Update: The Impact of COVID-19
#27 — July 22, 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 - 53 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%. In the first few weeks, through ALL IN for hiring talent, we have provided 53 employees with new jobs! Please watch for additional information on this initiative to add new talent to the Dominium team.
Rent Collections—THE JULY SLOW DOWN
Payments of July rent continue to trend below the previous 3 months tracked in these updates. Additionally, use of payment plans is significantly lower. We are definitely starting to see the effects of uncertainty around the extension of unemployment insurance payments.
Through July 21, 2020 we have collected 90% of charges for the month.

  • Cumulative receipts are down (3%) compared to June through the 21st.
  • Cumulative receipts are down (3%) compared to July 21st, 2019.

In terms of types of properties or receipts:

  • Resident receipts are at 87%, which is down (3%) compared to June through the 21st and also down (3%) compared to July 21st, 2019.
  • Subsidy receipts are at 98%, which is down (4%) compared to June through the 21st and up 3% compared to July 21st, 2019.
  • Senior total receipts are 97%, which is up 1% compared to June through the 21st and up 1% compared to July 21st, 2019.
  • Family total receipts are 88%, which is down (4%) compared to June through the 21st and down (2%) compared to July 21st, 2019.
The chart below shows the distribution of properties on their collection performance in July through the 21st. Out of the 210 properties, 17 have collected less than 63% of July charges representing $0.2M remaining to collect while 40 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.

NMHC hosted a COVID-19 Resource Webinar titled, “ A Conversation About Rent Payment Data and Trends Across Different Segments ” last week. This webinar explored market insights with current trends in rent payment with a conversation with Antonio Marquez at Comunidad Realty Partners, and Ryan Coon from Avail. Additional webinars are available from NMHC related FHFA mortgage forbearance extension, opportunity zones, market conditions, assistance programs, and more. 
Housing & Employment News
Due to the pandemic, nearly 20 to 28 million people could be evicted from their homes , which is over 10 million more than the 2008 housing crisis. Moratoriums are currently in place, but some states have processed the evictions already and once lifted families will be evicted. Some 29 states do not have state level eviction moratoriums further compounding the issue.

As more employees are laid off during the pandemic, local unemployment offices have not been able to serve all those in need of assistance . Some who have applied for unemployment since April have yet to receive benefits. Only 57% of unemployment claims were paid nationally through the end of May, or 18.8 million of 32 million claims. The Washington Post interviews several people around the country struggling to receive payments from the unemployment office.

Forbes reports that the outlook for rental housing is bright, but there may be some underlying issues. Even with eviction moratoriums and rent forbearance, occupancy is high with landlords waiving late fees, setting up payment plans and accepting credit card payments. The article explores Class A, B, and C housing as well as senior housing outlooks in the near and long term.

The New York Times examines how the pandemic has illuminated the need for a more skilled workforce . There is bipartisan support for the investment into the American workforce, especially those who may have lost their jobs during the pandemic. As automation continues to rise in the current climate, those that gain skills can “stay ahead of the automation wave.”

Reuters reports US homebuilding increased in June by 17.3% , the most in nearly four years, as the COVID-19 pandemic seems to have increased demand for suburban and rural housing, and interest rates on mortgage loans are at their lowest since 1971. The increase has been driven by single family units. However, homebuilding is still 24.3% below its February level.
Pandemic News
This week’s episode of the Osterholm Update: COVID-19 discusses the increase in cases in the US, new information about aerosol transmission, and how other countries have handled the pandemic.

The first Coronavirus vaccine was tested on 45 humans and show signs of promise . The vaccine, made by Moderna, produced neutralizing antibodies in all who received it. Large Phase 3 tests will begin at the end of July with 30,000 people, half of whom will be the control group.

Governor Walz of Minnesota extended the peacetime emergency for COVID-19 until August 12, 2020 . The order was set to expire on July 13, but was extended 30 days as the governor said, “as cases skyrocket in other states, we can’t let our guard down now.”
The New York Times Magazine featured an article titled, “ Why We’re Losing the Battle With Covid-19 ” this week focusing on the crisis in Texas illuminating what could become the “worst coronavirus response in the developed world.”

The World Health Organization has changed their position acknowledging that “the coronavirus may linger in the air in crowded indoor spaces, spreading from one person to the next.” They also affirmed that the virus may be spread by an asymptotic person, something they described as rare in the past. Aerosols may linger in the air and can cause transmission in restaurants, workplaces, places of worship and the like. Evidence suggests that aerosols can stay in the air for hours.

