With millions of people out of work, large numbers of workforce housing residents are unable to pay rent, casting a shadow on the forecast for these Class C and B assets. But workforce housing was well-positioned going into the pandemic, with low vacancy rates and solid rent growth, noted Paula Munger, assistant vice president of Industry Research & Analysis at the National Apartment Association.
“We are in the housing industry—not the health care field—but the downturn and recovery are completely dependent on the path of the virus.”
If the economy ratchets up over the summer, and there isn’t a second wave of the virus, in six months housing providers may be able to see a light at the end of the tunnel. “But ‘back to normal’ will be a long way off,” Munger said.
Industry watchers also agree that continued commitment by investors, lenders and government partners is critical. According to Lisa Alberghini, executive vice president of peer exchange & policy at Housing Partnership Network:
“As we emerge from the pandemic, owners and operators will be well-positioned to address the need for workforce housing if adequate support is provided now, and over the next several months, to ensure that rents can be paid, increased operating costs related to COVID-19 can be covered, and gap funding is made available to keep construction projects moving forward.”
Sector Insights rotates among market rate/luxury housing, workforce housing, low-income housing, student housing, senior housing and mixed-use.