In this issue:
- Governor Northam launches COVID-19 Housing Issues Website
- MetroStudy Hosting Weekly Housing Updates
- Governor Northam Executive Order 61
- Virginia’s Secretary of Finance Provides April Economic and Revenue Update
- Federal Reserve Bank of Richmond: State Revenues Hit Hard by COVID-19
Research, Trends, and Perspectives:
- CNN: The US already had a housing crisis. COVID-19 has only made it worse
- WSJ: For Home Builders, a Better Kind of Recession
- NASDAQ: Homebuilder Confidence Rises in May: Is the Worst Over?
- HousingWire: Has the mortgage forbearance curve flattened?
- Northern Virginia Affordable Housing Alliance: NoVA Housing Directors Forge Ahead
- Virginia Business: Pandemic housing market has fewer sellers, higher sales prices
- Charlottesville Tomorrow: Building a better environment – construction’s impact on climate and equity
Announcements:
Governor Northam launches COVID-19 Housing Issues Website
Governor Northam announced that his administration has launched a website of resources, ”Stay Home Virginia”, in partnership with the Virginia Housing Development Authority (VHDA) and the Department of Housing and Community Development (DHCD). The website is a consolidation of many useful tools, helpful information, and resources for renters, homeowners, landlords, and those experiencing homelessness. Summaries of both the federal and state protections are also outlined. Click here for the Governor’s press release on the current state of housing security efforts.
MetroStudy Hosting Weekly Housing Updates
Chief Economist Ali Wolf and Senior Managing Principal Tim Sullivan has been hosting weekly webinars on the impact of COVID-19 on the residential construction market and the national economy. MetroStudy’s webinars are hosted every Wednesday. Click here to sign up for these informative updates.
Governor Northam Executive Order 61
On May 14th, Governor Northam issued Executive Order 61 which established a framework for the first phase of the “Forward Virginia” plan to safely and gradually ease public health restrictions while containing the spread of COVID-19. Governor Northam also issued “exemptions” for Northern Virginia, the City of Richmond, and Accomack County to allow them to delay moving to Phase 1. Although the Governor’s new Executive Order does not place any additional restrictions on our industry, we wanted to provide you an overview of the recommendations and guidelines for Phase One. Click here for more information.
Economy:
Virginia’s Secretary of Finance Provides April Economic and Revenue Update
Last week, Virginia Secretary of Finance, Aubrey Layne, provided an economic and revenue update to the Joint Money Committees. This revenue report is the first monthly report containing significant impacts due to the coronavirus (COVID-19). Normally, April is a significant month for revenue collections. In Virginia, payroll employment rose by 0.6 percent in March compared with last year. Northern Virginia posted growth of 0.8 percent; Hampton Roads fell 0.2 percent; and Richmond-Petersburg rose 1.0 percent. The seasonally adjusted unemployment rate increased 0.7 percentage point to 3.3 percent in March, 0.4 percentage point above a year ago. The unemployment rate is expected to rise significantly in the future as the full impact of business closings related to COVID-19 is realized. Secretary Layne’s presentation can be found here.
Federal Reserve Bank of Richmond: State Revenues Hit Hard by COVID-19
Having fewer people working and spending less on goods and services not only hurts the U.S. economy as a whole, but also negatively impacts state and local governments that depend on income and sales taxes as their primary sources of revenues. In fact, the National Association of State Budget Officers estimates that, on average, about 45 percent of state revenues in fiscal year 2019 came from income taxes and another 30 percent came from sales taxes. This, of course, varies by state. In Virginia, 70% of FY19’s General Fund revenues came from personal income tax and 17.5% came from sales tax. Click here to read more about the impact of COVID-19 on state revenues.
Research, Trends, and Perspectives:
Harvard University Joint Center for Housing Studies: Flexible Zoning and Streamlined Procedures Can Make Housing More Affordable
As the nation recovers from the pandemic, it is essential to expand the supply of lower-cost rental housing. Allowing developers more flexibility in land use and reducing the procedural barriers to development would make building apartments less expensive. Click here to read more.