Bloomberg reports that 42% COVID-19 patients who require ICU care died in May , down from 60% in March, according to a systematic analysis of two dozen studies involving over 10,000 patients. The authors suggest that this could be driven by either an improvement in treatment methods or by changes in ICU admission criteria as ICU pressure reduced over time.

The New York Times put together an extensive review of how each state is handling coronavirus testing . It shows that 36 states are below their targeted number of tests. Only 11 states are meeting the testing target. The current positive test rate in the US is 8%.

ICU beds are hitting capacity yet again in the US as case counts rise across the country . Chief epidemiologist at Tampa General Hospital and chairman of internal medicine at the University of South Florida, John Sinnott, said “When hospitals… talk about surge capacity, they’re often talking about a single event… but what we’re having now is the equivalent of a bus accident a day, every day.” States are running out of ICU capacity to take in new coronavirus patients.

Black Americans are continuing to die at a higher rate to due to COVID-19 than any other Americans, with a death rate 3.5 times higher than the national average . The CDC reports that in cities with more than 100 deaths, Black Americans make up 23% of them. Bloomberg reports that “there are many theories, but no single explanation, for the racial inequalities.”

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 below shows their projection for daily infections and testing:
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
According to The Washington Post , what was thought to be a “V-shaped” economic recovery appears to be fizzling out, as major companies are continue to lay off workers or file for bankruptcy . The initial shutdowns did not stop the spread of the virus enough as cases are now beginning to surge in states that reopened quickly.

Forbes reports White House officials have been signaling that the $600 federal unemployment insurance checks may be slashed to $400 or less . The unemployment insurance checks are set to expire at the end of July, and there is debate between those who say the benefits have been critical to supporting the US economy, and those who say they represent a disincentive to work.

The Washington Post reports retailers filing for bankruptcy, how our coffee and eating habits have changed during quarantine , and that the US airline industry has lost over 20,000 full time jobs since the beginning of the pandemic. This article provides a glimpse of what is likely a much broader issue for all industries.

SunTrust sent their Weekly Interest Rate Commentary noting that due to cases surging around the country, states are forced to close again to control the spread of the virus. Also, the US and China Phase 2 deal has been put on hold.

The National Association of Home Builders reported on lumber prices hitting a 2-year high with prices reaching $523 per 1,000 board feet last week . This price has also risen 50% from April 2020. Factors contributing to this increase are more DIY projects due to the pandemic, a better than anticipated housing market, and tariffs of more than 20% on Canadian lumber.

The New York Times also reports that the economic recovery once thought to be on the horizon is severely threatened by renewed lockdowns caused by the resurgence of the virus in many states. Jobs numbers were improving in May and June providing clear signs of recovery, however, as the virus continues to spread recently reopened businesses may be forced to close again more economic strife. Banks are also preparing to not collect on upcoming mortgage payments.

The Washington Post reports that the US budget Deficit in June was $864 Billion , exceeding previous records. For comparison, in June of 2019, the deficit was $8 Billion. The deficit over the first nine months of the fiscal year has been $2.7 trillion. The increase was largely due to pandemic relief spending. Debate continues among policy experts about the necessity of further deficit spending, as the massive amount relief spending is seen by some as keeping the economy from falling into a much worse recession than it already has.

US banks JP Morgan, Citigroup, and Wells Fargo have set aside a collective $28 billion last quarter to prepare for the deluge of expected loan losses, citing worsening projections about the trajectory of the economic recovery.

Former Fed Chairs Janet Yellen and Ben Bernanke testified to the House Select Subcommittee on the Coronavirus Crisis on COVID-19 and the economic response. They stressed the importance and effectiveness of the fiscal stimulus in response to the crisis, and the “catastrophe” that would occur if it wasn’t continued. They also said it was a possibility that Fed will start capping yields on Treasury Securities.
Other Interesting & Helpful Resources

Professional tennis tours are trying to salvage a season set to begin in August with the ATP Tour and the WTA, with the men playing in Washington DC and the women playing in Palermo, Italy. Travel restrictions to the European Union are still in place barring travelers from the US and Russia, and it is unclear if these restrictions will apply to athletes.
State-by-State Actions
Schools:  Education Week

Reopening & Closing Status:

Construction Limits:
Several US sports leagues that are preparing to resume play are seeing a high rate of positive coronavirus tests among their athletes. The NHL saw 23 players test positive and MLB had 58 positive cases. Whereas 25 players in the NBA tested positive between June 23 rd and 29 th. MLS had two teams withdraw from their tournament in Orlando because 19 players tested positive, 10 from FC Dallas and 9 from Nashville SC.

Bloomberg has put together a guide of some of the best entertainment available to be experienced at home. The list includes TV shows, books, events, and video games for the socially distant to enjoy.
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