In our Q1 Affordable Housing Market Update, we looked at regulatory and industry trend updates for property management companies following the turmoil of 2020 and facing the uncertainty of 2021.
1. Post-Pandemic Process Trends
The National Affordable Housing Management Association (NAHMA) recently explored the effect COVID-19 has had on how its members manage operations. To no one’s surprise, the pandemic has affected everything from leasing procedures to maintenance and construction processes. It remains to be seen how these and other changes will best be navigated going forward.
Trends included postponed maintenance that PMCs plan to tackle in 2021, increased emphasis on diversity, equity and inclusion and green building and energy efficiency, but the most consistent operational change reported to NAHMA was an increase in technology adoption and reliance.
Out of necessity, affordable housing PMCs are moving to digital processes for leasing, recertifications, online rent payments, online training, shared documents for budgets, policies and procedures, and more. As regulations continue to evolve, even greater reliance on technology will be required to manage increased compliance complexity.
2. Eviction Moratoriums and COVID-19 Relief Plans
New legislation aimed at providing relief for residents has complicated leasing operations. In addition to longer wait lists and more defaulted payments, PMCs expect the moratorium lift to generate not only a backlog of evictions, clusters of vacancies and the challenges of multiple simultaneous turnovers, but also more complex reporting requirements. Relief legislation to watch:
COVID-19 Economic Relief Bill 12/27/20
• Eviction moratorium was extended (Separate from CARES Act Moratorium)
• $25 billion in rental assistance (HUD and tax credits) was approved
• HUD provided guidance on unemployment compensation:
○ Pandemic Unemployment Assistance Benefits – included as an annual income, projected for 52 weeks.
○ Federal Pandemic Unemployment Compensation Benefits – temporary income, not included in annual.
○ Pandemic Emergency Unemployment Benefits – included as annual income, projected for 52 weeks.
○ Currently awaiting guidance from HUD on whether stimulus checks should be included when calculating income.
President Biden’s COVID-19 Relief Plans
Information is fluid. We expect a lot of updates over the next 30-90 days, so it’s important to keep an eye on this new legislation. New relief will provide: Extended eviction moratorium for non-payment of rent. (The end date is currently set for March 2021. We are anticipating this to eventually be extended through 2021.)
• Additional $25 billion in rental assistance program
• $5 billion in emergency assistance to help people obtain stable housing
• $1400 per person in direct payments
• Extra $400 per week, and expansion of other unemployment benefits
IRS COVID Guidance
A moratorium on income recertification and compliance monitoring is set to last through September 2021.
3. E-Signature Updates
HUD released guidance that Housing Notice 2020-04, which allowed PMCs to use e-signatures and electronic storage, was replaced by the new Housing Notice 2020-10 in October 2020, with two key differences:
• Extends notice to include 811 Project Rental Assistance (PRA) contracts.
• Disallows Independent Public Auditor (IPA) access to Electronic Income Verification (EIV) reports, ensuring that EIV Rules of Behavior remain compliant. The new language requires EIV reports to be reviewed on site or at a management office. We are waiting on guidance from HUD on whether this can be done via web meetings or other methods, due to COVID.
4. New ResMan Affordable Product Updates
Now that HUD is allowing electronic storage, we have been investing heavily in the ResMan Affordable product to level up our Online Affordable Leasing feature to support the pandemic-imposed need for PMCs to move to a virtual environment.
Key features include:
• End-to-end online leasing experience
• Customized HUD online applications
• E-sign recertification with auto-generated notices to residents and digital document storage
More product updates are coming in 2021. Be on the lookout for our Q2 affordable housing market update to stay informed about quickly evolving regulations, deadlines and trends.