Update: The Impact of COVID-19
#30 — September 1, 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—August finishes just below May & June 2020
The graph includes resident receipts at 93.4% of charges for August.
Resident Receipts: We've collected 93% of resident charges.
  • up $0.8M or 2% compared to July through the 31st.
  • up $0.4M or down (1%) compared to June through the 30th.
  • up $0.8M or down (1%) compared to May average through the 31st.
  • up $0.7M or down (2%) compared to February through the 29th.

Subsidy Receipts: We’ve collected 100% of subsidy charges.
  • up $0.1M or 1% compared to July through the 31st.
  • up $0.2M or 2% compared to June through the 30th.
  • up $0.3M or 3% compared to May average through the 31st.
  • up $0.9M or 7% compared to February through the 29th.

Total Receipts: We’ve collected 95% of August monthly charges.
  • up $0.9M or flat compared to July through the 31st.
  • up $0.6M or flat compared to June through the 30th.
  • up $1M or flat compared to May average through the 31st.
  • up $1.5M or flat compared to February through the 29th.

Senior Receipts: 100% collected
  • up 2% compared to July
  • up 3% compared to June
  • up 3% compared to May
  • up 2% compared to February

Family Receipts: 94% collected
  • up 2% compared to July
  • down (1%) compared to June
  • flat compared to May
  • flat compared to February
Rent Collections—September early collections slower than August but on par for a Tuesday start
September is compared to October 2019 the most recent month to start on a Tuesday.

Graph includes resident receipts at 7.5% of charges for September prior to the start of the month. 
  • Up 0.9% compared to October early receipts
  • Down (1.7%) compared to June early receipts
  • Down (0.3%) compared to July early receipts
  • Down (1.5%) compared to August early receipts

Previous Dominium Rent Reports can be found here.

Bloomberg reports that nearly one in three American renters are expected to miss paying August rent. As the moratorium on evictions and the additional $600 a week unemployment benefits expired at the end of July, many renters who already couldn’t pay July rent are left struggling to determine how they will pay for August. The federal moratorium protected some 12 to 20 million households from eviction, but the uncertainty of the future is causing anxiety among one third of those surveyed by the Census Bureau in July.
Housing &
Employment News
Costar notes that many in the housing industry have been surprised by how high collections have been during the pandemic. Factors include benefits paid out by cities and states aimed at rent relief, the household saving rate skyrocketing during the pandemic from 8.3% to 33%, and people consolidating their homes with family or roommates, leading to higher vacancies but lower rent delinquency.

Freddie Mac Multifamily released their Capital Markets Update, including their Multifamily Midyear Outlook, which highlights the changes in the economy generally and in multifamily specifically in Q1 and Q2 2020. One of the things highlighted in the report are how smaller metros on the interior of the US outperform larger coastal metros in terms of rents and vacancies.

Bloomberg reports that an estimated 30-40 million Americans are at risk of eviction, as negotiations over emergency rental assistance and further eviction bans stall in the US congress. The article argues that even with eviction bans in place, rental assistance is needed to prevent smaller landlords from being foreclosed on.

The New York Times reports that money that will be spent on halting evictions could also have the added benefit of helping stop crime. The Council on Criminal Justice found that in 27 cities, homicides and aggravated assaults are up more than 30% since March. Research reflects that grants and aid helping families manage financial emergencies help reduce violent crime.

Despite high unemployment and higher wages, restaurants are unable to fill open positions. The health and safety risks are proving too great to risk taking the jobs, especially for those living with older generation family members. By mid-July only about 3 million of the 6.1 million food service jobs lost due to the pandemic had returned. Especially in chain fast food restaurants that often hires teenagers, many are not applying for these jobs at the urging of their parents.

Economic News
Yahoo Finance reports that another 1 million Americans filed for first time unemployment insurance benefits last week, in the second straight week where new claims topped 1 million. Most states saw a decrease in claims, with California showing the greatest increase and Florida the greatest decrease. The 1 million new claims mark is below the peak set in March of 6.8 million claims, but far above the pre-pandemic high of 665,000, set in March 2009.

Former Fed Chair Janet Yellen argued for increased pandemic relief spending by the federal government, because “a self-sustaining recovery [without government relief spending] cannot occur unless the virus is controlled.” She pointed to the success of the previous stimulus in creating recovery and highlighted that 12% of American households haven’t had enough food at times in the past week. Additionally, she said that the Federal Reserve cannot create a recovery on its own through monetary policy.

Cushman & Wakefield put out a digest of their chief economist’s take on the pandemic and its impact. Key points included that this recession is the most severe global recession since WWII, with the US, Eurozone, and Asia-Pacific Economies all estimated to have shrunk by 30-40%. Q2 is expected to be the trough, with growth occurring in many sectors starting in May, but growth will continue to be subpar until the pandemic is fully under control.

