Summary of UNHP 2020 Affordable Housing Webinar & Replay
Attended by over 100 viewers, The UNHP 2020 Affordable Housing Webinar & Fundraiser, held on Tuesday, September 22nd, explored a range of issues raised during COVID-19 and raised over $70,000 for work towards UNHP’s mission. This blog post summarizes the well-attended webinar and the full recording of the webinar is available on UNHP’s YouTube account and in the above graphic. The webinar explored issues raised during this COVID-19 crisis - specifically the effect it has had on the housing market - and what we think needs to happen as we move forward to ensure an equitable recovery. While we were not able to gather together with friends and coworkers for our usual drink on Arthur Ave, we were together physically, we were together in spirit, purpose, and mission.
The webinar held on Enterprise Community Partner’s zoom platform. was skillfully hosted by UNHP Board Member VaNessa LaNier and four members of the UNHP staff shared presentations. Caroline Kirk started us off with research about COVID and the digital divide in the Bronx. Next, Brendan Mitchell, Asset Manager, shared the effect of the pandemic and resulting economic downturn on affordable housing from a developer’s perspective. Jacob Udell, Research and Data Coordinator presented information about the state of the NYC multifamily housing market. and Jumelia Abrahamson, Director of Programs, gave an update on how the Northwest Bronx Resource Center has adapted to continue to support our clients and shared insight as to the struggles that they are facing. We were lucky enough to be joined by Eleanor Larrier, the CEO of Bronx Community Health Network (BCHN), and Christina Hanson, Executive Director of Part of the Solution (POTS), who answered questions about how their organizations are pivoting in the era of social distancing and shared their perspectives on what is needed in the Bronx moving forward. John Garcia, UNHP Board Member, and Executive Director of Fordham Bedford Community Services closed out the event on a positive note with a call to vote and a toast.
Below is a summary of the presentation.
COVID-19 in the Bronx
Since the beginning of the pandemic, Bronx zip codes have had some of the highest case rates in the City. While it is challenging to perfectly identify why the Bronx has had higher case rates than other boroughs, crowding has likely played a role. A household is considered crowded if there are more people than there are rooms.
This map shows the percentage of crowded renter households by neighborhood for all of NYC. The larger and darker bubbles indicate higher percentages of crowded households. Notably, many of the areas with high rates of crowding also have some of the highest COVID case rates. In many of the areas served by the Northwest Bronx Resource Center like Bedford Park, Fordham, and Mount Hope nearly 20% of households are living in overcrowded conditions.
The Bronx not only has the highest case rate, it also has the highest hospitalization and death rates among the boroughs. Environmental conditions have likely intensified the impact of COVID in the Bronx. Bronx residents are at greater risk from COVID due to the well-documented air pollution in the borough - continued exposure to air pollution can lead to asthma, hypertension, heart disease, and diabetes. According to the Centers for Disease Control and Prevention, all of these conditions put individuals at a “higher risk of severe illness from COVID-19”. Poor housing quality also puts Bronx residents at greater risk. It has been shown to contribute “to the spread of infectious diseases and respiratory infections” as well as “an increased risk of chronic illness.”
COVID-19 has highlighted the digital divide in NYC as access to the internet and technology has become even more important in the era of social distancing. The Bronx has some of the highest rates of households without broadband internet access. This map from the Office of the Comptroller shows the share of households without access to broadband. The darker the area, the larger the percentage of households without access. Without broadband access, households must rely on mobile phones and wifi hotspots.
For many work and school are now fully or partially remote. Now more than ever, it is important that Bronx households have access to the internet, technology, and any technological support that they may need.
Affordable Housing in the COVID-19 Era
The vast majority of the UNHP Housing Portfolio consists of Pre and Post War buildings that were abandoned by their owners or had fallen deeply into disrepair in the 70’s and 80’s. Various NYC housing programs have been utilized in order to achieve financial stability and improve building conditions. However, the economic downturn resulting from COVID-19 poses a challenge to our buildings’ continued financial health.
