While many Bostonians lost their jobs during the pandemic and/or no longer need to come into downtown Boston, this has taken a big blow out of the Boston apartment rental market.
While eviction moratoriums and billions in federal rental aid have been a safety net for tenants and landlords facing hardship, the question is what’s next for the Boston apartment rental housing industry to survive.
Greg Brown, senior vice president of government affairs for the National Apartment Association, discusses what he believes needs to be done for renters and landlords to stay afloat.
$25 billion in rental assistance was passed in December and now more rental assistance is on the table with the next stimulus package. Has the initial $25 billion been effective or is it too soon to tell? Is more needed?
Overall, running the rental assistance program through the Treasury Department will help ensure quick deployment in the future. However, there are limited funds available, and there’s a lot of red tape and confusion about implementation at the state level that are hampering rental assistance rollout.
Beyond the guardrails set by Congress, states and localities have the ultimate jurisdiction in how funds are distributed. Some states already had rental assistance programs in place from CARES Act funds, so the federal program will help to replenish those sources where money was running out. Others have had to act quickly to set up the proper channels to screen applications and distribute the funds in an efficient and timely manner.
We need more funding and a streamlined distribution process to truly address the burden renters, mom-and-pop owners and other affordable housing providers are facing.
A few key considerations to maximize the efficiency and effectiveness of the program include:
● Minimizing the amount of paperwork that a resident must submit. If the process is too complicated or requires documentation from a variety of sources, this can be a barrier to individuals who truly need the help and stall the process while more debt piles up.
● Another important piece of this is accepting applications in multiple forms (electronic, paper, etc.) because you may have older folks who have limited access to Wi-Fi, fax machine,s or printers.
● Programs that have proved most effective allow for a housing provider to seek assistance on behalf of their residents, as well as to inquire about the status of an application of a resident, helping to move the process along.
The answer is simply stated, but it’s going to take a lot of work and resources to accomplish. The number one solution we must continue to advocate for is swift, ongoing, targeted rental assistance. This issue isn’t going away anytime soon—millions of renters and mom-and-pop owners across the country are chasing a moving target as rental debt and other bills pile up.
Rental assistance ensures that residents are in a financially stable place coming out of the pandemic and that housing provider can continue to do their job and provide quality housing. In addition to more funding, we need to see a streamlined application process, guidance for states and an efficient distribution method.
There’s no way for an industry that provides such a critical service to function without income. This is a low-margin business and the ripple effects of unpaid rent not only affect the viability and quality of the housing stock, but the quality of our communities.
Only 10 cents of every rent dollar is profit—38 cents covers the mortgage; 14 cents covers property taxes which fund schools, firefighters and other emergency services; 16 cents covers operating expenses including routine maintenance; 10 cents covers payroll, supporting the industry’s 17.5 million jobs; and 12 cents covers capital expenses.
If owners don’t have the money to pay these bills, units will fall into disrepair and could ultimately go into foreclosure. This would only further deplete the already scarce affordable housing supply.