Many industries have successfully adapted to operating in a world with COVID-19. But all commercial real estate sectors—especially affordable housing—should take stock of the pandemic’s lessons and find ways to improve. These four areas are a good place to start.
Adopting digital communication
- Why it’s important: Electronic communication proved critical for affordable housing providers during the pandemic, especially in the early months when details on the virus and corresponding public health guidance were changing quickly. Many landlords relied on email to communicate with their tenants about maintenance services, rental assistance, and health and safety protocols.
- How to improve: Although email remains an important communication channel, you may want to consider adopting digital rent payment tools that offer various options. For example, DMA Companies, which operates over 2,200 total units across more than 20 rental properties, plans to roll out a new program with texting capabilities.
- Remember: You want property communications to be inclusive and accessible for tenants with a wide range of needs. When you evaluate digital communication methods, consider the demographics of your tenants who may speak English as a second language or require tech assistance.
Attracting and retaining staff
- Why it’s important: Operations staff members kept affordable housing up and running throughout the pandemic. They took on critical tasks such as distributing personal protective equipment, performing wellness checks and helping tenants apply for rental assistance. Amid economic uncertainty, holding onto reliable, long-term team members and attracting new employees should be one of your top priorities.
- How to improve: Consider what traditionally draws candidates to the affordable housing industry. Often, that’s a commitment to social responsibility and community building. Emphasizing culture and corporate sustainability could be effective in hiring the people you want.
- Remember: Developing mentorship programs, providing a clear path toward leadership and implementing meaningful diversity, equity and inclusion strategies can go a long way. You can also consider recruiting building residents, who may be especially invested in keeping their homes and neighborhood clean and safe.
Building your reserves
- Why it’s important: When rent payments were on hold, many operators drew on reserves to cover expenses while reducing costs. As the virus becomes endemic and a potential recession looms, now is the time to grow your rainy-day fund to cover at least six months of debts and operating expenses. That means finding ways to make your organization more efficient. “The more efficient your processes, the better you can run your properties,” said Reny Simon, Vice President of Corporate Treasury Consulting at JPMorgan Chase.
- How to improve: Look for easy wins. “Creating economies of scale across your organization is key,” said Angela Kuo, Head of Community Development Banking Treasury Management at JPMorgan Chase. For example, you may use different lawn maintenance vendors across several nearby properties. Swapping paper-based processes for digital ones can reduce expenses for paper, printing, mailing and storage while also streamlining your operations.
- Remember: Your bank can also help you find the lowest cost payment methods, consolidate your banking accounts and make eligible short-term investments. These efforts can not only replenish your reserves, but help you avoid dipping into your reserves in the future.
Increasing business resiliency
- Why it’s important: Business resiliency took center stage during the pandemic with many organizations caught off guard. Whether it’s a cyberattack, natural disaster or pandemic, the importance of planning for an emergency can’t be understated—especially for affordable housing operators, who frequently must work with limited resources.
- How to improve: If you don’t have a comprehensive business resiliency plan, it’s time to develop one. Fortunately, many of the ways you can make your business more efficient may also make it more resilient. For example, using fewer vendors can also reduce your counterparty risk, and digital processes can help safeguard you from fraud attempts.
- Remember: Other resiliency best practices include developing evacuation routes, taking steps to protect against cyberthreats, training staff on hazard prevention and conducting fire, hurricane and tornado drills.
The pandemic took a toll on affordable housing, with some operators dipping into their reserves to keep buildings up and running. To prepare for what’s next—including a possible recession—affordable housing operators should focus on making digital upgrades, attracting and retaining knowledgeable staff, replenishing and increasing their reserves, and developing contingency plans.
The good news is that the resiliency of our industry has been proven time and time again. Affordable and workforce housing property managers will rise to the occasion.
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