We’re all in this together and to help we’ve prepared an information-rich list of resources to help you navigate the impact of COVID-19 pandemic on the multifamily industry.
The effects are making themselves felt in multifamily
First and foremost, we are starting to see the ripple effect of millions of people being out of work. Between March 14 and April 16, 2020 more than 22 million, or roughly 13.5% of the labor force, have filed initial jobless claims, according to reports. Those numbers will likely climb as the shelter-in-place orders remain and more organizations are forced to keep their doors closed or lay off employees.
Not coincidentally, 31% of 13.4 million US renters didn't pay their rent between April 1 and April 5, according to data from the National Multifamily Housing Council (NMHC). The 69% of renters who paid their rent on time in early April is a dip from the 81% percent of renters who paid on time by March 5. We could see that number continue to drop as residents burn through their savings and simply don’t have the funds to pay right now.
TransUnion Consumer Financial Hardship Study: The impact due to COVID-19
Next, it helps to understand the big picture of how more than 3,000 US consumers are experiencing the COVID-19 health crisis financially. These monthly reports are packed with data on the effects on household finance, bill and loan payments, and much more. Get the latest monthly report here.
Stay in the know to protect your residents — and business
Find recent updates, resources and research relating to the COVID-19 crisis, including Federal Legislative/Regulatory Relief and Responses to COVID-19, the NMHC Rent Payment Tracker, and resources and tips for better communicating with your residents.
The NAA has compiled a comprehensive directory of state legal and regulatory information. This is an important one to follow closely as things are changing quickly on a state-by-state basis.
Our best advice: Know the laws. Failing to comply could land you in serious legal trouble, and the last thing you need are lawsuits and fines eating at your precious profit margins. The CARES Act imposes several laws that impact how you manage staff and residents during the pandemic and beyond. For example, it calls for a 120-day eviction moratorium at any property that has a mortgage backed by the federal government (HUD, GSE, USDA loan products) and then prevents the eviction from happening for 30 days more after the moratorium.
This website offers additional guidance on how to manage COVID-19, with a range of webinars and other tools, and bi-weekly Economic Impact Reports that provide updates on economic data releases, forecasts and impacts of the coronavirus on the national economy.
This NMHC landing page includes links to resources from the Center for Disease Control (CDC), World Health Organization (WHO), Department of Labor (DOL), Environment Protection Agency (EPA), Department of Housing and Urban Development and other organizations. Visit it to find the latest news on the outbreak, along with sections on Business Preparedness Guidance, Cleaning/Disinfecting Guidance, Operational Guidance and more.
Our best advice: After the crisis is over, your residents will remember how you responded, how you treated them from a financial perspective, how effectively you communicated, and the steps you took to keep them healthy and safe. Make sure you are doing everything you can for your residents right now. That will be key to holding on to them when things get back to normal.
Financial relief for small property management firms
This loan program provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program. Visit the landing page for loan information, including who can apply and loan details and forgiveness. You can also find lender forms and guidance.
This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary loss of revenue as a result of the COVID-19 pandemic. This program is for any small business with fewer than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19. Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan.
As part of SBA's debt relief efforts, the SBA will automatically pay the principal, interest and fees of current 7(a), 504, and microloans for a period of six months. The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020. And they’re offering other debt relief options, as well.
Our best advice: Do what you can to hold on to your employees, including taking advantage of available resources like those listed above. Just weeks ago, before the pandemic hit, the labor market was tight, and quality workers were hard to come by. If the recession is short-lived and followed by a strong recovery, organizations will be back to battling over talent. Before you layoff employees, consider the cost of replacing them when all this is over too.
A look ahead: Resources for when the lockdowns are lifted
We are seeing a bit of light at the end of the tunnel, as a flattening of the curve may be beginning to happen in California, NYC and other areas. While we don’t know how quickly we can open the country and economy again, we will eventually reach the other side.
Now, is a good time to think about what you can do to better meet potential and existing residents’ needs, fill open units fast and streamline your operations. Here is some additional reading to help you plan.
- The Keys to Getting Residents to Pay on Time
- Self-Guided Tours Bring in Renters — but Are the Risks Too High?
- Credit Scores: Are they telling you the right thing about your prospects? On-demand Webinar
- Lower Your Eviction Rates with the New ResidentScore 3.0
- As Millennial Renters Move On, How Will You Fill Empty Units?
TransUnion can help now and in the long-term
From identifying potential fraud to screening and evaluating the financial health of renters, TransUnion enables you to find quality residents more efficiently. To learn more, visit our Resident Quality Management information page.