Update: The Impact of COVID-19
#31 — September 16, 2020
Dominium has been focused on our business and operations during this pandemic crisis. These updates provide a summary of both rent collections and information that we have found useful in the work we are doing. We hope that our friends and partners in affordable housing find it helpful and will send other information our way. A collection of all previous updates can be found at COVID-19 Impact Update.
Rent Collections—Lack of Unemployment Benefits Show in Rent Receipts
Through September 14th, 2020 we have collected 85% of charges for the month. 
  • Cumulative receipts are down (4%) compared to August through the 14th
  • Cumulative receipts are down (3%) compared to July through the 14th 
  • Cumulative receipts are down (1%) compared to October 14th, 2019, the most recent month in which the 1st fell on a Tuesday.

In terms of types of properties or receipts:

  • Resident receipts are at 83%, which is down (3%) compared to August through the 14th and down (2%) compared to July through the 14th. They are down (2%) compared to October 14th.
  • Subsidy receipts are at 89%, which is down (6%) compared to August through the 14th and down (8%) compared to July through the 14th. They are down (2%) compared to October 14th.
  • Senior total receipts are 93%, which is down (6%) compared to August through the 14th and down (3%) compared to July through the 14th. They are up 2% compared to October 14th. 
  • Family total receipts are 81%, which is down (3%) compared to August through the 14th and down (2%) compared to July through the 14th. They are down (3%) compared to October 14th.
The chart below shows the distribution of properties on their collection performance in September through the 14th. Out of the 207 properties, 26 have collected less than 65% of September charges representing $0.6M remaining to collect while 28 properties have collected over 96% representing $0.1M remaining to collect. 
The lowest collection category is primarily made up of Section 8 properties which are impacted by timing with changes between resident and subsidy owed charges. The below distribution excludes these properties and follows the expected trends.
Previous Dominium Rent Reports can be found here.
Housing &
Employment News
The CDC released an agency order for a temporary halt in residential evictions to prevent the spread of COVID-19. The halt in evictions is effective September 4 through December 31, 2020 and covers persons making no more than $99,000 in 2020 (or 198,000 if filing taxes jointly) who cannot pay their full rent, are making best efforts to make timely payments as close to full rent, and who would likely be homeless if evicted.

As the pandemic continues, nearly 2.25 million mortgages were over 90 days late in July even as rates drop below 3% for the first time ever. Low rates will help financially secure households, but many more households dealing with unemployment which will only drive up the wealth inequality. Black Knight also reports that Miami, Las Vegas, Orland, New York and New Orleans have the highest delinquency increases.

H.R. 2, a $1.5 trillion infrastructure plan passed in the House in July, includes proposals to expand and strengthen the Low-Income Housing Tax Credit (LIHTC) and tax-exempt private activity bond (PAB). Novogradac estimates provisions in the bill could lead over a million additional affordable rental units being financed in 2020-2030 if the measures are enacted.

Demand for housing in so-called “Zoom towns” has surged outside of city centers, as many millennials who are still employed are now able to work from home. This, combined with decreases in both new construction and house listings has led to prices rising “essentially everywhere except Manhattan and San Francisco.” This situation contrasts sharply with that experienced by lower income Americans, many of whom are unable to pay rent and are moving in with family, so demand is falling. This divergence between lower and higher income Americans has led some economists to believe we are in a K-shaped recovery.

LeaseLock published an article about the increasing need to make housing more affordable during this time, which has led many in multifamily housing to do away with deposits. Deposit checks are often between $500 and $750, which can be prohibitive to those living paycheck to paycheck. Owners and operators are looking at ways to replace deposits by using lease insurance to maintain affordability for residents, but also provide protection for leases.
Economic News
US payrolls increased by a higher-than-expected 1.37 million jobs in August, according to the BLS, lowering the unemployment rate to 8.4%. Optimism about the report is tempered, however, as payrolls remain 11.5 million below the pre-pandemic level, and permanent job losses rose to by more than half a million to 3.41 million.

Weekly new Jobless claims remained high last week, with 884,000 filing for initial state unemployment benefits. Layoffs and furloughs remain prevalent across US industries as the coronavirus lingers, many companies exhausted government payroll loans, and the federal unemployment supplement lapsed.

Forty-seven states have so far signed on to President Trump’s stopgap $300 Unemployment benefit. The benefit goes to supplement most unemployment payments by states.

SunTrust released their weekly Interest Rate Derivatives noting that Phase One of the US and China trade deal passed the first semiannual review since it was signed. Treasury yields were higher and steeper than expected during the last week of August. Also, Fed Chair Powell announced the multi-year review of Monetary Policy Strategy stating that the Fed will target 2% average inflation among other takeaways.

