Update: The Impact of COVID-19
#39 — February 3, 2021
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: New COVID-19 Relief Has Impact
Early February collections indicate that we may be seeing some signs of new COVID-19 relief payments to residents, as collections are up slightly when compared to recent months on the 2nd. It is still early in the month, however, and January finished at 87.7% collected, which was “in the pack” for the fall collections but down considerably from May of 2020, the middle of the first wave of the pandemic, which came in at 92.6% collected.

Through February 2nd, 2021, we have collected 36.4% of resident charges. Resident receipts are: 
  • Up 3% compared to January 2021 through the 2nd.
  • Up 4% compared to December 2020 through the 2nd.
  • Up 6% compared to November 2020 through the 2nd.
  • Up 4% compared to July 2019 through the 2nd, the last month to begin on a Monday.
Subsidy: Cumulative subsidy receipts for the month are 15% collected, which is:
  • Up 2% compared to January 2021 through the 2nd.
  • Down (1%) compared to December 2020 through the 2nd.
  • Up 4% compared to November 2020 through the 2nd.
  • Down (21%) compared to July 2019.

Total Receipts: Cumulative receipts for the month are 31% collected, which is:
  • Up 3% compared to January 2021 through the 2nd.
  • Down (1%) compared to December 2020 through the 2nd.
  • Up 6% compared to November 2020 through the 2nd.
  • Down (2%) compared to July 2019 through the 2nd.

Receipts at Senior properties are 45% collected, which is:
  • Up 5% compared to January 2021 through the 2nd.
  • Flat compared to December 2020 through the 2nd.
  • Down (7%) compared to November 2020 through the 2nd
  • Up 5% compared to July 2019 through the 2nd.

Receipts at Family properties are 34% collected, which is:
  • Up 3% compared to January 2021 through the 2nd.
  • Up 4% compared to December 2020 through the 2nd.
  • Up 6% compared to November 2020 through the 2nd.
  • Up 5% compared to July 2019 through the 2nd.
The chart below shows the distribution of properties on their collection performance in February 2021 through the 1st. Out of the 199 properties, 15 have collected less than 14% of February 2021 charges representing $0.5M remaining to collect while 22 properties have collected over 50% representing $1.3M 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 News
The Biden Administration directed the CDC to extend the eviction moratorium through the end of March 2021. According to the Census Bureau, almost 20% of households were behind on December rent payments. This article also provides guidance for how to get eviction protection under the CDC Moratorium. The Biden administration’s new coronavirus stimulus package includes another $25 billion in rental assistance, following the first $25 billion allocated by Congress in December.

Freddie Mac financed 803,000 rental units in 2020, recording $82.5 billion in multifamily volume. More than 95% of those units were affordable. Debby Jenkins, executive vice president of Freddie Mac Multifamily said, “The fact that we hit a record in the midst of a pandemic shows our commitment to be a consistent force of debt financing for multifamily operators in both good times and bad… At the same time, we exceeded our mission-driven benchmarks, the vast majority of units we financed are affordable to low- and moderate-income households.”

CBRE provided insights in the 2021 affordable housing market while reflecting on a surprisingly good year in 2020. Though Q1 and Q2 of 2020 were a bit slower, CBRE ended the year with the same volume of listings as 2019. They noted rent collections remained relatively stable. Fannie, Freddie and The Fed were able to “keep rates low and [provide] strong credit support to the market.”

Commercial and Multifamily construction starts fell by 20% to $193.4 across the US in 2020 compared to 2019 according to a report by Dodge Data & Analytics. Among the top 10 metropolitan areas, only Phoenix AZ posted an increase, and in the 11th-20th range, only Denver CO and Kansas City MO posted increases for the year. Starts fell by 23% overall for the top 20 metros.

According to a United Nations report, four times as many jobs have been lost due to the coronavirus pandemic than were lost during the worst part of the ’09 financial crisis. The International Labor Organization estimated that the pandemic caused a loss of 8.8% global work hours, equally split between unprecedented job losses and reduced work hours for people who retained their jobs. The reduction accounted for a $3.7 trillion drop in income globally, which hit young people and women particularly hard. Jobs are projected to bounce back in the second half 2021, contingent on coronavirus infection rates.
Pandemic News
The Wall Street Journal has a state-by-state vaccine guide that provides each state’s website as well as a vaccine hotline. Some states’ websites allow residents to sign up for vaccine notifications, as many are distributing vaccines in phases. This guide is updated once a week.