We analyzed a sample of 5 of our rent-stabilized projects - 572 residential units and 18 commercial units - over a 5 month period beginning in March. Residential rent collections fell to a low of 72% in April, but have continued to increase since. Expanded unemployment benefits helped tenants cover their rent, and the easing of COVD restrictions provided a boost to commercial tenants, some of which even attempted to pay back rent. However, monthly rent collections do not tell the whole story. From an operations standpoint, the amount of back rent carried over this same time period is more troubling. Typically, the total amount of back rent due does not exceed 1x the rent roll. By the end of July, the back rent owed by tenants was up to 2x the rent roll.
The majority of rent-stabilized buildings under private ownership are not well-positioned to weather this crisis as they do not have access to reserves. Also, privately owned, rent-stabilized buildings typically have much higher debt service payments than those financed with NYC HPD and HDC. For years, high debt leverage was the key to quick and lucrative profits, but this means that drops in rent collection of as little as 20% can lead to financial problems which put these buildings at much greater risk of falling into debt and disrepair as ownership is forced to cut costs. Some private owners may have qualified for mortgage forbearance, but since these missed payments will be tacked onto the loan principal, they will likely begin evicting tenants who are behind on rent as soon as the moratorium is lifted.
The Housing Market
Rental arrears, or unpaid back rent, pose a serious threat to the multifamily rental market at large. As we have seen in our own buildings, rental arrears have increased during the pandemic. The neighborhoods we work in already had some of the highest concentrations of rent-burdened households - those that pay 30% or more of their income in rent - and some of the lowest median income levels in the city. Since the pandemic, unemployment in the Bronx has skyrocketed to nearly 25%. This means that many households already struggling to cover rent are now finding themselves increasingly rent-burdened. The Furman Center found that a single earner household making $40,000 in NYC who lost their job would have a 71% rent burden by August. While that is dire, the average income of the clients at UNHP’s Northwest Bronx Resource Center is $21,000.
The issue of rental arrears is serious in and of itself, but it is magnified by the fragility of the NYC housing market. As mentioned before, many real estate business plans are predicated upon increasing rent rolls and asset values. As the line graph below shows, building prices have risen almost non-stop since the mid-1990s. The only time within that period where prices did not increase was after the 2008 Crisis.
When the market fails to produce rising prices, we are more likely to see building distress: in the form of bankruptcies, foreclosures, building neglect, and increased displacement. UNHP tracks financial and physical distress in multifamily buildings through its database, the Building Indicator Project. When you look at the percentage of buildings in the Bronx that are likely or highly likely to be distressed over time, there is a sharp uptick following the 2008 Crisis and a resulting drop in building prices.
It’s worth mentioning also that distress in 2010 was significantly higher in the Bronx than in any other borough, which reinforces the notion that when the real estate market experiences a downturn, those at the lower end of the income spectrum - concentrated in the Bronx - bear the brunt of it.
The Northwest Bronx Resource Center
The Resource Center serves about 2,000 families every year. Many of these families were especially vulnerable to the many effects of the pandemic - new immigrants, low-income earners, and small business owners. Pre-COVID, many of these demographics were already rent-burdened and under-resourced. Coupling these problems with new feelings of isolation, job and food insecurity, and fears of eviction, many residents have felt rather hopeless. At the onset of the pandemic, the Resource Center Team quickly adapted to a remote model to help alleviate some of these stressors. We helped Bronx residents navigate the confusion around the tax filing extensions and Economic Impact Payments (otherwise known as the stimulus check). To further assist our program users, 63 Bronx residents that participated in Financial Literacy programs were able to receive $1,000 in a collaborative effort with Neighborhood Trust and Humanity Forward.
