Impact of COVID-19 on Affordable Housing Properties

A recently published study by NDP Analytics, funded in part by the National Leased Housing Association, outlines the dramatic impact that COVID- 19 has had – and will continue to have – on affordable housing.

According to the study, “Impacts of COVID-19 on Low- and Moderate-Income Housing Providers.” the COVID-19 pandemic has had a devastating impact on renters and housing providers alike. Unlike many earlier studies, which understandably have focused on the needs of low-income renters, this study is even-handed in its description of the impact on landlords. When households cannot afford to pay rent, the owner of the property loses rental income which is needed to cover operational costs. The report analyzes the economic and business impact of COVID-19 on housing providers and the subsequent impact on renters and surrounding communities in the short and long term.

Rental Landscape Before COVID-19

In 2019, nearly 36% of American households rented (44.1 million). Before the pandemic, nearly half of American households spent at least 30% of their income on rent. Clearly, even before COVID-19, low-income households were stressed about their ability to pay rent.

Housing providers typically operate on small margins and rely on monthly rental payments for the income required to cover operating expenses. The average breakdown of rental income is 39% for the property’s mortgage payment, 27% for personnel wages and salaries, maintenance, and other operational expenses, 14% for property taxes, 10% for capital expenditures, and 9% in income for the owners. Many property owners are small businesses and individuals who are using their retirement funds for rental properties. In short, housing providers spend 90% of rental income on property-related expenses.

As a result of the COVID-19 economic and health crisis, many households lost the income needed to pay rent. At the same time, housing providers had an increase in operating expenses due to enhanced health and safety issues relating to the pandemic. The additional operating costs are largely attributed to extra cleaning and personal protective equipment (PPE).

Rental Income

Due to the nature of the COVID-19 economic crisis, many renters who always paid rent on time were unable to make monthly payments due to furloughs, job loss, and other economic hardships. Overall, renters have been disproportionately affected by the pandemic. Workers in the industries that have been most impacted by COVID-19 (food service, travel, entertainment, retail, and transportation) are the most likely to rent. Additionally, about 43% of households most likely to be affected by COVID-19 were already struggling with rent cost burdens before the crisis. More than 75% of landlords implemented flexible payment policies for renters negatively impacted by the pandemic.

However, housing providers rely on rental income as the primary source of revenue. The vast majority (88.9%) of affordable housing providers experienced revenue reductions due to COVID-19. Average declines in revenue were greatest for smaller housing providers with fewer than 1,000 units and 1,000 to 5,000 units (12.8% and 12.2%, respectively).

Despite the increase in non-payment of rent, few renters have been evicted for missing payments. From March to July 2020, (with some additional relief in September), a federal moratorium prevented many housing providers from evicting residents due to non-payment of rent and some states and municipalities have created similar rules. In August 2020, less than 18% of housing providers reported the eviction of renters with missed payments.

Financial Losses

Before the pandemic, for every dollar of rent received, 39 cents went to the mortgage, 27 cents for operating expenses, 14 cents for property taxes, and 10 cents for capital expenditures – leaving only 9 cents in profit. With an 11.8% decline in rental income, housing providers now receive 88 cents in rent instead of $1.00. To make matters worse, a 14.8% increase in operational costs raises the expenses from 27 to 31 cents, leaving only four cents of every dollar for capital expenditures and income.

To offset financial losses, 56.4% of housing providers applied for and received aid from government relief programs. Only 41.5% of housing providers with under 1,000 units received assistance ($44,288 on average), compared to 76.2% of housing providers with 1,000 to 5,000 units ($310,017 on average). 60.6% of large housing providers (over 5,000 units) received an average of $730,679.

Impact on Renters

In the short run, renters have largely been removed from the impact of the financial hardships faced by housing providers. Government aid and protections implemented in response to the pandemic, such as expanded unemployment benefits and eviction moratoria, have provided important assistance to renters. However, these programs are expiring to a great extent, leaving uncertainty for the future. The lack of action at the federal level, particularly in the Senate, does not bode well for any relief prior to the election. This is especially problematic for renters since rent payments accrue even when evictions are restricted.

In the long run, eviction moratoria and increased regulation on housing provider-renter relationships negatively impact housing supply and renter mobility. Restrictive policies, such as eviction moratoria, limit the ability of renters to move, thus limiting labor mobility.

Significantly, job and income losses caused by the pandemic put many people, particularly Black and Latino adults, at increased risk of housing instability. As a result, the long-run impact on renter mobility and housing supply is likely to have a disproportionate impact on these communities and exacerbate existing racial and economic disparities accessing safe and affordable housing.


For those of us in the affordable housing field, nothing in this study is a surprise. We know that the policy of protecting renters from eviction while not providing support for landlords will lead to massive evictions and property failures. Unless support comes from the federal government, both in terms of rental support for residents and operational support for landlords who are prohibited from taking action against non-payers, 2021 will be a disastrous year for the affordable housing industry.