A property technology firm’s new report tracking affordable housing and public housing has some mixed news for real estate investors.
July rent collection in affordable housing fell to a new low this year to just over 75%, indicating the growing challenges for affordable housing tenants amid the coronavirus pandemic. Meanwhile, public housing saw a strong rebound from its June to July rates with a 20% increase.
That is all according to MRI Software’s latest report tracking the effects of the coronavirus on affordable and public housing throughout the U.S. Brian Zrimsek, industry principal at MRI Software, said the property technology firm computed those latest findings by comparing data from over 1.5 million affordable and public housing units.
“It’s clear that tenants of affordable and public housing are more vulnerable than those in market-rate units at this point in time,” Zrimsek said. “As the pandemic-driven recession continues, the mixed results we’ve seen over the past two months further underscore the fragile situation of many affordable and public housing tenants.”
It is important to note that public housing assets serve a relatively higher income group while often relying on funding from the private sector and leverage from a variety of government subsidies, according to the MRI Software report.
Public housing assets are owned and operated by housing authorities, and usually are older and have more substantial operating costs. But recently, many public housing portfolios have been converted to affordable housing.
The MRI Software report also had other notable findings, such as tenants in both affordable and public housing are generally staying in place. Applicants, move-out certifications and new admission certifications are trending below comparable data in 2019. However, applications and move-outs are rising at market-rate units.
Additionally, work order volumes for affordable and public housing see a slight increase. While the volumes are not at 2019 levels, the increase suggested a return to normal operations, according to the data-driven analysis in the report.
Zrimsek said the property technology firm would continue tracking the trends throughout the coronavirus pandemic to help inform on society’s collective impact, response and progress.
But Zrimsek noted that due to the uncertainty around governmental assistance for displaced workers, increasing cases of the coronavirus in major metros, along with ongoing unemployment, right now the outlook appears bleak.
“The next few weeks will be telling,” Zrimsek said, “especially if there is a sustained drop in unemployment assistance.”