Abode Communities’ Robin Hughes on Addressing Housing Insecurity in a Pandemic

With shelter in place mandates, the scarcity in metro Los Angeles of affordable shelter and, at best, a recession underway, how is Abode Communities addressing the short-term operational challenges obviously presented by COVID-19?   

Robin Hughes: Currently, everyone at Abode Communities and all of our residents are safe, and I’m happy to report we have not had a reported incident of the coronavirus. It's been a very trying time for our organization, employees, and residents. We took action four weeks ago to transition to remote operations so that we could continue the provision of affordable housing while this crisis was happening, and that included modifying operations at our sites.

All of our employees are primarily working from home, except for essential work at the site level, as we are continuing to operate our affordable housing. We feel a little like it is the calm before the storm with rent coming due for residents who have experienced job loss, or a reduction in wages, as a result of the pandemic. With the mandatory no-eviction for non-payment of rent in place, we are bracing for how to manage this process and make sure that people continue to be housed.

I think one of the things that uniquely positions nonprofits like Abode Communities is our resident services team. Although they are not able to deliver our typical services on-site, they're continuing to engage with our residents. Both our resident services coordinators and our property managers are doing welfare checks to make sure families, and seniors in particular, are safe at home, and are providing relief resources in the community. We are taking extra care of our residents during this time; it's not about simply collecting rents, it's making sure that our residents are safe.

Our production pipeline is moving along. As you know, most of the stay-at-home orders have exempted construction. We are continuing to move projects through our pipeline, preparing to submit for entitlements on a couple projects, and in fact, hoping to start construction by the end of the year on a couple of others.

As we sit here today, our operations are continuing to flow as we make modifications on how we work remotely. It's been really great to see our public and private lending partners continue to be engaged because I think we all know how important it is to continue to produce housing during this time. We're also preparing for a significant difference in the future when we return to our new normal. We know that continuing to address the affordable housing and homelessness crisis that we have in the region will be even more critical, and we will continue to need resources to make that happen.

Even though you are personally sheltering in place, are you able to connect to others in the affordable housing community to share experience and address the common issues and needs arising from operating during the pandemic?

Abode Communities is part of a national group called the Housing Partnership Network, which is a peer exchange organization that has been incredible at connecting nonprofit affordable housing developers and owners throughout the country, and focusing on best practices during this time.

Initially, the key issues that we were all faced with were: how to manage our properties during this time; what protections to put in place for our residents and employees;   preparing stress tests on our portfolios as we begin to experience rent losses when our low-income residents are no longer able to pay their rent; what to do with our public and private lenders; how do we manage any mandatory mortgage payments and forbearance? Then what we’re thinking about is what that mean for our organizations; when can we expect to receive revenue from our properties; how do we make sure that we have the operating reserves in place and capital that we need to continue to keep our doors open?

We're definitely looking at the resident level to maintain folks in their homes and protect our employees and organization, but we also don't want the entire financial system in which we have built to produce affordable housing to collapse during this time.

With federal, state, and local governments acting presently to assist NGO’s like Abode Communities to address the impacts of COVID-19 on the homeless and others with housing needs, share in real time what's promising and less promising about what’s being offered. 

We were very excited that the CARES Act’s Paycheck Protection Loan Program was open to nonprofit organizations—typically, nonprofits are not eligible for SBA (Small Business Administration) loans. Unfortunately, the system is not set up to receive applications from nonprofits, so the portals for every single bank that we have banking relationships with are open but only to small businesses and sole proprietors. We were very concerned that nonprofit organizations who've made commitments to keep employees employed would not have equal access to this aid. We are trying to work very closely with our lenders to try and make sure that nonprofit organizations are not disadvantaged within this program.

Within the CARES Act were resources available for housing as well, included in the HUD budget. There was about $12.4 billion available for housing and community development including Community Development Block grant (CDBG) funds that come down to state, city and county government. We are advocating for those resources be available to provide rental assistance for our residents and operating assistance for landlords to make sure our properties continue to operate, because CDBG funds are very flexible and discretionary.

There was also tenant-based rental assistance programs and public housing operating funds. Those funds will be very helpful for our properties that have project-based Section 8, so that as tenant incomes go down, their portion of the rent  will also be reduced. We're really happy for seniors or extremely low-income families who are living in Section 8 properties. We have a couple of public housing developments, so those operating subsidies will go far to make sure that those residents are able to stay in their homes, and we're able to collect the rents that we need to operate our properties.

Unfortunately, that leaves out a slew of properties that are subsidized but don't have rental assistance. Quite frankly, those are the properties where people are actually working and will have a financial impact with loss of jobs. We have been advocating at the state level to get additional subsidies for rental assistance for developments that do not have rental subsidies such as some LowIncome Tax Credit projects. We're still very concerned that while there are some resources available  to help low-income residents stay in their homes with rental assistance, it's still not enough; it's not covering our entire portfolio.

We're definitely getting support from our lenders for forbearances. It's currently very short term because I think they want to protect themselves, and when I’m able, I've been pushing some lenders to think about forbearances not as a three- or six-month issue, but that it's going to be long term that we need relief.

I think public policymakers have to think about the deep impact this pandemic will have immediately on low-income people, but also long term, so that we begin to shift our public policy to make sure that part of our society has the relief resources that are needed.

