The COVID-19 pandemic has had a huge effect on apartment community renters nationwide with roughly 40 million Americans experiencing stay-at-home orders and practicing proper social distancing. With that being said, a growing number of multifamily residents have needed assistance from their property owners and managers. The National Apartment Association encourages all residents who are in financial distress to proactively reach out to their community managers in order to determine the best strategy for each resident.
Here are some of the ways that owners and property managers have been helping their residents who have been affected by the COVID-19 pandemic:
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Providing a 90-day halt in evictions
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Providing a 90-day halt to rent increases
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Creating payment plans and waiving late fees on a case by case basis
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Accepting credit card payments
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Utilizing deposits to cover rent in the interim
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Completing EMERGENCY only maintenance requests
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Connecting with residents more frequently through social media, emailing, website and virtual group activities such as an online book club, digital boardgames, daily trivia and virtual fitness classes
The FHFA has rolled out mortgage forbearance to federally backed multifamily housing property owners who suspend evictions for those tenants who have been affected financially.
Also, new construction will continue to pause until demand normalizes. Supply networks within the Multifamily industry will experience disruptions that may result in construction delays as well as a rise in material costs, but this could be advantageous to those markets experiencing an oversupply of units. A decline in new construction could help level out any fluctuations in rent growth and vacancies.
According to the National Multifamily Housing Council, the results we’ve seen thus far show that as of April 19th, 95% of occupied apartment lease holders made a full or partial payment, up 26% from April 5th. We have to take into account the potential lag time in collecting and processing rent payments due to apartment community leasing offices being closed while following proper safe-in-place orders. Residents can no longer walk into the leasing office and drop off a check. NMHC has also reported that for comparison, 90% of rent payments were made April 1-12th 2019 and 91% were made during the same period one month prior.
After 3 weeks of tracking rent data, the results are encouraging. The payment programs, deferrals, and government stimulus checks seem to be contributing to this positive result. It is estimated that about 1/3 of renters nationwide are on payment plans.
It’s always good to keep in mind that historically, the apartment sector has been resilient during downturns, and deal volume is slow to react because real estate transactions take time to complete.
Thanks for reading,
Megan McDowellFounder, Modern Gem Design, Inc.