Jim Armstrong, PHADA Policy Analyst
In addition to general economic uncertainties resulting from the COVID-19 pandemic, HAs face issues developing in real estate markets that may present challenges and opportunities in the medium term. These uncertainties involve potentially significant changes in commercial real estate, owner occupied residential real estate, and residential rental real estate that includes multifamily housing properties.
Uncertainties Dependent on Local Circumstances
Real estate impacts of the pandemic are closely related to circumstances faced by localities. Urbanized communities with significant levels of teleworking white collar employees may experience disruptions in office spaces while more rural communities that may be dependent on a single or a few food processing employers may experience disruptions in residential real estate resulting from declining rent payments. Communities in states that have navigated changes to unemployment benefits successfully may experience less significant short-term impacts involving rental and owner-occupied real estate while expanded eligibility and benefit levels are in effect. Communities in states that have faced challenges implementing unemployment changes may experience more significant impacts. Where COVID-19 infection rates have been high renters, owners, and buyers may be reluctant to search for alternative housing or to place housing on the market, while that may not be a significant impact where infection rates have been relatively low. Finally, impacts of the pandemic remain dynamic. Infection rates will rise in some communities and decline in others, as economic activity will resume at variable rates, teleworking employees may continue to do so in the medium and long term or they may return to commercial office spaces. To navigate an uncertain and dynamic set of market influences, residential and commercial real estate organizations, including HAs, need to monitor both large scale national and regional trends and smaller scale more local trends affecting their operations.