Urban Cores to Survive, Says Bibby at CPE-MHN Summit
- Nov 06, 2020
Despite the pandemic and the economic recession, National Multifamily Housing Council President Doug Bibby is optimistic about the future of apartment living.
“The Millennials and Gen-Zers don’t need to own everything,” said Bibby. “My generation had to own everything. Renting is the new normal.”
Bibby was speaking at the CPE-MHN Summit, during which he was awarded a Lifetime Achievement Award. Editorial Director Suzann Silverman noted how Bibby, who spent 16 years at Fannie Mae before joining NMHC almost 20 years ago, delayed his retirement to continue his advocacy as the industry faced a crisis.
Bibby is also confident that, while Millennials’ migration to the suburbs is a genuine trend, cities and high-rise properties will survive and thrive.
“Urban areas have been the job centers that have powered the economy for the better part of the last two decades, and they will continue to do so,” he said. “The reality is people, especially young professionals, will want to live in an area where they can easily commute to work and enjoy everything that vibrant cities offer them.”
Trouble on the Horizon
Bibby does, however, have a number of near-term concerns for the apartment industry.
NHMC’s rent tracker for October shows nearly 80 percent of residents in professionally managed properties paid full or partial rent, but the Census Bureau’s Household Pulse Survey data shows family’s are struggling.
Renters have accrued “10s of billions of dollars” of unpaid rent during the eviction moratoriums, he said, and small and mid-sized multi-family owners are starting to feel squeezed by declining rents and less overall income.
“We could have some real problems with that amount of unpaid rent,” said Bibby. “I hate to see that happen, and that’s why we’re pushing so hard with policymakers to get them to do another package.”
Then there is the potential for a new Federal administration and a new GSE regulator, who could reduce the 2021 caps for Fannie Mae and Freddie Mac. “It’s the unpaid rent hovering on the horizon and making sure that we have a vibrant secondary capital market to really help buyers and investors,” he said.
Another worry is, with fewer starts and deliveries this year, housing availability and affordability have suffered. “I worry that we’re falling farther behind and we’re digging the hole deeper right now,” said Bibby.
NMHC is part of the coalition that will push the 117th Congress to enact its housing “blueprint,” which includes doubling the funding for LIHTC, reforming the Section 8 program and doubling its size, and other measures.
Rental Industry Resilience
There are, however, bright spots that have shone through the current public health and economic crises, Bibby noted.
Those include the industry embracing technology for virtual, tours, virtual leasing and managing the onslaught of packages as residents avoid in-person shopping. Bibby foresees further technological advances in the form of AI and touchless fixtures.
The NMHC president is also impressed by how real estate companies invested in PPE and how property managers stepped up to provide residents an unprecedented level of service.
“I think everyone is really, really coping well,” Bibby said. “After the health-care workers, the frontline medical workers, who are the real heroes, I would say the frontline people in our industry, the managers, are the second most heroic in terms of what they’ve had to go through.”