The multifamily industry and the renters it serves face a “triple threat” of high unemployment, a shortage of housing supply, and the coronavirus pandemic, according to Moe Vela, CEO of consulting firm The Vela Group and former Director of Administration for Vice President Joe Biden.
On the second day of the CPE-MHN 2020 Summit Series, the multifamily expert and longtime Washington insider cited findings that nearly seven million American households could face eviction without additional federal assistance beyond the relief provided by the CARES Act, and that nearly 22 million people reported having little or no confidence in their ability to pay next month’s rent.
READ ALSO: Moe Vela Talks Affordable Housing
According to a survey during Vela’s opening keynote address, the overwhelming majority—84 percent—of participants indicated that a stimulus package that includes rent and mortgage subsidies was important to them, with 8 percent saying it wasn’t and the remaining people unsure.
“Without some supplemental assistance, we’re looking at a serious, serious problem, not just for all of us on this call—from a multifamily owner, investor, or property manager perspective—but also for all those that would be evicted and frankly become homeless,” Vela said.
Vela noted that the direct payments, rent subsidies and eviction moratorium provided by the $2 trillion CARES Act helped keep multifamily tenants housed and allowed the industry to continue to operate with some degree of normalcy. Negotiations in Congress over the latest proposed stimulus bill were temporarily called off last month.
Vela also discussed the nation’s “dramatic lack of affordable housing,” which he believes constitutes a crisis, with 46 million people living in poverty. “There isn’t a single county in the entire United States that can fill 100 percent of its low-income population’s need for safe, affordable housing,” he said.
One in four housing markets are considered not affordable by historic standards, he noted. “As a Latino who grew up in the southern tip of Texas, in one of the top five most poverty-stricken areas of the nation, affordable housing is a very serious issue to me. It’s something that I care about very deeply,” he said.
“The truth is that we have a NIMBY problem, and we’ve got to help each other understand that affordable housing doesn’t have to mean increased crime,” he added. “It doesn’t have to mean that somehow some folks are coming into your community or neighborhood that are going to be a negative.”
Vela concluded by delving into cultural customization, a concept that he developed during his tenure as senior vice president of United Dominion Realty Trust. The premise is that multifamily owners and operators should make their properties culturally relevant and accessible to their renters, from bilingual staff and leases to details like paint color selection.
He gave the example of a property with a mainly Hispanic renter population. “Latinos will predominantly not live in apartment complexes that are painted red or bright yellow,” his research found. “Make it very clear you’re culturally aware.”