Jon's Reading List - Week of August 13, 2021
Here's what I'm reading to stay on top of what's happening.
Covid-19 Rent-Relief Program Marred by Delays, Confusion, Burdensome Paperwork (Wall Street Journal, August 11, 2021)
Since last December, Congress has appropriated a total of $46.6 billion to help tenants who were behind on their rent. As of June 30, just $3 billion had been distributed, though a senior official said the Biden administration hoped at least another $2 billion had been distributed in July...
Often, tenants and landlords didn’t know money was available, and many of those who did apply had to contend with cumbersome applications and requests for documentation.
“It’s a recipe for chaos,” said David Dworkin, president and chief executive officer of the National Housing Conference, a Washington, D.C., affordable housing advocacy group. “And that’s what we’ve got...
“I think we need to rethink our model that we’ve put together here, because I don’t think the model is working as effectively as it could,” said Bob Pinnegar, president and CEO of the National Apartment Association, a landlord trade group.
Class C Multifamily Properties Face Greatest Exposure As Moratoria Expire (GlobeSt.com, August 11, 2021)
But there’s a catch, C&W cautions: “in pursuing these new rents, landlords will likely find it more difficult to recoup rent in arrears that, with additional patience, can be obtained through state and local ERA programs,” the report notes. “In assessing the tradeoff here, landlords should pay attention to the exact implementations of ERA programs in their jurisdictions, particularly to what extent they can negotiate short-term lease extensions while still participating.”
The average rental arrears is about 2.9 months’ rent, according to Moody’s Analytics, and for a new year lease to make up for the cost of those arrears, the new rent would need to be at least 25% higher.
Multifamily Investment Reached a Record $53B in Q2 (GlobeSt.com, August 9, 2021)
Multifamily investment volume increased by 34% quarter-over-quarter in Q2 to reach $52.7 billion, according to CBRE.
This increase in apartment investment has dramatically exceeded expectations. If you subtract fourth-quarter volume—traditionally when most deals are down—second-quarter 2021 posted the highest transaction of any quarter in the last 15 years, CBRE explained.
Apartments accounted for 36.6% of commercial real estate transactions in the first half, making it the top performer. It was followed by industrial at 20.6% and office at 18.9%.
A GoFundMe topped $200,000 after a woman said she and her kids faced eviction. Then, their real mom came forward. (Washington Post, August 11, 2021)
On Monday, some 3,700 people had donated about $234,000.
But days after the CNN clip aired, a woman came forward and said that she was the girls’ mother. Kelly then revealed she is not the biological mother of the three girls who sat with her on the couch...
The Aug. 3 interview with Kelly was part of CNN’s coverage of a federal eviction moratorium that had expired days earlier on July 31. Missouri Rep. Cori Bush (D), who also appeared in the segment, repeatedly told Kelly that she was worthy of financial support. Kelly cried and appeared overwhelmed as an anchor gave her real-time updates about how much money people were donating.
With tenants who won't pay or leave, small landlords face struggles of their own (Washington Post, August 10, 2021)
Carol Kelly, a former office manager who owns six rental homes in Kansas City, said property owners recognize they offer an essential service but said they are the only ones being asked to provide it free.
“What’s the difference between me and a grocery store or a restaurant?” she said. “You would never go into a restaurant and say, ‘Please feed me for the next 12 months and I’ll give an IOU.’ But that is what people are saying to me.”
Landlord Out $24k In Back Rent Due To Eviction Moratorium, While Tenants Buying Boats (Real Estate Investing Today, August 10, 2021)
A landlord in North Carolina is frustrated that the eviction moratorium has not only cost him over $24k in unpaid rent, but he has also watched as one of his tenants bought three boats. FOX News is reporting that the landlord (who owns 35 properties) has not only been forced to maintain his properties but even had to repair an air conditioner ($4,500) at the residence of the same tenant who purchased the watercraft. And, as has been previously reported on this site, of the $46 billion made available to the Emergency Rental Assistance Program, less than $3 billion has been spent.
Home Prices Jumped Across the U.S. in Second Quarter (Wall Street Journal, August 12, 2021)
The median sales price for single-family existing homes was higher in the quarter compared with a year ago for 182 of the 183 metro areas tracked by the National Association of Realtors, the association said Thursday. In 94% of those metro areas, median prices rose by more than 10% from a year earlier.
Nationwide, the median single-family existing-home sales price rose 22.9% in the second quarter to $357,900 from a year ago, a record in data going back to 1968, NAR said.
Home Builders are Restricting Sales, Pushing Up New Home Prices (Wall Street Journal, August 10, 2021)
Home builders have sold more homes than they can build. Now they are limiting their sales in an effort to catch up, helping push home prices even higher.
Low interest rates and the search for more space to work from home helped push sales of new homes to multiyear highs in late 2020 and early 2021. But builders have been hampered by labor shortages, steep lumber prices, material backlogs and a limited supply of ready-to-build land.