New Developments: The Pivot Point
By Thom Amdur
4 min read
As the economic crisis triggered by the Coronavirus extends into its fifth month, I am deeply concerned for the economic well-being of the nation’s low- and moderate-income renters. A second wave of infections will likely result in retightening of workplace restrictions and additional people being furloughed, laid-off and/or seeing their hours cut back. Meanwhile, we have no assurance Congress will provide relief by extending supplemental unemployment benefits or creating emergency rental assistance.
Simultaneously, temporary eviction moratoria are beginning to expire around the country.
An increase in unemployment along with a decrease in government financial benefits will almost certainly lead to a dramatic rise in evictions. In Matthew Desmond’s Pulitzer Prize winning book Evicted, we see and feel the impact of evictions on individuals and families – and it is traumatic. And yet, as a representative of mission-driven, socially responsible owners of rental housing around the country, I recognize that rent must be collected to service hard-debt, pay property taxes and utility bills and make payroll for critical staff, such as property managers and maintenance workers.
Our country simply cannot allow itself to face either an eviction crisis or destabilization of affordable housing stock.
Neither is acceptable. A public policy approach that only addresses the needs of renters without protecting the housing asset in which they live would be irresponsible and likely unconstitutional. It is my hope that our efforts as advocates and policy makers will be focused on supporting renters in need with short-term rental assistance rather than blanket expansions of eviction moratoria. Ability to pay rent supports the stability of both the renter and the property. What good is it to renters if properties are non-functional?
At this point, anecdotal evidence I have heard from our members is that while non-payment of rent in the subsidized housing portfolio has increased, it is not yet an emergency. This is largely because rents are below market to begin with by nature of the subsidy and also because mission driven owners have showed great fortitude and dedication in working with their tenants to implement payment plans, and to assist them in the application for government or nonprofit sector assistance. But, sadly, this does not help the millions of lower- and moderate-income Americans who are not lucky enough to have won the “affordable housing lottery” and are thus living cost-burdened and often in substandard housing. This raises many new questions for us as a country and as an industry.
Until the economy fully recovers there will likely be millions more income-eligible renters; however, how many of them will have enough income to afford rent of Low Income Housing Tax Credit units that don’t have rental assistance? How many more will be disqualified by renter screening processes because of Covid-19-related credit issues or evictions? For those who lost jobs due to the pandemic, when will jobs come back and where? Will retail shopping come back or is the
Amazonification of the economy now irreversible? What does this mean for workers at retail centers, enclosed shopping malls and Main Street communities? Will jobs in the hospitality and service industries come back in the same proportion that they existed before Coronavirus? If they do, will they be in the same locations? Will America reverse its decade old trend of urbanization and revert back to another period of suburbanization? How will this overlay with economic changes related to climate change? If we experience a second great migration, is the housing we built over the last generation (affordable or otherwise) in the right location? What about the housing that is currently in the pipeline?
In the short term, this is a clarion call to not waste any more time before we expand affordable housing production resources so we don’t find low-income renters in this same situation when the next natural disaster or pandemic resulting in a financial emergency strikes. But, in addition, we need to apply rigorous study to update our assumptions for where people will live and work and model new potential scenarios of employment, migration and urbanization patterns.
This feels to me very much like a tipping point in our history, a paradigm shift for how and where we live and work and thus how and where we build. Are you ready to pivot?
