Shawni Littlehale

COVID-19’s Impact on Rental Housing

/0 Comments/in , , , /by Shawni Littlehale
Share on Facebook
Share on Twitter
Share on
LinkedIn
+

According to a report published on April 8th from the National Multifamily Housing Council (NMHC), about one third of the nation’s apartment residents have not paid their April rent. “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,” said NMHC President Doug Bibby. “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.”

Unemployment numbers are escalating to new highs, with 22 million claims since the crisis began, the highest level since 1940. With the majority of our nation’s newly unemployed unable to pay their rent, New York, Governor Andrew Cuomo placed a moratorium on evictions.  This is welcome news to the renter, but doesn’t provide answers for landlords who are responsible for mortgage payments and other expenses, as Cuomo’s moratorium only applies to residential mortgages, not commercial loans secured by property.  Further, it is not a regulation, just guidance.

The Massachusetts Legislature is currently debating a rental housing bill, with a six-person panel developing a final version of the bill, which is due on Governor Baker’s desk by Friday, April 17th.  Rep. David DeCoste, ranking member of the Joint Committee on Housing, indicated that legislators are close to agreeing on the final provisions of the bill.  Current versions provide renters with a lot more rope to delay payments, though Rep. DeCoste believes that for the long term, rent avoidance parameters will be tightened and made clearer.

In a report sent to state legislators by Skip Schloming, executive director of the Small Property Owners Association (SPOA) asserts:

A critical danger lies ahead if any eviction moratorium turns into widespread nonpayment. Evidence already suggests that it is happening. Like the experience of Lawrence after the 1991-92 recession, widespread abandoned housing, and even many torched buildings, could happen across Massachusetts and the country if widespread nonpayment lasts longer than even two or three months.

Schloming adds that “losing rental income from those able to pay not only stops all rental housing maintenance but stops landlords from paying their property taxes. How can cities keep functioning with a very large reduction in their property tax revenues?”  He suggests that to best serve both tenants and landlords, the current bill should include provisions for nonpayment by the truly needy, and partial or full payment by those who can afford it.

For many landlords, rental income is their only source of income. They are caught between a rock and a hard place, while they await their rent payment, many of their tenants are awaiting unemployment relief.  Nationwide, the majority (22.7 million out of nearly 43.9 million) of occupied rental units  are owned by individual investors, according to data from the 2015 Rental Housing Survey. Half of these units are financed by mortgages. Many real estate owners and their lenders are concerned about a mortgage shortfall as a result of non-payment of rent. Another landlord concern is that with so many tenants at home, their operating costs are rising as they deal with more trash and utility usage.

Whether the tenant has lost his or her job, or the landlord has lost rental income, mortgage foreclosures can lead to a disaster for both landlords and tenants. Only a portion of multifamily loans are federally backed through Freddie Mac and Fannie Mae, which are offering mortgage protection  to help landlords avoid foreclosure as the crisis continues. However, multifamily coverage accounts for only 39 percent of the federally backed loans.

Additional government assistance programs are also currently out of reach to many small property owners.  Under the Coronavirus Aid, Relief, and Stability Act (CARES), most multifamily owners aren’t eligible for paycheck protection loans, since they don’t meet the requirement to dedicate 75 percent of the loan to payroll, which is nearly impossible for small property owners with limited staff.

Perhaps landlords will be able to cover expenses under the additional $250 billion in small business funding that Congress is currently debating how to allocate .  Unfortunately, it may be too late for many who can’t float their expenses.

Get Our COVID-19 News, Tips & Resources!

  • This field is for validation purposes and should be left unchanged.

Related Content

One UMass System, Different Reopening Plans

0 Comments
/
One UMass System, Different Reopening Plans On March 11, UMass…

Foster Family Fixes: Serving Our Most Vulnerable Children with Foster Care Reform

0 Comments
/
Join Joe Selvaggi and Pioneer Senior Healthcare Fellow Josh Archambault as they discuss specific reforms that could improve the current foster care system. Josh shares findings from his recent research, as well as his experiences as a foster parent himself.

Bringing Back Youth Soccer Amidst COVID-19

0 Comments
/
For decades, organized youth soccer has been a staple for teaching…

Pioneer Urges Future COVID-19 Study and Recommendations Task Force to Consider Impact on Nursing Home Residents

After over 5,000 people have died of COVID-19 in Massachusetts nursing homes, Pioneer Institute is issuing an open letter to the state’s future COVID-19 health equity task force that outlines an extensive list of recommendations on infection control and preparedness in eldercare facilities.

