Author: Jennifer Estrada, Senior Manager of Audit and Accounting Services, Gorfine, Schiller & Gardyn

The COVID-19 pandemic has challenged many industries across the globe, including the multi-family and affordable housing sectors.

Gorfine, Schiller & Gardyn’s (GSG), Senior Manager of Audit and Accounting Services, Jennifer Estrada, discusses the state of the multi-family housing marketplace today, how the industry should use CARES Act funding and much more.

Q: What is the current state of the multi-family housing marketplace today?

A: The pandemic has certainly had a significant effect on the multi-family housing marketplace. Over the past 10 years, the industry has seen steady increases in rental rates, but unfortunately, recently rental rates are flattening out as well as decreasing as a result of unemployment increasing.

Q: How should the multi-family housing industry use CARES Act funding?

A: These funds should be used to cover immediate operating expenses. A good way to spend these monies is to review budgets for the current year and for the upcoming year and determine where to cut expenses. These monies could then be used to pay salaries and keep employees as well as covering any emergency repairs or regular maintenances that need to be performed.

Q: What are some additional tips multi-family housing professionals can do in terms of overall business survival?

A: As multi-family housing professionals are reviewing their budgets for the current year, the rest of this year, and for the upcoming next year, they should review upcoming largescale plans and projects. They need to keep in mind that another industry affected from COVID-19 is the manufacturing industry. There's been a decrease in the supply of wood and other building materials, which has really driven up prices.

Multi-family housing professionals need to reevaluate any larger projects, and determine if they’re still feasible, if the price has increased significantly, or maybe if it's better for them to push off these projects for another year. Delaying another year, when the market has rebounded and manufacturers are operating at capacity, could allow for more reasonable prices on repairs, maintenance, or upgrades.

Another option is refinancing. Currently, the interest rates are at an all-time low, and if you have a mortgage, it's a great time to refinance and get a lower rate, or maybe even pull money out of a current project. The real estate market is high, so there might be the opportunity to pull cash out and decrease your interest rate.

Q: What are some of GSG's services for the multi-family housing sector?

A: GSG provides auditing and tax services for the multi-family housing sector. We perform HUD audits for clients, Section 8 funding, mortgages, or any other type of HUD funding. Whether you need an audit to be submitted to HUD, or if you just need a regular audit for your mortgage, we can help.

Q: Is there anything else to add?

A: It’s important to note that all of these changes are hopefully temporary. Once the pandemic is over, we hope to see the multi-family housing market back on the rise and more people back to renting apartments. The education industry is a big user of the multi-family housing market, but many college students are learning remotely rather than renting apartments near or on campus. Hopefully, this is not a long-term effect, and it should be back running full steam ahead in one or two years.

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