6 COVID-Response Strategies for Owners of Affordable Housing Communities

COVID-19 presents a serious problem for the housing industry, as it has exacerbated an already severe rental housing crisis. Affordable housing—a necessity in the best of times—is especially impacted.

The Shortage Before Covid-19

Even before the public health and economic crises brought on by the pandemic, there was a shortage of affordable and available rental housing. This forced many renters to spend more than they could afford, including 8 million extremely low-income renters who spend more than half their income on housing. These low-income renters have little ability to save for a future crisis, putting them one financial shock away from housing instability. In fact, researchers from Columbia University estimate that based on current unemployment levels, homelessness could increase by between 40 and 45 percent this year.

Pandemic Effects on the Rental Market

Making matters worse, the severity and speed of the rise in unemployment is unprecedented. Job losses are heavily concentrated in retail sales, hospitality and restaurants, and in personal care and service. A disproportionate number of employees in those sectors are low-income renters. The $2 trillion CARES Act, with stimulus checks and extended unemployment benefits, has appeared to help renters pay rent during this crisis. While these measures cover much of the housing cost gap for renters who lost jobs, they do little to address previously cost-burdened renters.

Surprisingly, overall collection rates for apartment rents have been only slightly below where they were last year, according to the National Multifamily Housing Council. Through June 6, landlords in the Council’s survey reported that 80.8% of renters had paid June’s rent on time as compared to 81.6% in 2019. However, a review of lower-priced, lower-quality Class C buildings reveals that the share of residents paying rent at Class C properties was just 73.2%. 

The eviction moratoriums afforded to renters by recent government intervention are helping to protect renters from housing instability. But tenants are still responsible for their rent payments and landlords still need rent revenues to operate and maintain their housing units. So, what can landlords do to protect the long-term viability of their properties while also helping to keep this at-risk population in stable housing? Here are some points to consider:

1. Strengthen Your Own Financial Position

Owners should shore up their financial footing as much as possible by requesting mortgage relief from lenders, implementing cost reduction programs, or applying for programs like the Paycheck Protection Program (PPP) and the Fed’s Main Street Lending Program.

Don’t worry about sounding professional. Sound like you. There are over 1.5 billion websites out there, but your story is what’s going to separate this one from the rest. If you read the words back and don’t hear your own voice in your head, that’s a good sign you still have more work to do.

Be clear, be confident and don’t overthink it. The beauty of your story is that it’s going to continue to evolve and your site can evolve with it. Your goal should be to make it feel right for right now. Later will take care of itself. It always does.

2. Stay on Top of Regulatory Changes and Government Programs

Landlords should be closely monitoring government actions and regulations since we are in a very fluid situation and Congress is working on many ways to provide additional assistance.

3. Provide Resources to At-Risk Tenants

Turn your focus to your tenants’ needs. Identify households of acute financial or health risk due to loss of employment or known medical conditions and prioritize their needs. Connecting them with advocates and legal support may mean that they are able to access all the assistance available to them and pay rent on time.

4. Communicate with Your Tenants

It is important to communicate proactively and frequently with tenants across a variety of platforms. Making a Frequently Asked Questions document available can improve the speed and efficiency of responding to inquiries.

5. Limit In-Person Requirements for Payments

Many landlords are eliminating the necessity for in-person rent payments, and within legal limits, encouraging (not requiring) the use of rent drop boxes or online portals for payments and other requests.

6. Expand Rent Payment Options

In regard to rent collection, landlords are deploying a wide variety of approaches for consideration (and in compatibility with lease terms) including:

• Flexible payment plans

• Rental deferral plans

• Waiving late payments

• Freezing rent increases

• Proactively halting evictions

• Reducing rents or forgiving overdue payments in full or in part

• Establishing a charitable fund to provide grant payments or donations on a needs-basis to tenants

The bottom line is that the way through this crisis is together. And, as John Pawlowski, an analyst with Green Street Advisors, stated recently in a New York Times article: “Landlords and renters will share in the pain. We just don’t know what the sharing balance will look like.”

We are still in the middle of the current crisis, but in short order, we will need to consider long-term solutions to ensure future housing stability. Housing cost burdens and instability create serious public health risks that—combined with COVID-19 and the economic recession—put struggling low-income renters into an even more perilous situation.

In my next article, I will look at the intersection of health outcomes and affordable housing.

To see this principle in action, be sure to check out Seneca Communities and our work at senecacommunities.com.