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

Pioneer wants to know how many people with dementia have died in Massachusetts nursing homes. State government can’t even tell us how many people live in them. 

0 Comments
/
Last month, Pioneer Institute sent a public records request to…

Non-Profits Facing COVID-19: Charles River’s Esplanade Association on Why It’s No Walk in the Park

0 Comments
/
Join host Joe Selvaggi as he talks with Esplanade Association’s executive director Michael Nichols about how he and other non-profits adapt to a surge in demand for services while coping with a collapse in fundraising opportunities.

“Call Me Ishmael” Melville Scholar Prof. Hershel Parker on Moby-Dick & Classic Literature

0 Comments
/
This week on “The Learning Curve,” Gerard and guest co-host Kerry McDonald, senior education fellow with the Foundation for Economic Education, are joined by Hershel Parker, the H. Fletcher Brown professor emeritus at the University of Delaware and the definitive biographer of the 19th-century American novelist, Herman Melville.

Let’s Be There For Students

As we head into the new academic year, unsure if remote learning will continue, we must equip our teachers to ensure that all students are offered the consistent, structured, rigorous, and supportive instructional programs that they need to succeed. This video highlights two schools that have successfully transitioned to remote learning.

HHS COVID Funding Tracker

As of July, the Feds have distributed $86.7 billion to medical providers, of which $2.3 billion came to Massachusetts. Pioneer’s new HHS COVID-19 Funding app shows who and how much, from the $1 sent to American Current Care of Massachusetts, to the $418,034,675 sent to the MA Department of Public Health. We also break down the distribution by city or town.

Pioneer Decries New Travel Order as Unnecessarily Intrusive and Divisive

Pioneer Institute is disappointed at certain extreme aspects of Governor Baker’s executive order that goes into effect tomorrow.

COVID-19 Silver Lining: MBTA Takes Advantage of Ridership Lull to Accelerate $8.5 Billion Modernization Program

Pioneer Institute congratulates the Fiscal and Management Control Board (FMCB) and MBTA management for taking advantage of the precipitous ridership declines due to the COVID pandemic to dramatically accelerate ongoing construction projects.

New Study Offers Guide to Recovery in MA Retail, Accommodation and Tourism, and Restaurant Sectors

A new guide to economic recovery in the retail and hospitality industries published by Pioneer Institute calls for the federal and state governments to consider consumption-based refundable tax credits for brick and mortar businesses; the federal government to conduct a detailed study of the costs and benefits of suspending employer-side payroll taxes; businesses to pay special attention to developing and marketing their cleanliness, hygiene and contactless procedures; and third-party customer review sites to include comments about the implementation of COVID safety measures to provide options and reassurance to safety-minded consumers

COVID & Classrooms: Lessons for Students, Staff, & Society on Reopening Schools

0 Comments
/
Join host Joe Selvaggi and co-host Rebekah Paxton of Pioneer Institute as they talk with Harvard Medical School Professor Benjamin Sommers on the most current scientific observations regarding the health and safety of reopening schools.

New Pioneer Study Looks to International Examples to Inform Massachusetts K-12 Schools Reopening

With the fall semester fast approaching, Massachusetts should provide more specific COVID-19-related guidance for school districts about ramping up remote learning infrastructure; rotating in-person cohort schedules; diversifying methods of communication between students, parents, and teachers; and investigating physical distancing capabilities.  Districts must determine whether to adopt in-person, remote, or hybrid schooling options, and they will not be ready for the fall unless the state provides clear direction, according to new analysis from Pioneer Institute.

WSJ Children’s Book Critic & Author, Meghan Cox Gurdon on Reading Aloud to Children in the Age of Distraction

0 Comments
/
This week on “The Learning Curve,” Cara and Gerard are joined by Meghan Cox Gurdon, the Wall Street Journal’s children’s book reviewer and author of The Enchanted Hour: The Miraculous Power of Reading Aloud in the Age of Distraction.

The Virtual Lessons Catholic Schools Can Teach

0 Comments
/
This op-ed originally appeared in The Boston Pilot. By Tom…

A Time to Build

0 Comments
/
The MBTA is taking advantage of anemic low ridership from the…

COVID Transmission: A Scientist’s Insight on What Matters

0 Comments
/
Join Joe Selvaggi and Pioneer Institute co-host Bill Smith as they talk with Harvard Medical School’s Dr. Ed Nardell about his scientific observations on how the novel coronavirus is spread and what can be done to make our schools, buildings, and lives in public safer.

Boston Uni.’s Dr. Charles Glenn on School Choice, Civil Rights, & Espinoza

0 Comments
/
This week on “The Learning Curve,” Cara and Gerard are joined by Dr. Charles Glenn, Professor Emeritus of Educational Leadership and Policy Studies at Boston University. Dr. Glenn shares his early experiences in the Civil Rights movement, and how it inspired his work to expand school choice, as well as his thoughts on the Espinoza Supreme Court case's impact on racial justice and religious liberty.

COVID-19 Roundup from Pioneer: COVID & Air Conditioning; NEW: PPP Loan Tracker; COVID Nursing Home Task Force; Hubwonk: Fixing Foster Care; UMass’ Unique Re-opening Plans & 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.