Impacts of COVID-19 on Rental Properties in Minnesota

The Greater Minnesota Housing Fund (GMHF) released data on the depth of impact of COVID-19 on Minnesota households.

During the Covid-19 pandemic, Greater Minnesota Housing Fund (GMHF) is surveying owners and managers of approximately 30,000 rental housing units in rural and urban parts of the state monthly to determine tenant inability pay rent due to the Covid-19 pandemic. Data collected is focused primarily on providers of affordable housing, but data for all rental units in respondent portfolios was requested, including market rate units.

Findings identify changes in the inability of tenants to pay rent which will eventually lead to more evictions and homelessness, as well as growing threats to the stability of affordable housing organizations.

There have been two surveys completed to date. You can download a PDF of each survey here:

COVID-19 April 2020 Renter Survey
COVID-19 May 2020 Renter Survey

 

KEY FINDINGS

  • Rental income declined by 16% on average in April 2020 as compared with March 2020. This rate of decline represents an estimated $60M loss of rental income statewide for April.
  • The $60M rent-loss figure reported by property owners indicates the scale of government funded housing assistance needed per month for jobless renters for the duration of the COVID-19 emergency period.
  • Covid-19 has increased operational costs for rental properties due to higher need for cleaning services, sanitation, staffing; rental income has declined, threatening the stability of properties moving forward.
  • Among rent-assisted units (such as Section 8), rental income declined by 19%. Declines in rental income for rent assisted units are expected to be mostly temporary due to atypical COVID-19 related lags in processing rent assistance by federal, state, and local administrators.
  • Housing organization respondents expressed concern that adverse economic impacts will intensify in May 2020 and later in the summer as temporary income support measures expire.

 

The sample of 31,500 units represents roughly 5% of the total market of 610,000 units, of which 120,000 (20%) are affordable units. The types of units reported by survey respondents were about evenly split between assisted (55%) and non-assisted units (45%). The survey will be updated monthly and made available on the GMHF website.

 

MULTIPLE INTERVENTIONS ARE NEEDEDHousing maze by Adam Voorhes

While Minnesota renters who fall behind in rent will not be immediately evicted thanks to Governor Walz’ Executive Order (EO) banning evictions, renters are still obligated to catch up with rent obligations. Forbearance of monthly rent payments will mean subsequent rent increases when the eviction moratorium is lifted.

Inability to pay rent puts large numbers of Minnesotans at risk of eviction, and potentially, homelessness. The increased need for government housing assistance underscores the need for major new public investments to begin to re-stabilize the housing system and the economy.

“The issue of rent loss has wide impacts. Today’s tenants who cannot pay rent will be tomorrow’s homeless families and individuals, including children. More tenants desperately need government rental assistance, or they will soon be evicted and homeless. Also, owners of affordable housing cannot maintain safe properties without adequate rental income. Clearly, major new state and federal resources are needed to deliver the needed scale of rent assistance.” said Warren Hanson, President and CEO of Greater Minnesota Housing Fund. As affordable housing development organizations lack sustainable levels of income to manage and maintain properties, the sustainability and stability of affordable housing properties is threatened.

According to Warren Hanson, “The COVID-19 pandemic makes it clear that ‘housing is healthcare,’ for all of us, and that without adequate housing there will be more illness in our communities,”

Of Minnesota’s 120,000 affordable housing units, low income families living in 38,000 rental units are without any form of rental assistance. Rental income declines are clear evidence of tenant inability to pay rent. According to the Minnesota Housing Finance Agency, even before the crisis, more than 1 in 4 – or 572,133 households in Minnesota – pay more than they can afford, and sacrifice food, education or medicine in order to pay rent. For renters who are still without work and lack adequate income supports, eviction within the year is a real threat facing families throughout the state.

 

Click Here to see GMHF’s COVID-19 Resources Page 

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