Industry News | Week of March 30
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Multifamily Industry Copes with Coronavirus
With rent now due and novel coronavirus issues currently limiting income for many renters, apartment communities have attempted to account for the myriad issues they’ll inevitably face in the coming weeks. Some of the challenges facing owner/operators include how to offer respite to renters who are struggling financially, how to manage the likely surge in renewals as residents make plans to stay in place, the logistics of move-ins and move-outs, finding new ways to show apartments via 3D and virtual tours, and managing vacancies at a time when apartment hunters are scarce. The reality will be largely unveiled for the apartment industry after most rent payment grace periods expire April 5.
Stimulus Package May Only Offer Temporary Relief for Renters
The $2 trillion stimulus package recently approved by the U.S. Senate to support the economy during the spread of COVID-19 will temporarily help ease the strain on renters who have been impacted financially. But the stimulus checks won’t cover even one monthly payment for renters living in more expensive markets. Apartment building owners can expect that the loss of income from rents will ultimately impact their budgets, if not their ability to meet their own mortgage payments. Housing advocates are calling for bolder measures. In response, Congress recently introduced a bill that would provide $100 million for rental assistance to struggling Americans.
Moving During a Pandemic
Is the virus bringing apartment hunting to a standstill? Not exactly, but according to a survey of more than 6,000 people searching for a rental home, the impact is significant. While 60% of respondents said they are moving as planned, that means 40% are not, which constitutes a considerable share of potential new residents. Another 17% of renters said they have indefinitely decided to stay put while 8% indicated they are delaying their move. Additionally, the number of prospects searching for an apartment home decreased by 25% last week in a comparison with the previous week.
IN THE NEWS
Renters Gain Protection from Eviction During Coronavirus Crisis
Fannie Mae and Freddie Mac initially suspended foreclosures and evictions on only single-family homes, but extended those protections to renters from being evicted if they’re unable to pay their rent due to the impact of the spread of coronavirus. Mortgage forbearance will be offered to multifamily property owners on the condition that they suspend all evictions for renters due to an inability to pay stemming from the pandemic. Property owners can delay their mortgage payments if their property is negatively affected by the national emergency. The program could provide relief for up to 4.2 million U.S. renters.
California Enacts Statewide Eviction Ban
In mid-March, California Governor Gavin Newsom put forth an order that allowed local governments to halt evictions. He upped the ante recently by signing an executive order banning evictions on a statewide basis for renters who have been affected by the coronavirus. The move, which might be followed in several locales across the country, is an effort to provide immediate relief for those struggling to pay rent in April. The moratorium, which expires May 31, includes the provision that renters must declare in writing that they cannot pay some or all of their rent due to virus-related circumstances. Renters are also obligated to pay their past due rent in a “timely manner” after the moratorium.
How Real Estate is Still Getting Deals Done Amid Pandemic
Like virtually everything, real estate transactions are bound to decrease during the pandemic. But that doesn’t mean the industry isn’t finding creative ways to get things done in a social distancing environment. A Phoenix-based condo owner recently sold two units via virtual showing as sellers begin to utilize tools such as Instagram Live, Facetime and other social media channels to display their assets. Videoconferencing tool Zoom has also played an integral role to assist agents with transactions. Unlike the stock market, which changes on a minute-to-minute basis, the extent of real estate market damage won’t be known for anywhere up to 90 days.