While the Resource Center has continued to fill its very important role in our community, working remotely has proven to be an extraordinary challenge given much of the people-to-people interaction the Resource Center requires. As such, the difficult decision was made to close down our tax filing services – a service provided to locals for the past 14 years. Prior to this shutdown, this service provided 900 tax filers with an average income of $21,452 a total of $1.3 million in tax refunds.
In spite of these challenges, the Resource Center has diligently carried on. Housing application assistance – our most popular service – has not skipped a beat due to the joint efforts of volunteers and staff willing to work extra hours. This is an especially crucial service when people need a safe space to work and isolate due to the quarantine. In one month, the Resource Center was able to help Bronx residents submit 1,382 applications for the various housing lotteries that opened up over the summer. Additionally, we provided several housing webinars in both and English and Spanish to further help Bronx residents navigate applications and connect them to housing opportunities.
In the final portion of the webinar, we saw an insightful discussion into different axes of the community-wide struggles in this pandemic. Eleanor Larrier, the CEO of Bronx Community Health Network (BCHN), and Christina Hanson, the Executive Director of Part of the Solution (POTS) both shared how their organizations had to adapt to our new normal and their key takeaways from the presentation. BCHN is a network of community health centers dedicated to providing a wide range of health services irrespective of economic status, background, or gender. POTS supports Bronxites’ most urgent needs with emergency food programs, case management, and day-to-day services such as clothing, showers, and medical services.
In the early parts of the pandemic, visits to the community health centers under the BCHN substantially lowered. Many critical preventative health practices were moved to a telehealth model, and the community health centers were still able to provide immunizations for children and urgent care. Though some of their outreach programs were cut or significantly reduced, BCHN was able to find some success in this new model. However, due to job and housing insecurity, payment became a large issue for these health centers. Through the COVID Cares package and help from partner centers, BCHN was sufficiently supported through these payment struggles to continue paying their staff members.
POTS experienced similar difficulties in switching to a new telephonic model. Though they were considered “essential” in the service of providing meals, they had to transition their food service model to being based on family size and meals entirely to-go. An enormous uptick in users for their services was brought on in the onset of the pandemic. POTS saw 2 million meals served this year so far, which is twice as much as the 1 million meals served in 2019. Their case management and legal services (namely eviction prevention) proved to work well in the telephone model, though the challenge of having closed courts greatly complicated this service.
When asked what tools and policies should be levied at the state and federal levels, Eleanor mentioned that we need a unified and consistent policy on COVID prevention, testing, and tracing. She also pointed to the need of an equitable approach to vaccine distribution that does not further traumatize the already hurting Black and Brown communities of the Bronx, where we have seen increasing disparities in access due to the pandemic. Christina suggested increasing support for SNAP programs is critical for those experiencing income loss or no connection to the school systems where they would typically get meals. Both Eleanor and Christina mentioned policies addressing support and access to technology in this new age is vital for families who need to go to work and children that need to go to school. Though much is left to be done, both expressed much hope in how communities have gathered together, how strong and resilient these communities really are, and stressed that the path forward for all of us is to stay informed and vote.
In closing our seminar, we had some excellent remarks from the UNHP Board Member and Executive Director of Fordham Bedford Community Services, John Garcia. In his closing statements, John reminded us of the good that is happening in the Bronx and the way that the important joint work of UNHP and neighborhood partners and Bronx residents are helping to “fight the narrative that low-income people are to blame for their circumstances and reminded us of the resilience of this community. “This virtual room that we’re in is a tribute to the people who have been fighting for the Bronx, the people of the Bronx who continue to fight for the people of the Bronx, and those who will continue fighting for the people of the Bronx.” In a world where the only given is uncertainty, John enthusiastically reminded us that there is still much to hope for. Be inspired by John's words by watching this short clip below.
UNHP has also published three COVID related blogs which look at many of the topics touched upon here in greater detail: The Struggle to Preserve Affordable Housing through COVID-19, Trends in Bronx Housing Finance through COVID-19, and Bronx Reality before COVID is Manifesting Devastating and Deadly Consequences.