National Housing News:
CNN: The US already had a housing crisis. COVID-19 has only made it worse
The cost of housing in the US has risen faster than wages for decades. But the problem is particularly bad in California, where a housing shortage and rising rents have forced tens of thousands of people onto the streets and into shelters. The shortage of housing, Escudero said, “is really immoral, inhumane, and unjust.” And, “it’s become even more immediate now with Covid-19. We cannot wait years in order to get secure housing when there’s people now literally dying on the streets and spreading this pandemic”. Click here to read more.
WSJ: For Home Builders, a Better Kind of Recession
The coronavirus pandemic is hammering home builders, but they could emerge from the crisis with less damage than other industries.
Construction on new homes plummeted last month. The Commerce Department on Tuesday reported that housing starts fell a seasonally adjusted 30% in April from a month earlier, which came on top of a 19% decline in March. That brought the level of construction begun on new homes to its lowest level since February 2015, when a spate of bad winter weather idled construction crews.
Restrictions on construction activity played some part in the decline in starts, but the sudden collapse in the economy probably mattered more. With unemployment reaching levels last seen during the Great Depression, home builders are understandably worried about what housing demand will look like in the months and years ahead.
That said, their moods have brightened a bit this month. On Monday, the National Association of Home Builders said that its measure of builder sentiment rose in May after plumbing its lowest levels in eight years in April. While for many businesses the coronavirus crisis is the biggest economic shock in living memory, for home builders it still doesn’t come close to what they experienced after the housing bust and financial crisis, when they were at the epicenter of the problem. Click here to read more
NASDAQ: Homebuilder Confidence Rises in May: Is the Worst Over?
Homebuilder sentiment bounced back in May, signaling that the worst of the economic downturn is probably over. According to the National Association of Home Builders (NAHB) , confidence in the market for single-family homebuilders saw an uptick after the steepest-ever, one-month decline in April. Click here to read more.
HousingWire: Has the mortgage forbearance curve flattened?
New data from the Mortgage Bankers Association shows that the overall rate of forbearance is still on the rise, but the rate at which that figure is increasing has slowed to the lowest level since the crisis began. Click here to read more.
Virginia Housing News:
Northern Virginia Affordable Housing Alliance: NoVA Housing Directors Forge Ahead
While economic circumstances have stripped non-essential programs and services out of FY21 budgets, local governments have found a way to advance the work of housing and community development at this critical time. Jurisdictions are becoming more sophisticated in using technology to display and analyze data that can be used to drive policy decisions. Fairfax County has developed an affordable housing dashboard to track their inventory of committed affordable housing and market-affordable units. Alexandria is continuing their community engagement for an accessory dwelling unit ordinance through an online video, and Arlington continues to refine their Housing Conservation District as they engage residents in the Lee Highway Study Area planning process. In Loudoun County, there is excitement about the news of a new Office of Housing under the County Administrator. This decision by the Board of Supervisors elevates housing as a priority issue for Loudoun. Click here to read more from the Northern Virginia Affordable Housing Alliance.
Virginia Business: Pandemic housing market has fewer sellers, higher sales prices
Virginia Business virtually sat down with Larry “Boomer” Foster, president of Long & Foster Real Estate, to get the current pulse on the real estate market in Virginia. The most recent data published was reflective of March real estate transactions in Northern Virginia, but Foster shared insight from the most up-to-date real estate data available from the past two weeks in April. Click here to read more.
Charlottesville Tomorrow: Building a better environment – construction’s impact on climate and equity
As the temperature begins to rise while people are at home because of the COVID-19 pandemic, they soon will find themselves reaching for the thermostat. While a spike in power bills is common in summer and winter months, how steeply they rise in some cases can be influenced by the construction quality of a home or apartment. Click here to read more.
