Home Real Estate Affordable Housing Model Holds Through Downturn

Affordable Housing Model Holds Through Downturn

Affordable housing has historically outperformed other asset classes during economic downturns. The pandemic-fueled recession has been no different. This is welcome news as many experts were uncertain about the stability of the affordable housing niche because this recession has uniquely impacted the service sector. However, through the pandemic, occupancy, rent collections and asset valuation has all remained stable.

“Affordable housing is one asset class that has continued to perform despite the pandemic. Our occupancy has remained strong, property valuations remain high and we have experienced minimal rent deferment,” John Williams, president and CIO at Avanath Capital Management, tells GlobeSt.com. “Affordable housing also tends to perform in times of economic prosperity and in times of economic uncertainty. In fact, in times of economic uncertainty demand actually increases. Throughout the pandemic, we have had over 800 new leases and 2,000 leases renewals, which we were able to complete all virtually.”

At Avanath, rent collections have held strong because the rent is kept below the rent-burden point. “A few reasons for this are that as an affordable housing owner, most of our residents do not pay more than 33% of their income towards rent. On the market rate side where residents are paying a much larger portion of their income towards rents, these communities are being impacted much more,” says Williams.

While rent collections have been stable, Avanath has continued to support tenants through the pandemic. This policy, according to the firm, has been essential in creating stability. “Our main focus throughout the pandemic has been our residents. Our onsite teams have truly risen to the occasion to ensure our residents are safe and have the items they need while also ensuring our properties continue to run efficiently,” says Williams. “For example, throughout our portfolio, we organized local food drives to ensure our residents have access to groceries and food options, we provided our seniors at our senior communities with care packs, and while school has transitioned to remote learning, we provided back-to-school lunch packs for kids in our communities, among several other initiatives.”

Looking forward, Avanath will continue to take a holistic approach to investing. “We have always taken a holistic approach to investing and believe that being a steward for residents is a major component of that,” says Williams. “This makes our communities stronger and this is demonstrated by the continued strong performance of our portfolio throughout the pandemic.”


Please enter your comment!
Please enter your name here

Must Read

This chef got Covid, got laid off and then became a homebuilder

Joshua Copeland at the Colorado Homebuilding Academy Ryan Dumville | CNBC The coronavirus pandemic hit Joshua Copeland and his industry hard. The 38-year-old chef contracted Covid-19...

Ari Emanuel Drops $27.5 Million on Grand Beverly Hills Estate

Good things sometimes do come to those who wait. And, for the financially well endowed, at least, that goodness sometimes comes in the form...

Homebuilder sentiment sets another record high in October

Contractors install shingles on the roof of a home under construction in Park City, Utah, U.S., on Friday, Aug. 14, 2020. George Frey | Bloomberg...

‘Beloved’ Author Toni Morrison’s Lower Manhattan Loft Comes to Market

Not all artists and/or intellectuals are starving. Case in point is the lower Manhattan loft of late literary lion Toni Morrison that’s come for...

Bringing the outside into the office: Coronavirus bolsters push towards healthier building design

CookFox Architects, a firm in Manhattan that works on sustainability and green spaces in designing buildings, is a showcase for biophilia, with its office...