Open Letter: COVID-19 Study and Recommendations Task Force Established Pursuant to Massachusetts Bill H.4672

Pioneer hopes the members of this important task force will be appointed as soon as possible and that they will look into recommendations to address Covid-19 among the aged and in the state’s nursing homes. Read our Open Letter.

U-Arkansas Prof. Patrick Wolf on School Choice, Espinoza, & Students’ Civic Prep

0 Comments
/
U-Arkansas Prof. Patrick Wolf joins The Learning Curve to discuss school choice, the Supreme Court's Espinoza case, & students’ civic preparation.

COVID-19 Roundup from Pioneer: Hope for a vaccine; Open Meeting violations; Holyoke Soldiers Home report; COVID & foster care; Re-opening the beaches; the fate of college towns; COVID’s economic toll on Bay State cities & more!

0 Comments
/
Pioneer staff share their top picks for COVID-19 stories highlighting useful resources, best practices, and questions we should be asking our public and private sector leaders.

Announcing the Pioneer Institute & Nichols College Sports Management Policy College Case Competition

0 Comments
/
In recognition of the cancellation of many student internships…

Pulitzer Winner Diane McWhorter on Civil Rights History & Race in America

0 Comments
/
This week on “The Learning Curve,” Cara and Gerard mark the Juneteenth commemoration of the end of slavery with an episode devoted to Civil Rights history. They are joined by Diane McWhorter, the Pulitzer Prize-winning author of Carry Me Home: Birmingham, Alabama: The Climactic Battle of the Civil Rights Revolution.

Coronavirus Hits Back on Communities Who Slowed Their Spread

0 Comments
/
“This couldn’t come at a worse time,” said rep. Bill Keating…

Combatting COVID-19: Life in the MGH Emergency Room

0 Comments
/
Join host Joe Selvaggi and Pioneer Senior Fellow Josh Archambault as they talk with Dr. David King about the experience of being in emergent care during a pandemic and lockdown. They explore the challenges of coping with a poorly understood virus during a lockdown, all while continuing to serve the sick.

New Pioneer Institute Hotline Allows Public to Report Violations of Open Meeting Law

0 Comments
/
With most public meetings taking place remotely as a result of the COVID-19 pandemic, Pioneer Institute has unveiled an online hotline that allows members of the public to report potential violations of the Commonwealth’s and other states' Open Meeting Law.

Pandemic, Lost Instructional Time Reveal Massachusetts’ Digital Learning Weaknesses

A report released today by Pioneer Institute says that the shutdown of Massachusetts schools due to the COVID-19 virus and the shift to online education have exposed the uneven nature of digital learning in the Commonwealth, and calls for state officials to develop programs to create more consistency.

Pioneer Institute Study Calls for Streamlining State Sales Tax Revenue Collection

At a time when state tax revenues are plummeting, a plan to modernize sales tax collection could get money into state coffers more quickly, according to a new policy brief published by Pioneer Institute.

COVID-19 Roundup from Pioneer: Hubwonk: Elections & COVID-19; Update: Mapping COVID Testing; School Reopening; Protecting Civil Liberties, & more!

0 Comments
/
Pioneer staff share their top picks for COVID-19 stories highlighting useful resources, best practices, and questions we should be asking our public and private sector leaders.

Hubwonk Ep. 9: Elections in Epidemics: Keeping Voters Safe & Elections Fair during COVID-19

0 Comments
/
Join Joe Selvaggi and Pioneer’s Mary Connaughton as they talk with MIT Professor Charles Stewart on how states in general, and Massachusetts in particular, are adapting their voting process to keep elections safe, transparent, and fair during the COVID-19 pandemic.

Update: “Mapping COVID-19” Tool Now Shows Testing Data

0 Comments
/
Now, in addition to maps and tables regarding the number of cases and case rates across the state, “Mapping COVID-19” also includes information regarding the testing efforts in the Commonwealth.

MA Commissioner Jeff Riley on Remote Learning, Voc-Techs, & Reforming Boston’s Schools

0 Comments
/
This week on “The Learning Curve,” Cara and Gerard open with commentary on the George Floyd tragedy and K-12 education’s role in addressing racial injustice. Then, they are joined by Jeffrey Riley, the Massachusetts Commissioner of Elementary and Secondary Education, to talk about the unprecedented challenges of COVID-19.