National Apartment Association (NAA) President and CEO Bob Pinnegar joined ABC News Live to discuss the impact that the COVID-19 pandemic is having across the rental housing industry, particularly on small, mom-and-pop rental housing owners and operators. As Pinnegar notes, these owners account for more than half of the country’s rental housing product, owning and operating an estimated 22.1 million rental units nationwide. “This is a group of individuals who have decided to, instead of putting their money in a 401(k), put it in real estate,” said Pinnegar.
Despite the prevailing image of the wealthy owner, these operators often own few properties and work on narrow margins. In fact, regardless of operator size, the entire industry operates on extremely narrow margins – only 10 cents of every dollar of rent is considered profit. The remaining 90 cents ripples into other sectors of the economy through mortgage payments, property taxes, utilities, insurance, maintenance, payroll – the rental housing industry supports 17.5 million jobs nationally – and other operating expenses. Accordingly, as rental payments continue to be deferred, rental housing providers are forced to carry the burden with little financial reserves to tap into.
The interview came as Congress considers President Biden’s American Rescue Plan, a proposal that includes another $25 billion in rental assistance (the proposal includes $30 billion total, with $25 billion marked for rental assistance and $5 billion for utilities). Pinnegar stressed the need for continued rental assistance to achieve our shared goal: Keeping residents in their homes. For rental housing providers, direct rental assistance remains the lifeline they need to continue to pay their mortgages and taxes, as well as perform necessary maintenance projects to provide safe, steady housing.
Watch the full interview and get NAA’s take on why rental assistance is needed urgently.