There already is political momentum in Congress to approve additional federal dollars to assist communities, business and service providers with addressing the challenges of COVID-19. What would you – as a community affordable housing operator and advocate- hope is included in any new congressional appropriations?

As part of the national group, HPN, we have been advocating for two components. We need funding that is flexible and goes through existing systems that we know are proven to work at the federal level. As I mentioned earlier, there was an allocation of CDBG funds in this last relief package. I believe we're seeking at $10 billion in funds that—when it gets down to a local level—are restricted for supporting affordable housing.

Again, there are two areas where that support needs to be direct. The first is rental subsidies for our residents to make sure that they remain in place even if they are not in the public housing, Section 8, developments, but for properties with no operating or rental subsidies. Then, to help cover additional costs that we are experiencing at our sites to make sure that our residents are safe, and to the extent that our properties are experiencing loss in rent, we need subsidy at the landlord level as well.

There's another program at the federal level called the Capital Magnet Fund through the U.S. Treasury Department CDFI Fund. Those funds were initially approved in the stimulus package that Obama signed back in 2008/2009. The proposal is for additional funds become available to help with post-recovery to ensure that we continue with the production of more affordable housing, because it's flexible capital that we can use to help support our pipeline.

Again, we have to focus on how we sustain our operations today, but equally important, how we continue production once the virus has been contained. 

In January, Abode Communities was awarded $40 million in LA City’s supportive housing (HHH) funds to produce 360 prefabricated new homes. Share the status of projects funded with these dollars and elaborate on what’s needed, going forward, to grow the pipeline of affordable housing projects in metropolitan Los Angeles? 

As I mentioned earlier, our pipeline is continuing to move forward including the $40 million commitment that Abode Communities—along with Mercy Housing and LA Family Housing—received from the City of Los Angeles through their housing challenge program. The city has acknowledged that we will need a little more time, so they've extended the deadline for when we need to secure property, but we are active in the market right now pursuing land acquisition opportunities throughout the city of Los Angeles. The HHH program is continuing to move along. We have two other projects in our pipeline right now that also have HHH commitments, and we're just waiting for state funding to be approved. We're hoping those two projects are able to start construction by the end of the year too.

The existing resources that have been in place for the past couple of years that support the production of permanent supportive housing and affordable housing continue to be available to make sure that we are addressing the state’s needs. At the state level, the various housing programs continue to be available to us both in terms of providing regulatory relief—making sure that our properties are financially stable during this time—and adjusting application timelines to make sure that we can prepare and submit for funding awards during this time.

With recent California legislation and local policy & funding support for increasing the production of housing and urban densification, is it possible that public reaction to the challenges of the pandemic and public fears of contagion will impact future project plans that increase residential density and encourage congregate living?  How, from your experience, should public health considerations, which have been rarely addressed by the state when legislating housing supply, best be incorporated into future affordable housing plans and projects? 

As we have addressed the issue of homelessness, public health has been a very important part of, not only how we develop, but how we design affordable housing because we know the impact of high-quality design on people who have lived on the street or been unsheltered. I look forward and think about what we have applied to healthy design and for the well-being of our residents, I feel like we have moved in the right direction.

Despite this pandemic, I don't think we move away from building dense projects. For example, I think about our Rolland Curtis project that we just completed last year that went from a 48 garden-style apartment to 140 units on the same site. But, when you look at how it's physically designed, the quality of the building materials, and the sustainable features that we put into the development, it’s exactly what that community needs as they shelter in place right now.

I compare that to buildings that were perhaps built in the 50s, 60s or even 80s, that were double-loaded corridors that did not bring in natural light or use healthy, lower-quality materials. We have evolved significantly in how we approach design and density to build healthy communities for residents. Going forward, we will give more attention to combining healthy design with density and development.

The role of organizations like Abode Communities is one of equity, making sure that people with lower incomes have access to the same type of quality design and developments as anyone else. We are thinking about the health of those communities as we're building our housing.

While advocates for homeless housing have long advocated “healthy-by-design”, do you envision public health and healthy by design being elevated from an ideal to standard practice?

In the affordable housing world, we have gone so far in terms of sustainability, and for us is that is more than energy efficiency. It is around the healthy well being of the community and making sure that we're designing with health in mind. I feel that, as an industry, we are so far ahead that it is top-of-mind in our design, so it’s how that rolls over into market-rate developments.

More than likely, we will see—in Los Angeles for example—the push for building healthy communities coming from the City Planning Commission or city planning. 

Lastly, as one of the most revered and experienced affordable housing developers in the country, and you've had a lot of time to think about the issues and challenges. How are you coping with a pandemic affecting everything you do, including your own health, those who are working with you, and those who are served by your housing. How are you handling this?

This has probably been the most challenging time in my life and my career. I wake up every day grateful that my family is safe and able to shelter in place in our beautiful home. I think about our employees and want to make sure that they're safe and able to manage emotionally and spiritually; people are being asked to do a lot in their homes right now. I think about our residents, and I want to make sure that we're doing everything that we possibly can as an organization to make sure that they remain housed during this time.

Then crazy alarm goes off reminding me that I also have to make sure that this organization is still here a year from now. It's been incredibly stressful and challenging, but I have to say I have a wonderful team, and they always remind me that we're in this together. Not one of us has to take on the full burden, and it’s been really great to really see how our team has come together to get us through this crisis.