How missed rent payments could affect the affordable housing supply
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Christopher Wallace is still collecting this month’s rent for the hundreds of apartments his firm manages in Washington, D.C., and he isn’t optimistic.
“Since this all started in March, it’s been progressively getting a little worse,” he said.
Late or skipped payments aren’t the only problems, said Wallace, who works for Fred A. Smith Management.
“I think a lot of people, if they’re unable to pay, what they’re doing is moving out and moving either back home or moving in with other people,” he said. “We’ve seen a lot more vacancies than we normally would get this time of year.”
Most of Wallace’s buildings are known as Class C properties. They tend to be older, have fewer amenities and serve low- to moderate-income tenants. And research shows tenants in these buildings are struggling to pay the rent at much higher rates than tenants in higher-end properties.
According to the insurance company LeaseLock, by mid-July owners of Class C buildings had collected only 37% of rent, down from 54% as of mid-June.
“Those groups of people who are most affected by unemployment and layoffs — it’s the same population who are also residents of Class C apartments,” said LeaseLock’s Rochelle Bailis.
She expects the numbers will get worse this month, after Congress allowed emergency unemployment aid to expire.
When those tenants can’t pay, their landlords may have to sell or face foreclosure, said Jenny Schuetz, a fellow at the Brookings Institution. That could permanently reduce the stock of affordable housing.
Investors could swoop in, renovate and raise the rent. Or, “if the landlord isn’t collecting rent, they can’t do things like fix the plumbing and fix the roof,” she said. “Some of these buildings just may become uninhabitable.”
The need for affordable housing was already dire before this crisis, Schuetz said, and once it’s gone, it’s hard to replace.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
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Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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