Update: The Impact of COVID-19
#28 — August 14, 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.
Essential Employment - 44 New Hires!

As part of our work to support residents and the economic recovery, Dominium is adding to its ALL IN campaign around the COVID-19 pandemic by pledging to increase employment by 10%. Dominium is ALL IN for hiring talent and has added 44 new employees in the last 2 weeks.
Last week, Dominium named its first class of Dominium Scholars. 80 residents and 20 employees (or their dependents) were awarded $5000 scholarships to further their education in college, vocational or certificate programs. The program—called Opportunity’s Front Door—is a new program of the Dominium Foundation and seeks to bridge the all too frequent gap between talent and opportunity.
Dominium participated in the National Apartment Association’s celebration of essential workers on August 12. Each team was treated to lunch and every site team member was awarded a $500 bonus in recognition of their dedication to residents during this challenging time. The bonus was funded in part by corporate staff members who donated parts of their annual pay or paid time off. Those donations were matched 4:1 by the senior management of the company.
Rent Collections—THE AUGUST SURPRISE
Payments of August rent reversed the trend experienced in July and payments through 9th are only slightly down from the trend in May of 2020. We had anticipated additional weakness in rent collections in August, due to the lack of continued Federal unemployment payments.
Through August 9, 2020 we have collected 85% of charges for the month.

  • Cumulative receipts are flat compared to July through the 9th
  • Cumulative receipts are down (3%) compared to May through the 9th
  • Cumulative receipts are down (1%) compared to February 9th 2020, the most recent month in which the 1st fell on a Saturday.

In terms of types of properties or receipts:

  • Resident receipts are at 85%, which is up 3% compared to July through the 9th and down (1%) compared to May through the 9th. They are down (1%) compared to February 9th.
  • Subsidy receipts are at 86%, which is down (9%) compared to July through the 9th and down (9%) compared to May through the 9th. They are down (1%) compared to February 9th.
  • Senior total receipts are 98%, which is up 3% compared to July through the 9th and up 2.5% compared to May through the 9th. They are up 3% compared to February 9th.
  • Family total receipts are 82%, which is up 3% compared to July through the 9th and down (2%) compared to May through the 9th. They are down (1%) compared to February 9th.
The chart below shows the distribution of properties on their collection performance in August through the 9th. Out of the 206 properties, 17 have collected less than 63% of August charges representing $0.3M remaining to collect while 38 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
FICC Markets Standards Board commented on the risks of working from home in FICC markets. Some of those risks include reduced employee engagement, mental stress, weakened control of confidential information, among other risks. With remote work likely continuing, FMSB has put together a risk register to help identify and mitigate these risks.

According to a Bloomberg report, low cost home production is lagging, thanks to construction slowdowns and budget cuts. Experts are concerned that this slowdown may compound the looming eviction crisis and worsen the US’ affordable housing shortage in the long run.

A new poll highlights the stark economic disparities during the pandemic by race and ethnicity, age and education. Forty-five percent of college-educated Americans have lost investments compared to 29% without a college degree, whereas only 10% of college-educated Americans delayed paying bills compared to 26% of those without a college degree. Hispanic and Black Americans are 42% and 32% respectively more likely to lose income compared to white Americans 21%. This financial strife is also leading to more stress and affecting the mental health of those affected.

Fannie Mae discusses the impacts of the pandemic on student housing especially as colleges and universities around the country are telling students not to return to campus. Off campus housing looks to be able to better survive the pandemic than the large on campus housing complexes.

According to a Census Bureau survey, twenty-two percent of American households do not think they will be able to make their next rent or mortgage payment, which could result in millions of Americans losing their homes. There is immediate need for action by Congress to help supply aid and prevent such a loss in housing.

According to Urban Institute, without extended unemployment, SNAP benefits, or a new stimulus, the US poverty rate will rise to 11.9% by the end of 2020. If Congress passes legislation to extend these three benefits, it could keep 12.2 million people out of poverty. Black and Hispanic families have been hit harder by this pandemic, and for those families that have lost at least one job, the poverty rate would hit nearly 20% by December.
Pandemic News

The New York Times has a tracker of over 165 vaccines for COVID-19 and their status in the development and testing process. Vaccine's need to go through three phases of testing: safety and dosage, expanded safety trials, and large scale efficacy tests. The article also includes information about the most promising vaccines, such as who is developing them, what phase of testing they're in, what type of vaccine it is and how it is being funded and tested.

The past three weeks of the Osterholm Update: COVID-19 discuss how we reopen schools in two parts. Part 1 discusses “the concept of superspreaders and their role in the transmission of COVID-19,” whereas Part 2 provides some guidance for reopening schools, the durability of immunity, as well as providing thoughts about cloth face coverings. The episode from July 30th continues the discussion of how to prepare for the fall school year, but also discusses updates on vaccine developments and testing challenges.

A new study suggests that face masks may reduce the number of coronavirus particles, lessening the severity of the disease. Dr. Monica Gandhi, infectious disease physician at the University of California San Francisco, and her colleagues argue in a new paper to be published in the Journal of General Internal Medicine that those wearing masks take in fewer particles, “making it easier for their immune system to bring any interlopers to heel.”

Mayo Clinic reports that non-COVID vaccines may offer some protection against the virus. Influenza to measles vaccines may reduce the risk of contracting COVID-19. The Mayo Clinic research states that the COVID-19 risk was reduced by 28% of those who had their PCV13 pneumonia vaccine in the past year, and a 43% reduced risk if they received the polio vaccine before traveling to high risk locations. As the school year looms, doctors are urging families to vaccinate their children as it is estimated that there was a 30-40% decline in childhood immunizations during the pandemic.

