6 Stats That Highlight COVID-19’s Impact on Affordable Housing

COVID-19 and its economic downturn have felt more like a natural disaster than a typical recession. Affordable and workforce housing organizations immediately felt the virus’ impact as they navigated city and statewide lockdowns, newly remote workplaces, eviction moratoriums and on-site outbreaks.

Recently, I discussed the effects of COVID-19 on affordable and workforce housing with a group of industry leaders.

The conversation revealed some stark numbers that underscore the issues facing affordable housing. 

Breaking Ground immediately prioritized data collection and contact tracing when 150 of its tenants tested positive for the virus. Although many employees could work remotely, others remained on-site. It was critical to provide these staff members with personal protective equipment and keep them informed so anyone who may have been exposed—tenant or employee—could quarantine. 

Tenants’ mental and emotional health was equally important. Like other affordable housing providers, Breaking Ground began conducting additional wellness checks to combat residents’ increased feelings of isolation caused by COVID-19 restrictions. 

McCormack Baron Salazar worked with its nonprofit partner, Urban Strategies, to raise money for residents who needed rent payment assistance. The national developer raised more than $1 million for tenants in need at its six Memphis properties.

Fundraising and donor engagement were impacted by COVID-19, but developers still found ways to ease the burden of rent payments. Eden Housing was among the panelists that created a rent-relief fund. Bridge Investment Group helped residents apply for rent relief and renewed expiring leases even when tenants were behind on rent. 

Some Eden Housing tenants, however, still prioritized paying rent themselves, knowing that if they lost the housing for which they waited 10 years in some cases, they may not be able to get it again. 

“Generally, the workforce and affordable housing populations are among the more fragile communities in the U.S.,” Morse said. “With the hardships caused by COVID-19, we stepped up to provide support for those most vulnerable residents.” 

Bridge Investment Group’s support included delivering 50,000 meal baskets to residents. Likewise, Breaking Ground pooled its resources to provide groceries for seniors and other homebound tenants who were unable to shop in person.

Breaking Ground received 42,000 applications for 37 low-income units at one of its Brooklyn buildings. The country’s affordable housing crisis is longstanding. Despite recent measures to preserve current affordable and workforce housing via eviction moratoriums and rent control, the need continues to grow.

“Performance metrics remain tight for Low-Income Housing Tax Credit [LIHTC] markets, with vacancies actually improving by 10 basis points to 2.4% in the second quarter of 2020,” said Victor Calanog, Head of CRE Economics for Moody’s Analytics REIS. “However, market-rate rentals have not fared as well. Vacancies have risen to the highest level since the first quarter of 2012.”

Recent legislation implemented a permanent 4% floor for LIHTC projects, one item on panelists’ wish lists. The value of the LIHTC program was previously tied to interest rates set by the U.S. Treasury Department. The 4% floor helps increase the credits’ value and make them more attractive to investors.

Panelists would also like to see expanded Section 8 housing, landlord relief and increased broadband internet access.

“I think we’re all collectively hoping that this will be a very housing-friendly administration,” Weatherly said. “One thing we can do as a group is continue to make our voices heard.”

JPMorgan Chase will finance 100,000 affordable rental units as part of Our Path Forward, the firm’s five-year, $30 billion commitment to drive an inclusive recovery, support employees and break down barriers of systemic racism.

The commitment also includes increased funding for the construction and rehabilitation of affordable housing, additional LIHTC and New Markets Tax Credit investments, expanded financing to preserve affordable rents, and additional financing to Community Development Financial Institutions.

Looking Ahead

COVID-19 defined 2020 in many ways. For workforce and affordable housing developers, the pandemic brought increased communication and engagement around tenant well-being. Developers across the country worked to keep residents safe and provide rent relief, food and emotional support.

As we move forward, it’s important to maintain that focus while pushing for affordable and workforce housing expansion and improvements.