Talking points for COVID-19 Advocacy & the Multifamily Industry

Advocacy Talking Points about COVID-19 from AANC

General

The outbreak of COVID-19 undoubtedly has created a national health and financial crisis. The multifamily industry currently provides homes to more than 900k North Carolinians. Our members are committed to the safety and security of their residents and communities. Since the outbreak began our industry quickly took necessary precautions to minimize the potential spread of COVID 19 in residential communities. That includes but is not limited to, sanitizing common areas, educating residents and complying with CDC recommendations. Unfortunately, the unprecedented economic effects of the COVID- 19 are unavoidable, and the financial impact does not stop at the tenant. As an industry, owners, operators, and suppliers are all feeling the same burden of the average tenant. Income reduction, property loss, and a need for resources are all common themes.

As a result, many housing providers throughout the apartment industry are taking measures to help their tenants during this unprecedented time, including offering rent deferment, developing payment plans and waiving late fees. We understand the hardships that are being faced and encourage tenants who have been financially impacted by COVID-19 to stay in active communication with property management.

What impact will COVID 19 have on the industry?

Housing providers are bracing themselves for an unprecedented reduction in rental payments. Numerically speaking, after the 5th they will have a better understanding of the overall impact COVID 19 has had on their residents. currently, our primary focus is working with residents, advocating for emergency rental assistance, and monitoring State and Federal aid packages.

Renters not Financially impacted by COVID 19

Housing providers are tirelessly working to assist residents who have experienced job loss or income reduction due to the COVID 19 outbreak. The ability of the industry to remain flexible and provide this level of support relies heavily upon nonimpacted residents making timely payments to their housing providers. Plainly put, the residents that can pay rent are indirectly helping the ones that cannot. A general rent strike would hurt the most vulnerable by limiting the property owner’s options to assist those in greatest need.

• Significant shortages could affect owners’ ability to provide essential services.
  • Rental income shortfalls would impact the ability to pay community-wide water, sewer, gas and electricity bills, and trash and recycling collection charges.
• Unpaid rent could further ripple into repair and maintenance capabilities or set-asides for major property improvements like roof replacements or updating the HVAC system.
• As rent shortfalls increase, it may lead to deferred maintenance and loss of employment for staff, lowering the quality of housing for residents
  • Smaller communities may have to cut back on employees and outsourced contract work.
• Many rental housing providers are small businesses that own a small number of properties and depend on rent to cover basic expenses and support their own families.
  • Many function on low margins that cannot sustain substantial losses of rental income for any period of time.
  • Small “mom and pop” operations (those that consider real estate as a nest egg for their retirement) are especially vulnerable: Mortgage payments, property taxes, and insurance account for most of their rental income.

Suspension of Court Activities Creating a Statewide Eviction Moratorium

The multifamily housing industry recognizes the need for decisive action and support Chief Justice Beasley’s decision to postpone eviction and foreclosure among other court proceedings congruent to Governor Coopers Executive Order No 117. However, these decisions, while in the best interest of public health, lead to considerable impacts on both renters and housing providers alike. This affects all properties and reaches far beyond the Eviction Moratorium in the Cares Act.

There is no economic incentive to evict a resident who can otherwise pay and is not disrupting the community. In fact, the eviction process creates unnecessary unreimbursed expense to the property owner. Historically, eviction moratoriums without emergency rental assistance do very little to support a tenant who is unable to recover lost wages. Rental income shortfalls would impact the ability to provide community-wide essential services and further interfere with day-to-day
operations communities rely on.

• Significant shortages could affect owners’ ability to provide essential services.
  • Rental income shortfalls would impact the ability to pay community-wide water, sewer, gas and electricity bills, and trash and recycling collection charges.
• Unpaid rent could further ripple into repair and maintenance capabilities or setasides for major and minor property improvements like roof replacements or updating the HVAC system.
• As rent shortfalls increase, it may lead to deferred maintenance and loss of employment for staff, lowering the quality of housing for residents.
  • Communities may have to reduce the number of employees and outsourced contract work.
• Many rental housing providers are small businesses that own a small number of properties and depend on rent to cover basic expenses and support their own families.
  • Many function on low margins that cannot sustain substantial losses of rental income for any period of time.
  • Small “mom and pop” operations (those that consider real estate as a nest egg for their retirement) are especially vulnerable: Mortgage payments, property taxes, and insurance account for most of their rental income.

What relief does the industry need in North Carolina?

The federal Cares Act will provide relief to many Americans adversely impacted by COVID 19. We believe that there are still measures that can be taken at the state level that will provide relief to individuals and entities in North Carolina who may not be eligible for Federal-aid but have been equally impacted by COVID 19.

1. Ensure all relief/aid measures specifically apply to individuals and businesses directly impacted my COVID 19
2. Emergency rental assistance paid directly to housing Providers- particularly for those who are presently not receiving State and Federal aid.
3. Substantial financial assistance to residents who do not presently receive Federal Housing Assistance but find themselves in need now
4. Extend local governments the authority to offer property tax relief.