How Class C Apartment Residents are Getting By

The pandemic’s impact on apartment dwellers hasn’t been uniform.

In its third-quarter National Housing Survey, Fannie Mae found that nearly one-third of respondents have experienced non-voluntary employment changes, including reduced working hours, layoffs, furloughs, pay cuts or their employers going out of business.

Fannie Mae found that lower-income households, renters and minorities are two to three times more likely to be concerned about their ability to pay their bills. They are also significantly more likely to be concerned about job loss and to have experienced job loss or furlough during the pandemic. 

A smaller of these lower-income households have been able to work from home when they usually don’t. Twenty-two percent of renters earning less than the area median income (AMI) have experienced working from home in Q3 compared to 38% of those at or above AMI, according to Fannie Mae.

Respondents felt other stresses as well. Nearly one in five survey respondents experienced disruption of childcare, one in ten have had family and or friends move in, and one in three are regularly working from home when they usually did not do so, according to Fannie Mae. 

Ultimately, the pandemic will harm the ability of lower-income households, renters and minorities to own a home. Fannie notes that both the credit scores and savings of lower-income households will be hurt by the pandemic. 

Additionally, in its Mortgage Lender Sentiment Survey, Fannie found that lenders reported a tightening of credit standards over the pandemic period. Also, landlords have tightened leasing standards, creating additional housing challenges. Finally, smaller landlords, who often provide non-subsidized affordable rentals, may also be challenged to sustain their mortgage payments if their tenants fall behind on their rent. 

Despite a lot of talk about an urban exodus, Fannie Mae found that mobility has not been affected meaningfully at a national level. It notes that mobility preferences could change if people continue working from home after the pandemic.

“Employer remote-work flexibility could significantly decrease the needs for local job recruits and the daily commute to the office to allow employees to have an even greater home and work location possibilities,” writes Fannie Mae Senior Vice President and Chief Economist Douglas Duncan.

Lower-income employees may need to relocate to where their jobs migrate due to the changing work and housing patterns of higher-income employees, according to Fannie Mae.

Right now, some observers only see migration in the higher income levels.

Marc Wieder, partner and co-leader of Anchin’s Real Estate Group, says that not all migration is the same in New York City.

It often varies by income level. “It’s interesting because there hasn’t been a tremendous decline of people leaving the city,” Weider says. “But people in higher income levels are leaving, and people with lower income levels are coming into the city.”