplier partners to ensure we minimize the impact this situation may have on our clients and their relocating employees.