April Rents - How Are You Contributing to the Solution?

At close of business on 4/6 across our workforce housing portfolio, month-over-month online collections are down 6.1%. We anticipated a drop of 10%.

We continue to emphasize that, "Everyone is Responsible for Rent." Repeating this message early and often appears to be helping. Very few have indicated they will have a problem. None are attempting to make this exclusively a management or owner issue.

Our community leaders have now-added "Life Counselor" to their job description. We are helping residents navigate government, employment and charity resources, and are creating individualized plans for each challenged resident. We remind people that doing nothing and hoping for the best is not a plan.

Our case-by-case plans may include, making up rent later, agreeing to lease extensions, demonstrating need and proving up results of job and assistance searches. Those we are helping must remain residents in good standing and are asked to help out around the community or volunteer to the extent they are able. In the end, we will hold residents accountable for doing what they commit to. For those that do their share and still need help, we are committed to helping all we can. We all have a role to play.

We appreciate that some multifamily companies have publicly committed significant sums to resident assistance programs. We know they mean well. Our owners and investors expect to do their part also, but are concerned that announcing dollar figures up front creates two issues; some may see a pot of gold as the answer to their problems, thus creating unrealistic expectations; and, while the numbers appear large, funds likely won't go that far. Pre-limiting the number of people we are willing to help is not our style. In the end, such pronouncements tend to benefit stock prices as much as anything. It's a shrewd move but won't eliminate the challenge.

To help make up for uncollectable rent, we are capturing CARES-PPP money on behalf of our third-party clients that will be used to subsidize payroll. In February, we began counseling owners to start negotiating with lenders, and we're keeping a close eye on expenses. We are preparing for income to drop by as much as 30% through June. We hope for the best but must be prepared for the worst.

How are you contributing to the solution and how is it working out?

Thanks for sharing your experiences, Michael!