Brick and mortar retailers facing bankruptcy are having issues trying to clear their inventory as shoppers are still hesitant to spend money and shop in store. Liquidation sales are taking longer, and discounts are steeper than before the pandemic. Clothing, jewelry, and shoes are proving harder to sell than household goods, furniture, and sporting gear.

NPR, Robert Wood Johnson Foundation, and the Harvard T.H. Chan School of Public Health just released a study that polled residents in New York City, Los Angeles, Chicago, and Houston, to better understand the economic and health impacts on households. In Houston, 77% of Latino households and 81% of Black households have reported serious financial problems, with a total of 63% of households reporting financial problems compared to 46% nationally. The study also found that 3 in 5 households are reporting serious problems caring for children as well as delays in healthcare.
Pandemic News
New research shows that the coronavirus pandemic is far worse than a single flu season and is more comparable to five flu seasons. The study looks at Beth Israel Deaconess Medical Center in Boston comparing the 119 deaths due to COVID over the last few months to only 34 deaths from the flue over five seasons. COVID patients are also on ventilators longer, around two weeks, compared to three days for flu patients. Also, 25% of COVID patients that required life support had no major pre-existing conditions, which is significantly higher than the 4% of flu patients.

AstraZeneca has paused its vaccine trial due to an unexplained illness in one of its volunteers. The drug maker developed the drug with Oxford University and is studying the vaccine on patients in the US and UK. The affected patient is in the UK and a safety review has commenced pausing vaccinations. They hope to determine if the illness was caused by the vaccine or is unrelated. Despite this, AstraZeneca CEO Pascal Soriot says the vaccine could still be ready by YE 2020.

COVID-19 not only affects the respiratory track, but new studies show that it is also affecting the gastrointestinal tract of patients even after the virus has cleared the airways. Researchers at the Chinese University of Hong Kong are collecting stool samples of patients to understand the viral activity in the gastrointestinal tract, some of the patients’ stool samples tested positive for a week after their respiratory tests were negative.

The Washington Post writes about the proper etiquette of sneezing in the time of Coronavirus. Wearing a mask disrupts the trajectory of many particles from entering the air, protecting others. However, if a mask gets wet while sneezing it becomes less effective and it is recommended to carry a backup.

For the last thirty days, New York’s infection rate has been below 1%, but Governor Cuomo urges New Yorkers to be smart. He said, “Our actions today determine the rate of infection tomorrow.”

In an unusual public letter, drugmakers racing to produce covid-19 vaccine pledge to avoid shortcuts on science as they face pressure to rush as shot to market.

The September 10th episode of the Osterholm Update: COVID-19 discusses the vaccine trial put on hold and the subsequent timeline adjustments to the vaccine deployment, rapid antigen testing, and the toll pandemic is taking on mental health.
IHME has changed their daily infections and testing to project the trajectory of infections based on easing mandates and closures and universal mask wearing.
Other Interesting & Helpful Resources
The NFL returns this weekend to a different sports landscape, but as New York Magazine states sports remains the one of the American institutions to have somehow survived during the pandemic. This season, they held a virtual draft, removed the preseason games, implemented a strict testing protocol, and are ready to open the season with each team deciding if and how they will host fans.

Dentists report an increase in tooth fractures since the start of the pandemic believed to be caused by excessive tooth grinding from stress or muscle tension caused by poor posture at makeshift home work stations. Dentists recommend taking measures like wearing night-guards, de-stressing using deep breathing, and changing positions throughout the workday.

Chiropractors have seen a sharp increase in other musculoskeletal injuries from poor posture while working from home, and recommend taking breaks, moving around more frequently, and setting up a more ergonomic workstation. Occupational Therapists suggest these stretches to help stay out of pain while working form home.
State-by-State Actions
Schools: Education Week

Reopening & Closing Status:

Construction Limits:
Resident Resources
The United Way is assisting residents in Minnesota with COVID-19 housing assistance program. Those needing support can call 211 or toll free at 1-800-543-7709.  

Fannie Mae put together a “Here to Help Renters” resource guide. It includes tips for talking to your landlord, top things to know, and options for those in need of financial assistance. Other resources are linked to HUD, CARES Act, and state and local resources.
IRS Information on COVID-19 Checks
Information on filing for unemployment
Freddie Mac offers a Renter Helpline, which provides counseling for renters on budgeting, credit improvement and debt management. The attached flyer is available in multiple languages.

HUD has put together a guide and FAQ for Renters during the pandemic.
In an attempt to share what we know and are doing during this crisis, we are publishing a set of periodic updates for our partners and friends in affordable housing. We likely will do this twice a week or as interesting events dictate. Please let us know if you would like to be removed from this list.

Thank you,
Paul Sween & Mark Moorhouse