Update: The Impact of COVID-19
#23 — June 17, 2020
Dominium has been focused on our business and operations during this pandemic crisis. As we move past the critical rent collection part of each month, we will focus our updates on 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 as well and will send other information our way as well. A collection of all previous updates can be found at  COVID-19 Impact Update .
Rent Collections
Dominium Rent Collection Report: Through June 14, 2020 we have collected 90% of charges for the month.

  • Cumulative receipts are up 1% compared to May through the 14th.
  • Cumulative receipts are up 2% compared to July 14th, 2019, the most recent month with the 1st falling on a Monday.

In terms of types of properties or receipts:

  • Resident receipts are at 89%, which is up 2% compared to May through the 14th and up 1% compared to July 14, 2019.
  • Subsidy receipts are at 94%, which is down (1%) compared to May through the 14th and up 3% compared to July 14, 2019.
  • Senior total receipts are 96%, which is up 1% compared to May through the 14th and up 3% compared to July 14, 2019.
  • Family total receipts are 87%, which is up 2% compared to May through the 14th and up 1% compared to July 14, 2019.
The chart below shows the distribution of properties on their collection performance in June through the 14th. Out of the 210 properties, 19 have collected less than 72% of June charges representing $0.2M remaining to collect while 80 properties have collected over 97% representing $0.5M 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.

Assessment of Bad Debt in Rental Housing During COVID-19 Pandemic
With the unknowns of the new environment presented by the pandemic and resulting changes to operations of rental housing, Dominium has revisited financial reporting practices, especially as it relates to tracking of bad debt due to non-payment of rent. Given the existence of eviction moratoria in many jurisdictions, we identified a need to adjust bad debt recognition in our financial statements. What was once a 2 month process between non-payment and moveout is now a much longer and undefined time frame. We have now implemented a bad debt accrual to account for residents that will likely move out for non-payment in coming months. Our bad debt expense rate averaged 1.7% in January through March 2020 leading up to the pandemic, we are now anticipating 3.5% bad debt in this new environment and have reflected in our financial statements accordingly. We believe this change more appropriately reflects the impact of bad debt in our financial statements.
Housing & Employment News
Workers laid-off due to COVID-19 are finding part time work and side hustles to make ends meet. This data isn’t reported by the US Labor Department, but by private surveys. TD Ameritrade’s survey reported that 64% of Americans over the age of 24 who lost a job “have landed, or plan to seek, a side hustle.” This article chronicles a few people who were laid off due to COVID-19 and how they shifted into other work.

Employment Benefit News comments on how COVID-19 and the racial justice protests are offering an opportunity to change how companies hire. They interview Tom Gimbel, founder and CEO of LaSalle Network, a recruiting and staffing company, who offers insights about how companies can change how they recruit applicants and hire employees. 

Prior to COVID-19, the unemployment rate for African Americans was at a record low. The Wall Street Journal explains that the pandemic obliterated this unemployment rate and may result in a slower recovery. Recessions and the subsequent recoveries have historically moved slower for black communities than white communities. COVID-19 disproportionately affects the black communities due to longstanding health inequities, and this compounded by the unrest due to the killing of George Floyd, has left some communities without even the most essential services (grocery stores, pharmacies, etc.).

National Association of Home Builders Chief Economist, Robert Dietz, provided an economic outlook via call on June 9th [ notes]. He noted that they anticipate “negative rent growth in 2020, more decline or flat in 2021, then back to 2020 levels by 2022, then bullish thereafter.” Collection rates for Class A properties is 94%, but August collections will be the true test.

Metrostudy released slides of their COVID-19 Update: The Housing Market – June 3rd that examined home sales, consumer spending, working from home, among other statistics. May was a good month as the percent of contracts increased in every region.

Enquire shares its data about the effects of COVID-19 pandemic on the sales and market of 2,200 senior living communities. They note that in-person tours were delayed, opting for virtual tours, and move-ins have been delayed. Some statistics include higher inquiries to senior properties in May from April, May moveouts are 38% since last year, and move-in averages increased 10% over prior year. The full report is updated monthly.