Pfizer is delivering vaccines to the US two months sooner than planned with 200 million vaccine doses to be available by the end of May. The new vial released Monday will have 6 doses and will be the standard going forward. The company plans to produce 2 billion doses of the vaccine in 2021. Booster shots are also in development to hep combat the new strains.

The Biden Administration announced that they will order 100 million more doses of each of the Pfizer and Moderna vaccines. This purchase would increase total vaccines in the US to 600 million doses. This new supply should be available by the end of August and would be enough for 300 million people. The federal government plans to give states a 3-week forecast of upcoming vaccine shipments, which is up from the currently one-week forecast.

According to Johns Hopkins University data, the total global cases of COVID-19 surpasses 100 million. The UK became the first European country to surpass 100,000 deaths. Whereas New Zealand is likely to keep its borders closed through most of 2021.

 The January 28th episode of the Osterholm Update: COVID-19 discusses reopening schools, COVID variant updates, and the distribution of the vaccines.
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 US economy expanded at a rate of 1.0% in Q4 2020, an annualized rate of 4.0% and contracted 3.5% for full year 2020. The Q4 growth rate was largely driven by the manufacturing sector, as the services sector has yet to recover from the pandemic shock. Prospects for continued growth in Q1 2021 are seen as uncertain by economists, as recovery in the services sector is largely dependent on the ability of activity to resume.

The Federal Reserve left its overnight rate near zero and made no change to its monthly bond purchases and pledged to leave the rates and purchases static until there is a full rebound from the pandemic-triggered recession. Fed Chair Jerome Powell reiterated that full recovery is not feasible until the pandemic is under control, and sidelined workers returned to their jobs. The Fed did acknowledge improved prospects for quicker recovery stemming from vaccines.

Asian Economies led the world in resilience to the pandemic shock, as South Korea saw a 1% contraction in 2020, and many countries saw growth including China (2.3%), Vietnam (2.9%), Taiwan (1.9%), compared to contractions of 3.6% for the US and 7.4% for the Eurozone. The resilience of these countries is largely attributed to manufacturing exports fueled by western countries’ stimulus programs, and early success in containing the virus which allowed for largely normal social activity throughout the year.

The growth in demand for Durable Goods, which has been ongoing for the past 8 months, slowed to 0.2% in December, falling short of expectations. Economists note that the continued strength in non-transportation orders underlines recovery in business investment.

Bloomberg’s Recovery tracker shows the trajectory of virus spread, real economy and financial markets, and provides updates on short term economic outlook. The US economy appears to be improving, as government aid and reduced COVID-19 spread compared to the holiday season are contributing to improved mobility, restaurant bookings and spending. On the chart below, blue indicates an improvement over the prior period while red indicates a deterioration.
Other Interesting & Helpful Resources
Following months of holiday travel, this week the TSA recorded its lowest number of passengers in six months. Checkpoint numbers fell to 468,933 on January 26th, the first time since July the total number of passengers has fallen below half a million. This time last year, TSA checkpoints screened 1.6 million passengers.

Travelers arriving from outside the US will have to provide a negative test prior to reentry and will have to quarantine for at least 7 days. The new executive order took effect January 26th and is aimed to quell the spread of different COVID variants. However, how self-quarantine will be enforced has yet to be determined.
State-by-State Actions
Schools: Education Week

Reopening & Closing Status:

Construction Limits:
Saga Cruises said this week that it will require its passengers to get the vaccine (both doses) as well as wait 14 days before traveling with them. They are the first to make such a requirement. Other major cruise lines, like Norwegian, are exploring the legality of such a requirement before making any type announcement. However, they did say that crew will have to be vaccinated.

American Airlines launched a wine club this past week offering customers onboard wines at home. Flagship Cellars will mail subscribers sommelier-selected bottles from American Airlines collection for $99.99 a month. Food & Wine says that “considering how flying affects our sense of taste, it might be an interesting at-home experiment to compare what some of these vintages taste like on the ground and in the air.”
Resident Resources
National Low Income Housing Coalition put together a State and Local Rental Assistance guide for COVID-19 Emergency Rental Assistance Programs around the country.

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.

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.

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

Information on filing for unemployment

Family Housing Fund has put together resources for households impacted by COVID-19, ranging from legal help, utilities, food, unemployment insurance and more.

Housing Link has provided tips for emergency assistance in the Twin Cities with contact information by county.

National Alliance on Mental Illness Minnesota also has a list for families of financial and housing resources. You can also search for reduced cost services by zip code on their website.
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 month 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