Affordable housing has outperformed other asset classes in times of economic downturn. The recession triggered by the pandemic was no different. This is good news as many experts were unsure about the stability of the affordable niche as this recession has uniquely affected the service sector. However, due to the pandemic, occupancy, rental income, and asset valuation have remained stable.
“Affordable housing is an asset class that has continued to develop despite the pandemic. Our occupancy has remained strong, property valuations remain high and we have seen minimal rental delays. " John Williams, President and CIO Avanath Capital Managementtells GlobeSt.com. “Affordable housing also tends to hold its own in times of economic prosperity and economic uncertainty. In times of economic uncertainty, demand even increases. During the pandemic, we had over 800 new leases and 2,000 lease renewals, all of which we were able to complete virtually. "
At Avanath, rental income has held up as the rent is kept below the rental load point. “Some reasons are that most of our residents, as affordable owners, don't pay more than 33% of their income for rent. On the market price side, where residents pay a much larger portion of their income for rents, these communities are much harder hit, ”says Williams.
While rental income has been stable, Avanath has continued to support tenants through the pandemic. This policy was essential in creating stability, according to the company. “Our main focus during the pandemic was on our residents. Our on-site teams really got the chance to make sure our residents are safe and have the items they need and to make sure our properties continue to function efficiently, ”says Williams. “For example, we've organized local food campaigns across our portfolio to ensure our residents have access to food and food options. We provided care packages to our seniors in our senior communities, and while the school switched to distance learning, we provided back-to-back. including packed lunches for children in our communities. "
Looking ahead, Avanath will continue to take a holistic investment approach. "We have always taken a holistic approach to investing and believe that being a steward for residents is an integral part of it," says Williams. "This strengthens our communities and it shows in the continued strong performance of our portfolio during the pandemic."