Dr. Osterholm discussed how the pandemic is overwhelming the US health capacity comparing it to a forest fire burning uncontrolled with NPR. Adequate testing, contract tracing and isolation are the most effective ways to contain a pandemic, and the US has failed to control surges across the country. At this point there are too many cases to be able to track them.

Reuters details how the testing industry’s structure has severely limited the availability of tests in the US. Because the COVID tests are made by only a few companies that each make their own model of tests, each relying on its own parts, production of tests at a scale to meet US demand has been made virtually impossible.

Households with multiple generations living under one roof are seeing the youngest generation, those returning to work and to school, spread COVID-19 to their parents or grandparents. Experts say that young people can often be asymptomatic, not knowing they are carrying the virus, and then bring it home with them.

Johnson & Johnson’s newest vaccine shows promise as it protected a group of monkeys from coronavirus in one shot. Human trials of their vaccine started in Belgium on July 22nd and began in the US this past week.

Bloomberg reports that visa rules for migrant workers mean that migrants have to stay in dormitories or face deportation, which has led to severe outbreaks of COVID-19 in those communities.

Experts say contact tracing has failed in many states, leading to more severe outbreaks than there otherwise would be. This has been caused by inadequate testing and delays in producing results. With the wide spread of the disease throughout the population, some see efforts at contact tracing as coming too late to be effective, while others see its effectiveness hinging on how widely available tests are.
IHME has changed their daily infections and testing to project the trajectory of infections based on easing mandates and closures and universal mask wearing.
Economic News
The pandemic has caused a sharp drop in the annual GDP, which “shrank at an annual rate of 32.9% in the second quarter” due to many restaurants and retailers closing. Nariman Behravesh, chief economist at IHS Markit, said, “our view is that we’re not going to get to pre-pandemic levels of economic activity until some time in 2022.”

The Wall Street Journal discussed the US gross domestic product’s steepest drop in more than 70 years to 32.9% annual rate in the 2nd quarter. New jobless claims this last week reach 1.43 million, and 17 million people are receiving unemployment benefits as of July 18th. JPMorgan Chase & Co tracked credit and debit card transactions showing spending increased into early June but stalled as the virus surged again.

Wall Street Journal reports that the number of people unemployed for 15 to 26 weeks rose from 1.9 million to 6.5 million in July, which is the highest it has been since the data began being tracked in 1948, and nearly twice the previous peak set in 2009. Economists say that the longer a person is unemployed, the more severe the consequences of that stretch of unemployment on their future job prospects, and so this rapid increase in long-term unemployment signals a difficult road to economic recovery.

According to a Treasury Department report, less than 25% of funds allocated by Congress to address coronavirus relief efforts have been used. CNN reports that this lack of spending is due to strict Federal rules meant to ensure funds are used for COVID related expenses.

Bloomberg reports that the US Dollar suffered it’s worth month in a decade in July, with all major currencies appreciating in value relative to the dollar. The dollar’s value fell 4.6%, contributed to by falling GDP, dropping treasury yields, and concerns surrounding President Trump’s suggestion to delay the presidential election.

Costar discusses the stimulus changing from $600 a week to $300 or less. For the first time since March, jobless claims rose to 1.4 million last week. Initially, businesses were closing temporarily due to stay at home orders, but now some of these temporary closures have become permanent.

Colliers International published their research and forecast report “Standing at the Crossroads: Office Space in the Post-COVID Era,” which explores how offices will change via occupancy, demand, capital markets, and growth due to the pandemic. However, they note that the longer the pandemic continues, the higher the likelihood that behavioral changes, like social distancing and online meetings, will become long lasting.

Bloomberg reports that small businesses located in predominately white congressional districts received more relief from the Paycheck Protection Program than those in predominantly minority congressional districts, 26.7% compared to 17.1% respectively during the first round of payments in April. Only after the approval of more funds at the end of April, did the situation begin to reverse itself. The affects of this were felt by minority business owners who had to furlough employees, or close due to lack of funds.

Fannie Mae put together resources of FAQs for investors, sellers, servicers, and other items for both Single-Family and Multifamily customers.

SunTrust sent their Weekly Interest Rate Commentary noting that jobless claims increased for the first time since March, FOMC meets this week, but rate changes are unlikely. Tensions between the US and China are increasing as each country has expelled members of their consulates.
Other Interesting & Helpful Resources
Due to travel restrictions preventing Americans from visiting Europe and many other countries, wealthy Americans are finding alternative ways to travel, including buying citizenship. There are about 25 countries that “offer forms of residency or citizenship-by investment programs,” including the UK, Portugal and Dominica.

Major League Baseball is dealing with several outbreaks of the virus among teams who just recently return to the ball field. Dr. Osterholm calls the outbreak with the Marlins a “canary in the coal mine.” Even with strict protocols, strong funding and enough personnel, baseball could not contain the virus, which puts into question how other businesses and even schools will plan to reopen. Even as baseball tries to continue, the St. Louis Cardinals reported several players tested positive postponing their game with the Brewers at Milwaukee’s home opener on July 31st. Due to positive tests, six teams will not play Friday, July 31st.
State-by-State Actions
Schools: Education Week

Reopening & Closing Status:

Construction Limits:
Although sports have returned to some degree, several athletes have chosen not to return. Many are choosing to sit out this season due to the risk of coronavirus and the potential to spread the disease to their families.

As the new school year starts in the US, early childhood classrooms are going to look very different compared to years past. Social distancing guidelines are still in place, and masks will be required for teachers and encouraged for students. Child development instructors are looking at ways to encourage physical distancing from one another, but not emotionally distancing the children. They focus on “[keeping] the adult response focused on empathy and teaching” when it comes to children who struggle to abide by the health guidelines.

Resident Resources
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