Low- and moderate-income housing providers experienced, on average, an 11.8% decline in revenue and a 14.8% increase in operating expenses due to the COVID-19 pandemic, according to a new report by the National Leased Housing Association (NLHA).

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“Before the pandemic, for every dollar of rent received, 39 cents went toward the property mortgage, 27 cents went toward operating expenses, 14 cents covered property taxes, and 10 cents went toward capital expenditures, leaving 9 cents in income,” says the report. “With an 11.8% decline in rental income, housing providers now receive 88 cents in rent instead of $1. Additionally, a 14.8% increase in operational costs raises those expenses from 27 to 31 cents, while the mortgage and property tax contributions remain the same.”

The findings come from an online survey of 164 rental property owners representing just under 1 million units conducted by NLHA and ndp | analytics in August. About 88% of the respondents had at least some subsidized housing units as part of their portfolio, of which 69.8% had portfolios where most units were subsidized.

The study found that nearly 89% of the affordable housing providers saw declines in revenue because of the pandemic. “On average, revenue for these housing providers declined by 11.8%. Average declines in revenue were greatest for smaller housing providers with fewer than 1,000 units and 1,000 to 5,000 units (12.8% and 12.2%, respectively),” says the report.

About 73% of the providers reported that nonpayment is the main cause of the revenue decline at a time when many households have lost work and cannot afford to pay rent. In addition to nonpayment, nearly 49% of housing providers identified incomplete payments as a significant factor in revenue decline.

At the same time, housing providers are spending more to keep their properties and people safe during the pandemic. These additional costs were largely attributed to extra cleaning and personal protective equipment (PPE), with about 86.1% of low- and moderate-income housing providers identifying extra cleaning as a primary driver of increased expenses and 79.6% identifying PPE as such.

To offset financial losses, 56.4% of housing providers applied for and received aid from government relief programs. On average, housing providers received about $282,841 in COVID-related assistance.

The study points out that the financial strain is impacting future housing projects. About 36% of those surveyed had plans to invest in rental properties, but nearly half of those have scrapped or postponed plans.

NLHA is comprised of nearly 450 public and private-sector affordable housing providers.