Consumer confidence in the US is the lowest it has been since the beginning of the pandemic. According to Bloomberg economist, “Consumer confidence, as measured by the Conference Board, unexpectedly declined in August as Americans faced growing uncertainty about jobs and income prospects… The responses in the report partially capture the slow, unclear process of extending jobless support and other aid.”

COVID, heatwaves, and wildfires are affecting the workers that keep food on American tables. Workers are picking corn before dawn to avoid the hottest part of the day. High rates of asthma and chronic obstructive pulmonary disease are common, among numerous other respiratory ailments.

American Airlines will plan to cut 19,000 employees on October 1st as federal payroll aid expires, which will result in a 30% reduction in their total workforce since the beginning of the pandemic. By October 1st, American Airlines will have cut a total of 40,000 employees since March. 
Pandemic News
The August 27th episode of the Osterholm Update: COVID-19 discusses the impacts of large gatherings like Sturgis and the return to college campuses can have on case numbers, as well as the first reinfection of COVID-19.

Hurricane evacuations could cause a rise and spread of COVID-19. Depending on how emergency planning is conducted in each region, cases could spike by 61,000 if policies like the evacuation of Hurricane Irma is followed, according to a new study conducted by Columbia University and the Union of Concerned Scientists. Whereas, if evacuees are sent to lower transmission rate counties, the rise in cases would only be 6,400.

Hurricane Laura was less catastrophic than initially anticipated, however it still sent more than 10,000 people to seek shelter this past week in Texas and Louisiana. Instead of seeking shelter in large shelters and arenas to reduce the spread of coronavirus, many sought shelter in hotels and college dormitories. First responders are wearing masks and following the health guidance to protect themselves and those they are serving during this time.

Men are more affected by the coronavirus than women and a new study examines the immune response of both sexes concluding that men produce a weaker immune response than women to the virus. Especially men over the age of 60, seem to be particularly susceptible. An immunologist from the Heinrich Pette Institute suggests that these findings should be included in vaccine development, as for example a young healthy woman may only need one shot versus maybe three shots for an older man.

The first documented reinfection of the coronavirus occurred in Hong Kong recently. Four months after his first infection, a 33-year-old man was reinfected, but showed no symptoms the second time. Akiko Iwasaki, an immunologist at Yale University said, “his immune response prevented the disease from getting worse... It’s kind of a textbook example of how immunity should work.”

The discovery of coronavirus in a vacant apartment in China suggests that the airborne pathogen could travel through drain pipes. The discovery comes as the vacant apartment was above an apartment of five infected people. Toilet flushes may be to blame for the spread of the virus in bathrooms, and as the soiled water travels through piping, it could spread through faulty wastewater systems like a SARS outbreak in 2003 in Hong Kong.

Four Starbucks baristas were spared from contracting COVID-19 when an infected patron visited their store in early August. Twenty-seven people have tested positive form this one encounter at Starbucks, clearly articulating the vital role masks play in quelling the spread of the virus. Three dozen more cases have been linked to the Starbucks outbreak.

The US will pay $750 million for 150 million 15-minute COVID tests from Abbott Laboratories. The test are self-contained and results are given at the point of care. Details about who will have access to these tests are not yet clear.
IHME has changed their daily infections and testing to project the trajectory of infections based on easing mandates and closures and universal mask wearing.

A Federal Study by the CDC has found that measures put in place by four summer camps in Maine prevented the spread of Coronavirus among more than 1,000 campers and staff members. The measures include the use of masks, social distancing, conducting activities outdoors, and limiting the contacts of campers and staff to a set group, so the virus couldn’t spread outside those groups.

US Islands, including Hawaii, Puerto Rico, and the US Virgin Islands are becoming hot spots for COVID-19. For months, these territories had been able to avoid the virus due to their ease of sealing their boarders, but lax efforts to test and contact trace, as well as confusion over lockdown restriction or pressure to end them have led to rapid spread of the disease once it is exposed to these isolated populations.
Other Interesting & Helpful Resources
Reopening schools has proven to be dangerous to some students and schools are trying to determine the best plan for reopening this fall. Some are doing hybrid classes on campus and virtual, whereas others have determined to completely switch on online learning. Some schools and universities are allowing students and parents to determine what is the best for each student. Many students want to return to the classroom, but fear bringing the virus home to their holder parents or grandparents.

Many teachers are paying for their own personal protective equipment to reopen their classrooms to students this fall. According to federal data, teachers on average spend $500 out of pocket per school year on extra supplies for their classrooms. This year, even if each teach only spends an additional $100, the total amount spent by teachers this year could exceed $2 billion, according to Bloomberg.

Some families with dual citizenship are moving abroad to enroll their children in physical classrooms. The Washington Post follows four families as they make the decision to move around the world (New Zealand, Germany, Canada, and the UK) to countries with schools physically reopening this fall.
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