Affordable Housing Nonprofits in PNW Receive Strong Support from the Small Business Administration
As Covid-19 has ripped through the nation, its devastation has not spared the affordable housing community. While we most often focus on the mission of affordable housing, it must also be operated as a business to be sustainable. Huge and sudden loss of employment has meant that many residents were not able to cover April rent; at the same time, operating expenses have risen, in some cases radically, due to additional maintenance and cleaning expenses, employee turnover and hazard pay for employees who are required to work in high-risk situations. These operating losses were exacerbated by the necessity for some residents to move into isolation and quarantine, thus creating expenses associated with resident turnover.
The very good news in a very dire situation is that Congress included nonprofit organizations under the Small Business Administration Payroll Protection Program. This program provides a 1% loan that can be forgiven if certain conditions are met and allows recipients to cover payroll expenses and rent for 2-3 months. The program was rolled out quickly, and it was uncertain which applicants would receive loans. Kudos to banks, particularly regional banks in the Pacific NW, who rose to the occasion and processed loans for almost all of the 25+ housing nonprofits we interviewed. Most have now had loans approved and in many cases, funded. These loans are a partial solution… a much-needed and hefty band-aid to deal with the current crisis, stop the bleeding and keep lower income residents in their homes.
But just as the many other types of small businesses in our country are facing, this is the beginning of a long road back to sustainability for nonprofit affordable housing developers and operators. After the crash in 2008, Enterprise Community Partners engaged in an initiative to support nonprofit partners, who collectively preserve and steward the portfolio of housing that is affordable, long-term, to vulnerable populations, families and individuals who fall on hard times as well as people who work hard at low-paying jobs but do not clear enough from their wages to live in or near the communities where they work. As times improved post-recession, these critical community partners regained their footing and Enterprise wound down the initiative. We are now dusting off tools and discussing lessons learned from the last crisis, as we prepare to respond to the damage caused by Covid-19, which has much more intense and complex implications for our nonprofit partners, families who need affordable housing, and our society at large. Our discussions with our nonprofit partners will guide interventions to support the essential work they do in our community. We are ready to roll up our sleeves and set out on the long road back to organizational safety and security together.