In the past, our nation has responded to natural disasters—earthquakes, hurricanes, and floods—by rebuilding damaged properties to higher standards that make them more resilient to the next big event. As we look for ways to respond to the health and economic devastation wrought by the COVID-19 pandemic, we must take a similar approach that rebuilds and strengthens the resilience of our people so that when the next global crisis occurs, everyone will have shelter from the storm.
Nowhere is this need for resilience more urgent than in our population of low- and moderate-income renter households who comprise the workforce that our economy has relied on throughout this pandemic. These are the people who make and serve our food. They care for us when we are sick and when we grow old. They clean our buildings. They put out fires and protect our communities. They help us raise and teach our children. Most cannot work from home, and if they have not yet been laid off, they go to work each day and keep America open.
These renter households are also disproportionally people of color who have been historically disenfranchised by systemic racism and exclusionary policies that have limited economic mobility. They are less likely to have access to critical services such as preventive health care, after-school programs, or high-speed internet access and are more likely to be paying inordinate amounts of their monthly income toward rent. In fact, prior to the COVID-19 pandemic, nearly 11 million of our lowest-income renter households were severely housing cost burdened and paid more than half of their monthly income on housing costs, leaving little room to cover other basic living needs and no room for unexpected contingencies. From an economic resiliency perspective, when the pandemic hit our shores, these households were living in a house of cards.
Home is the foundation of a resilient family, and the key to strengthening that resiliency is to ensure that everyone’s home is a foundation for health, stability, and the creation of more disposable income. In a post-COVID-19 world, policy makers, investors, and community advocates will be looking to the multifamily industry for leadership on this issue. By adhering to the following key principles and bolstering the social impact of their portfolios, multifamily property owners can strengthen the health and economic resiliency of their residents and put us all in a better position to respond and recover from the next unexpected crisis.
1. Affordability: Reducing housing cost burdens remains the most important lever in building resiliency for low- and moderate-income renters. When a person pays less than 30% of their income on rent, they have more of their paychecks left over to buy groceries and clothes, and to save for a rainy day. Simply put, renter resiliency begins with a home you can afford.
Because the cost to build and maintain a rental property continues to outpace renter income, it is nearly impossible to ensure affordable housing without some form of assistance at the local, state, or federal level. However, there are actions that property owners can take to create more housing stability for their residents. These include accepting tenant-based Section 8 housing choice vouchers in more properties across their portfolio and increasing investments in project-based Section 8 and low-income housing tax credit (LIHTC) properties. In addition, property owners should strategically seek out new partnership opportunities with public housing authorities via the Department of Housing and Urban Development’s Rental Assistance Demonstration program and partner with state and city officials on local affordable housing initiatives that require set-asides for more affordable rental units in exchange for property tax abatements, density bonuses, streamlined approvals, or other regulatory relief.
Property owners may also consider other innovative ways in which to reduce rent burdens for their residents by waiving transaction fees that make it easier to pay rent electronically and exploring voluntary rent restriction initiatives with their capital providers.
2. Healthy Design: The manner in which a building is designed can have a significant impact on resident health and well-being. This is especially true today when everything that we once took for granted—stairway railings, elevator buttons, doorknobs, even the air we breathe—are now potential causes for concern. The Center for Active Design (CFAD) recently released a series of healthy design resource reports that focus on the role building design can play in creating healthier and more resilient living environments. One key area involves improving indoor air quality. According to CFAD, there is a conclusive link between higher air ventilation rates and a decrease in the spread of airborne diseases. For instance, air filtration measures, especially the use of high-efficiency particulate air (HEPA) filters, can be an effective method to reduce infectious disease transmission rates. Implementing stronger pest management strategies will also be critical in reducing the risk of surface-to-person disease transmission while mitigating the harmful effects of asthma—especially for seniors and small children.
3. Resident Services: Successfully implemented and managed, resident service programs can stabilize renter households by increasing economic mobility, reducing eviction rates, and improving health outcomes. By implementing services and programs that support the health and financial stability of households when times are good, these programs increase the likelihood that renters will be able to withstand sudden and unanticipated health and economic disasters in the future.
Having a service-enriched property allows property owners to respond quickly to changing resident needs during times of crisis as well. In the early months of the pandemic, property owners with resident service platforms were able to leverage their existing relationships with residents to better assess their health and financial needs and provide services to help. From delivering food and groceries and helping residents file for unemployment assistance to providing telehealth and high-speed internet services, these platforms have proven to be invaluable tools that can mobilize quickly to support and stabilize residents during times of greatest need.
Given the growing level of interest being shown by health care and social impact investors in the commercial real estate market and the increased levels of scrutiny by policy makers and community advocates, there has never been a better time for the multifamily industry to demonstrate it can do well by doing good. By embracing these three principles and incorporating them across their portfolios, multifamily property owners can deliver on the promise of social impact while creating safer, healthier and more affordable homes that help the most vulnerable members of our nation be more resilient to the next disaster.
After all, what is a home if it does not offer safe refuge from a storm?