As we approach a new year, we asked leaders in housing, health, education and the economy about the ongoing challenges they’re facing with COVID-19. Today marks the first of a four-part series of questions-and-answers with experts. We asked Laura Lafayette, chief executive officer of the Richmond Association of Realtors, about the global pandemic’s impact on the region’s housing issues.
What have been the biggest challenges facing the region’s housing market during the pandemic?
The challenges have changed as the year has progressed. At the onset of COVID-19, the greatest challenge for our members was ensuring that any gubernatorial executive order would allow the practice of real estate to continue. Next, our members needed to learn how to safely assist buyers and sellers — utilizing personal protective equipment, showing properties in ways that observed safe social distancing practices, etc.
Thankfully, we already had in place the technologies necessary to enable real estate transactions to be negotiated, executed and closed in a virtual environment. This made all the difference in the world. As a result, the residential (for sale) market suffered a brief slowdown in April, but came roaring back in May. Incredibly strong demand before COVID-19 has continued apace. In 2020, metropolitan Richmond will have experienced its strongest residential real estate market since 2005.
But the story is very different for our region’s renters. Many of those who lost their jobs or saw their hours curtailed and their earnings severely diminished are renters. The eviction moratoria and the millions of dollars in rental assistance disseminated by state agencies and their nonprofit partners, e.g., ACTS, have enabled thousands of Richmond area residents to remain stably housed for now.
COVID-19 has disproportionately affected some communities over others. How has housing been a factor in the virus’ spread?
Thankfully, our community moved quickly to shelter and keep sheltered formerly homeless individuals who were at high risk of contracting the virus. Of course, for folks who reside in overcrowded housing that does not allow for quarantining away from others who have been exposed to the virus, they are more vulnerable than individuals living in housing that allows them to safely distance themselves from others.
The quality, condition and location of housing always have affected residents’ health outcomes; COVID-19 has shone a bright light on the connection between housing and health.
At the start of 2020, the Partnership for Housing Affordability began implementing a regional framework to address the Richmond region’s shared challenges, from homelessness to quality and stability issues. What strides were made this past year in reaching its goals, and what’s the outlook for progress in 2021?
Through tremendous collaboration, the partnership made much progress on many of the framework’s solutions this year. Revitalizing manufactured home communities is a priority solution in the framework. One of our nonprofit partners, project:HOMES, purchased the Bermuda Estates community in Chesterfield County and — in consultation with residents — is planning to replace the current units with sustainable, newer manufactured housing.
In September, the partnership launched the Housing Resource Line (HRL) to connect residents who have housing needs to existing housing resources. To date, the HRL has assisted more than 1,800 residents, connecting many of them to more than $90,000 in financial assistance.
In 2021, we are hopeful that local funding commitments will help bolster production to address the growing demand for rental housing. The effects of the pandemic have emphasized how foundational housing is to a household’s health and stability.
Richmond has been ranked among the top 10 localities in the U.S. with the highest eviction rates — and five of those are in Virginia. How will the state’s new measures to promote housing stability help curb eviction rates?
In 2019 the General Assembly, with overwhelming bipartisan support, passed several bills aimed at reducing evictions. The short answer is it’s too early to tell if these laws are having a positive effect, as many of the changes just were beginning to take hold when COVID-19 struck. There’s no question that the rental assistance program, led by the Department of Housing and Community Development and Virginia Housing (formerly VHDA), have enabled tenants to remain housed and kept landlords whole.
The question becomes: What happens when the money runs out and the moratoria are lifted? As we emerge from COVID-19, it will be important that tenants know their rights and the resources available to them, e.g., the city of Richmond’s eviction diversion program, to remain stably housed if at all possible.
Mortgage rates are at an all-time low. How is that affecting the region’s housing market?
Historically low interest rates certainly are one of the factors fueling the desire of buyers to enter the housing market. Typically, low interest rates enhance affordability. But because demand for homes is outpacing the supply, the price of homes continues to rise. Low interest rates are also prompting many households to refinance their mortgages. So if you are loan officer, paralegal or closing attorney, you likely have worked at a feverish pace in 2020.
What do you anticipate for the coming year?
I anticipate that many of the trends we witnessed in 2020 will continue in the new year. We will continue to see demand outstrip supply. While most buyers will want to tour a home before making a purchase decision, many of the other steps in the transaction process will be handled remotely. This year forced the adoption of virtual platforms: Realtors and their clients are going to want to continue to realize the efficiencies created through technology.
This coming year could be one of great challenge for renters and landlords. Through CARES Act dollars, the allocation of state funds, and the incredibly hard work of both state agencies and nonprofits, thousands of renters have remained stably housed and landlords have been made whole in 2020. I worry for everyone involved when these resources no longer are available. COVID-19 has cast a bright light on the fact that our region lacks an adequate supply of affordable housing and that systemic racism has brought us to a housing landscape that is marked by profound inequities. My hope is that in 2021, we will garner support for and find the fiscal resources to implement policies that will create more affordable and equitable housing opportunities.
Tomorrow: the economy
— Pamela Stallsmith and Chris Gentilviso