Construction Monthly Magazine | Houston 2021 Build Expo Show Edition

You will see more and more home builders and developer
companies incorporate these design concepts in the years
to come.
2. Shifts in Unemployment & Governmental Aid
It’s an unfortunate truth that people are losing their jobs
from COVID-19. In the two weeks following the national
emergency declaration, 10 million individuals filed jobless
claims. Since the multifamily sector forms the bedrock
of the urban workforce, it was greatly impacted by job
losses and the ability to pay rent. Let’s discuss further:
• Job losses impact rental leases significantly for
those working in industries dependent on consumer
spending such as food services, retail goods, personal
services, and tourism.
• Lenders have experienced an increased volume of
calls from clients concerned with debt obligations.
• Freddie Mac’s multifamily COVID-19 program
provides three months of forbearance for multifamily
borrowers and tenants.
• Other government efforts include further legislation
allowing local jurisdictions to implement prohibitions
on both evictions and foreclosures.
There is also the Coronavirus Aid, Relief, and
Economic Security Act which provides an expansion of
unemployment benefits to those who are not normally
recipients. For small businesses, there is a loan and grant
program to help maintain payrolls during this difficult
time.
3. Updates to Investments
Did you know they’re actually long-term benefits for
multifamily real estate investors? According to Globe
Street, a team of real estate experts monitoring the
market closely, there are many positives despite the
future unknowns. Here is what they found in a recent
study:
• Multifamily real estate is maintaining its reputation to
be a solid investment for pension funds and REITs.
• Tenant turnover is predicted to decrease significantly,
reducing the operating and capital costs of securing
new tenants.
• Young professionals might gravitate to apartment
style living due to a rise in telecommuting.
• Vacancy rates should remain relatively low with the
decline in the construction of new units.
In addition to the data above, George Maravilla, the
Senior Vice President of Tower Capital, shares that
he is seeing lender participation is up from the recent
shutdown. He notes that although it is slow, progress is
being made and extensions are being approved.
4. Increase in Technology for Construction and
Home Building Firms
COVID-19 has forced many home building and developer
companies to prioritize technology spending more heavily
than ever before. Much of the market is experiencing
a shift from selling homes in person to now selling
homes online. Here are more technology changes from
COVID-19:
• Increased consumer demand for virtual tours and
showings so home buyers can continue on their
search for the perfect place in a safe manner.
• Consumers are now paying online with a 12%
increase in electronic payment volume in April 2020
compared to February 2020.
• Even construction has adapted to this disruption. For
instance, mechanical and plumbing contractor UMC
Inc. has applied its design and installation to have
touch-free wash stations for construction sites.
• While AI is already being used on job sites, there is
talk about adding social distancing monitoring to its
feature set.
Pepper Contracting Services Inc is one of the many
companies already taking advantage of AI’s features.
For example, since they are already using AI to identify
workers, they are using it to monitor groups as well. The
AI company, Smartvid.io, dropped everything to fulfill this
request. They added a new tag in their system to detect
crowding as a social distancing software.
If I was an owner of a construction company, I too would
consider incorporating these technological features into
my business to protect my workers. As a home builder
or developer, consider the costs and benefits for what
advanced technology means for your business.
These four impacts for multifamily housing are only the
tip of the COVID-19 impact iceberg. Expect to recognize
even more impacts and shifts within the market as time
passes.
Terry Zelen is a seasoned Creative Director with more than 35 years of experience
in Home Builder advertising and marketing.
He is the founder of The Punch List, which is an online blog to help inform home
builders and developers on strategic marketing insights to fuel their firm.
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