The affordable and public housing industries welcomed 2021 with a renewed sense of optimism, despite the ongoing gravity of the COVID-19 pandemic. Recently, Dr. Fauci warned that the crisis remains a “very serious situation” as healthcare professionals grapple with a new, more infectious variation of the virus. On the economic front, we continue to experience relentless unemployment as employers cut payroll by 140,000 in December 2020, the first decline since the mass layoffs of last Spring.
The latest MRI Software Market Insights report, however, offers glimmers of hope. As revealed in 2020 in Review: The Impact of COVID-19 on Conventional, Affordable and Public Housing, affordable housing rent payments rose above 80% year-over-year, the highest level since June 2020. Rent paid for public housing ended the year on an even stronger note, increasing to 97% year-over-year.
The MRI Software Market Insights’ rent collection data shines a positive light on the low-income housing industry; nonetheless, affordable housing operators are bracing themselves for looming financial obstacles. Although affordable landlords are expected to do everything possible to avoid widespread evictions (given their inherent mission), growing receivables from accrued back rent will likely create cash flow problems for many owners. Last month, at the time the second coronavirus relief bill was signed into law, the National Low Income Housing Coalition issued a statement about the shortfall properties are facing, estimating $70 billion in accrued back rent.
Our industry is facing strong headwinds, but there are other hopeful signs. First, an executive order was signed on inauguration day calling for the extension of the eviction moratorium for renters who have fallen behind on rent due to reduced wages during the pandemic. The order asks the CDC to extend the federal eviction moratorium, set to expire on January 31, through at least March 31. The following day, the CDC agreed to this request. The executive order also calls on federal housing agencies to extend the foreclosure and eviction moratorium for federally backed mortgages through March. The Federal Housing Administration and Rural Development announced these extensions on January 21. In addition, the second COVID-19 relief bill includes $25 billion for rental assistance. The relief funds will be delivered to the states and eligible cities and counties as grants through the Emergency Rental Assistance Program (ERAP), which requires participating jurisdictions to provide ongoing certification of eligibility and other compliance requirements for the life of the program and beyond.
ERAP makes available $25 billion to assist households that are unable to pay rent and utilities due to the pandemic. The funds must first flow from the federal government to the cities and states requesting aid. Allocations are expected to be distributed in late January. Housing advocates are concerned that rent relief funded by this program won’t arrive quickly enough to adequately cover the growing past-due balance. It’s up to state and local agencies to distribute the funds to eligible renters or landlords who apply on behalf of the residents. The success of this program – measured by the number of households financially stabilized – will depend on speed and focused collaboration across different levels of government and all major stakeholders.
MRI’s Affordable and Public Housing group is available to help our industry efficiently manage this precious resource. Our products, Waitlistcheck and Assistance Connect, provide technology to housing authorities and other agencies so they can receive and distribute funds to residents in need. Waitlistcheck, a solution for accepting online applications, helps agencies quickly collect the required information from those who need assistance. Assistance Connect, MRI’s self-service assistance portal, allows organizations managing the wait lists to remain in communication with applicants and provide them with information on their status 24/7. MRI’s state-of-the-art and proven products, Waitlistcheck and Assistance Connect, help agencies nationwide remotely and safely exchange information, including compliance data, with applicants of ERAP assistance and allows the stakeholders to facilitate the efficient flow of the funds. MRI’s tools are essentially helping the industry address immediate concerns, responding to the growing revenue shortfall and stabilizing housing for families in need.
Additional rental assistance policies notwithstanding, the most severe issues plaguing our industry require an end to the pandemic and a start to the economic recovery. At the current pace, it could be until the fall or winter before we’ve turned the corner. Until then, all major stakeholders must employ consistent dedication and ingenuity – including making the most efficient use of the available resources – that helped us thrive during 2020. MRI is proud to continue providing the right tools in 2021 to help the affordable and public housing industries capitalize on the early glimmers of hope.