Last week, Dominium’s Jen Brewerton was a panelist on the NCSHA Housing Credit Connect 2020 virtual conference. A poll of attendees asked to what extent each company had increased rent since the HUD rent limits were released. Attendees said that 6% of their properties have already implemented rent increases, whereas, fifty-two percent said that only a few of their properties had implemented rent increases. Only 2% said that none of their properties had increased rents.
Economic News
The New York Times reports that a coding error in employment status has resulted in the unemployment rate being underestimated by the Bureau of Labor Statistics for the entire pandemic. According to the article, the “real” unemployment rate for May would be about 16.4% instead of 13.3% However, even after correcting for the error, the unemployment rate was lower in May than in April.

SunTrust distributed their Weekly Interest Rate Commentary. They note that the unemployment rate fell for the first time since the beginning of the pandemic due to states reopening and lifting shutdowns.

Congress passed the Paycheck Protection Program Flexibility Act of 2020 that updates the PPP loan forgiveness requirements. The US Small Business Administration is planning to release guidance, a modified borrower application and a modified loan forgiveness application that includes these updates. These updates will help businesses keep their employees on the payroll while providing other benefits.

US oil companies are beginning to increase oil production in a few of the country’s richest oil fields, including the Permian Basin, following the crash in oil prices caused by the pandemic. As demand for oil increases the price past $60, more oil fields will continue to see increased investment.
Pandemic News
Three coronavirus vaccines will be funded and tested by the US government, according to Dr. Anthony Fauci. The first Phase 3 trial will begin in July with Moderna, followed by Oxford/AstraZeneca in August, and Johnson & Johnson in September. Dr. Fauci said that by early 2021, the US should have 200 million doses.

Former head of the CDC Tom Frieden cautions against “ amateur epidemiology,” and explains how figures such as the number of tests, number of confirmed cases and the reproductive number are of little real utility. He also cautions against using models to predict future figures like cases or deaths, saying they should be used instead to try and determine what interventions can be best used to prevent cases and deaths. He also recommends alternative things to focus on, such as how effective contact tracing is, the number of health worker infections, and excess mortality.

Data from a variety of studies from all over the world suggest that approximately 40% of people infected with SARS-CoV-2 are asymptomatic. However, they may still be contagious, and can still develop abnormalities in their lungs, the long-term implications of which are still unknown. Researchers suggest that people continue to act as if they are infected, because a lack of symptoms is not a good indicator of whether a person has the virus.

National Guardsmen and women are testing positive for COVID-19 following 2 weeks of protesting and civil unrest around the country, as the total national cases of COVID-19 surpasses 2 million. The National Guard wants all troops that were deployed to be tested within the next 14 days. Dr. Birx said that 70 testing sites were destroyed across the US, which will hinder early testing. Case counts are still rising in 21 states.

The highest 7-day average has been recorded in 14 states and Puerto Rico. Most of the cases are occurring in cities of 60,000 or less residents, with prisons and meatpacking plants as hotbeds of infection. CIDRAP also reported about the outbreak on the USS Theodore Roosevelt and the study of symptoms and antibodies of those infected. Three hundred eighty two service members were tested and showed that 62% either had or currently have COVID, 81.5% reported one or more symptoms, 18.5% were asymptomatic, and only 2 (0.8%) were hospitalized.

The CDC’s tracker of confirmed cases of and deaths from COVID-19 across the US provides the most up to date information on the spread of the virus.
IHME’s COVID-19 Projections page shows trends and projections of deaths and hospital resource usage. The graph on the right shows their projection for daily infections and testing:
Other Interesting & Helpful Resources
American Airlines is adding more flights in July and will start to reopen their frequent-flyer lounges. Operating with 55% of the flights as the same time last year, its move to slowly reopen lounges and add flights are hopeful signs of recovery to the airline industry that was devastated by the pandemic. Additional requests for leisure travel are adding flights to Florida, North Carolina, South Carolina, Colorado, Montana, Utah, and Wyoming.

Major League Soccer is planning to return July 8th in Orlando. The ESPN Wide World of Sports Complex at Walt Disney World will host all 26 teams in the MLS is Back Tournament from July 8 through August 11. Three matches will be held per day. Following the tournament, MLS teams plan to return to their home markets to continue the season.

Founder and CEO of Reddit, Alexis Ohanian, stepped down from the board of directors on June 5th. Wanting his seat to got to a black board member, he said, "I believe resignation can actually be an act of leadership from people in power right now." Reddit named Michael Siebel, Y Combinator CEO, to the board this week.

State-by-State Actions
Schools:  Education Week

Reopening Status:

Construction Limits:
Resident Resources

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.
IRS Information on COVID-19 Checks 
Information on filing for unemployment
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