06 Apr April 2021
“Your membership and active participation are needed now more than ever.”
Greetings as always to all our members, friends and supporters and welcome to the April 2021 edition of the Official California Apartment Journal. The month of April is also Fair Housing Month. In keeping with our theme, we are here to serve you and we hope that once again you will find the information in this publication helpful to you in the operation of your rental properties.
Like each of you I have been reading and listening to all the news about all the various rental assistance programs that are designed to put money into our pockets for past due rent. I will become a believer when I get a check. I advise each of you to pay close attention to these programs, and we will be providing the latest information as it becomes available, which should be very soon.
With that being said, I would like to share with you some excerpts from two publications that really dive into the deeper issue of the shortage of affordable rental housing and to some degree the overarching cost of housing in general. The information that I am presenting for your consideration comes from the Lincoln Institute of Land Policy called “Through the Roof,” and what communities can do about the high cost of rental housing in America. The study shows that the share of renters paying more than 30 percent of their income on rent rose from less than a quarter in 1960 to nearly half in 2016. The report also goes on to say that more striking, the share of renters paying morethan half of their income on rent rose from 13 to 26 percent in that same time period.
The report found that renters’ incomes are just not keeping up with rising rents and that households are spending an ever-growing portion of their income on shelter. The report goes on to describe the extent of the affordable crisis and explores the forces that drive housing prices and explains the interaction among federal, state, and local housing policy. The report goes on to discuss land use regulations and the growing opposition to not in my backyard (NIMBY) but indicates that is not the entire story. The report cites stagnant incomes, the rising income inequality, the rising cost of construction and limited innovation of global economic investment trends.
In conclusion the report shows that the most effective local housing strategies are comprehensive and balanced, with clearly articulated goals and metrics. The report sums up four reinforcing objectives:
1. Create and preserve dedicated affordable housing units.
2. Reduce barriers to new supply.
3. Help households access and provide affordable, private market homes.
4. Protect against displacement and poor housing conditions.
What a lofty goal.
Well, if that were not enough to keep you up at night wondering what is next, how about this report. Soaring lumber prices are causing disruptions to housing construction across the country, further contrasting the supply of available housing at the time when inventory is already lower than it has been in decades, the report states. The report says that lumber is twice as expensive as it was in the middle of last year. The report states that the surge in lumber prices is a result of the COVID-19 pandemic where suppliers were forced to cut back on production in order to comply with social distancing and local regulations, especially in Canada, which the report says typically provides more than 80 percent of softwood lumber used in the United States. The report also states that some suppliers cut supply even further in anticipation of a drop in demand due to the financial effects of the pandemic.
As housing providers, this is not the kind of news we would like to hear, but it lets us know there is a bigger problem than tenants just not being able to pay their rent as a result of the pandemic. As housing providers, we are key drivers to the economy of the nation, and we need a seat at the table to provide input on policies that affect land use and housing policies. I hope that all of you feel like I do, and many others believe, we were not dealt a fair hand in much of the legislation that has had a devastating effect on us as housing providers. For us to be asked in many cases to go 15 months without the ability to collect contract rent from our tenants is not equitable. Grocery stores, gas stations and other merchants are not required to expend credit as we are required. If you do not pay your credit card per your contractual agreement, you will no longer be extended credit. We are hoping that the stimuli package will provide us some much-needed relief.
Your membership and active participation are needed now more than ever. Like all things, this will not last forever. We are here to serve and provide you the information and tools you need to weather this storm. Looking to see each of you at our next virtual meeting. Keep safe.