Today’s biggest challenge is the COVID-19 pandemic, according to affordable housing leaders.

The longtime refrain in the real estate industry has been location, location, location, but now it’s COVID, COVID, COVID, said Richard Gerwitz, co-head of Citi Community Capital.

The pandemic is influencing all aspects of the business, including financing, construction, and operations.

Gerwitz was among the speakers at the State of the Industry Power Panel at the AHF Live virtual conference Monday.

As the number of COVID cases in the country soar, stamina and fatigue also become issues.

“Fatigue is starting to set in. I think the best thing we can do as leaders is try to help encourage our staffs. How do we help them to get through this when they are starting to get tired?” said Michelle Norris, executive vice president of external affairs and strategic partnerships at National Church Residences.

Here are a few takeaways from the power panel:

Construction Costs and Supply Chain Disruptions
Navigating the supply chain has been difficult for developers, especially with ordering and obtaining appliances and HVAC equipment. “We’re working with our material suppliers and storing some of that equipment in their own warehouses, so they will have it ready,” said developer John O’Donnell, CEO of The Michaels Organization, noting that this has been especially important with rehabs because the team wants to get in and out of the units as quickly as possible with less disruption to residents.

O’Donnell said he expects lumber prices to come down next spring, but that’s assuming there’s not a major wave of COVID-19 cases and factories do not shut down.

Financing Challenges
There’s been a trend in many cities to have mixed-income housing developments, with some units having less of a discount than low-income housing tax credit (LIHTC) units. There's an increased concern at financial institutions today about the units that trend closer to conventional or market-rate rents. Projects that have quite a bit of non-LIHTC housing are proving to be more difficult. Projects that have a significant amount of commercial space are also becoming more difficult to finance, according to Gerwitz.

On the positive side, the industry has seen continued low interest rates, he said. Those lower rates have helped raise more proceeds. In addition, affordable housing deals have continued to close even during the pandemic.

Good communication among developers, residents, and management companies to keep their properties stable have helped the affordable housing debt and equity markets this year and have helped their finance partners to underwrite and close investments and make loans, according to Beth Stohr, director, affordable housing equity and debt, at U.S. Bancorp Community Development Corp.

Digital Divide
The COVID-19 pandemic has emphasized the importance of closing the digital divide. National Church Residences is addressing this challenge on three fronts—infrastructure, services, and adoption, according to Norris.

First, the affordable housing developer and owner is working to make sure a building does not get built or rehabbed without making sure the infrastructure is in place, Norris said.

A second key is to work with the telecom industry to make services affordable. The third effort has been to help seniors adapt to the technology.

Relief From Washington
It remains to be seen if Congress and the administration can reach an agreement on COVID-19 relief either as a standalone bill or part of a funding negotiations that must be resolved by Dec. 11.

“The wild card is the incoming administration because it may push Sen. [Mitch] McConnell to come to an agreement with the Trump administration that is more palatable to its conference before the Biden administration takes office on Jan. 20,” said Bob Moss, principal and national director of governmental affairs at CohnReznick.

The AHF Live virtual event continues through Thursday, with daily tracks focusing on policy, finance, and development. Registration is complimentary for affordable housing owners and developers as well as government agencies. Register at www.ahflive.com.