COVID-19: Development Ban in Boston

The Mayor of Boston has stopped all construction projects because of COVID-19. From the Boston Herald:

That means all big and small projects must be stopped and the work zones secured, the mayor said. The only exceptions will be emergency projects, mainly roadwork and gas hookups. The city will reassess after the two-week span, Walsh said.

No such ban has been proposed in Seattle or Washington or anywhere else at this point. It is unclear how lockdowns in other states are impacting construction projects. So far, construction projects continue in Washington. We’ll let you know if we see anything change on this.

COVID-19 Relief for Artists

There are a couple of emerging resources for artists impacted by the COVID-19 response. The City of Seattle has a post up that outlines a couple of programs including one being managed by Artist Trust. The funding available from this program includes,

• Lost wages and earnings; 
• Loss from event, performance, and conference cancellations and school / community-based education closures 
• Reimbursement for travel loss 
• Rent and mortgage payments, food, utilities, and other living expenses 
• Medical expenses

The Artist Trust website has complete information and an application available.

Another program has been created called the Artist Relief Fund, and the application for that program is available online as well.

Almost all artists in Seattle rely on public events and performances for their work and many of them have jobs in the hospitality sector. These will be among the hardest hit people in the months ahead.

City of Seattle Issues Guidance on COVID-19 Moratorium Implementation

I just got an email from the City offering guidance to how to implement the eviction moratorium. Nobody is even thinking about eviction; what I’m hearing is concern about the broad and deep loss of income for many people from every sector and income level. I’ll try to keep posting what I hear that is relevant and add to the tab in the menu above.

Fa qs covid 19 eviction moratorium from Roger Valdez

The COVID-19 Eviction Ban is Here

Mayor Jenny Durkan is imposing a ban on evictions for 30 days because of COVID-19. This ban will last through April and could be extended. Let me start with a paragraph I wrote in a post at Forbes about COVID-19 eviction bans:

“An eviction ban now does nothing to replace lost wages, money that people used to pay all their bills. An eviction ban does nothing to help buy groceries. An eviction ban does nothing to fill prescriptions, put gas in the tank, pay student loans, or help folks back home. In a word, an eviction ban does nothing but defer rent costs to the future, a future that for almost everyone today is as unclear as when a vaccine for the virus might be found.”

Nobody out there was thinking about eviction other than activists like Kshama Sawant who is bent on destroying the rental housing market.
There are some out there who think that by supporting such a ban, housing providers will be seen as “good guys,” willing to help out in a crisis. You are already the good guys. Housing providers and people who build housing are giving people what they need, and everyone is already pitching in to help with families struggling.

Here’s something I heard from a housing provider last week:

“We have heard from many renters with concerns about paying rent in due April 1. Most of these renters are ideal tenants with no issues of rent payment. As an owner, I am lucky enough where I can work with these renters for a month or 2. But this is grave concern to me. Knowing how these landlord businesses operate, most landlords (including most of my clients) will not be able to withstand 2 months of this.”

This is what is real. A ban on evictions does nothing to help this situation. What would help is immediate assistance for families and individuals who are losing jobs and income. That would be the compassionate thing to do. Instead, the Mayor will create more question and chaos at a time when certainty is what is desperately needed.

Please let us know how you’re dealing with this crisis. We need real stories from people working with residents and each other to show that nobody is using this as an excuse to evict anyone. Email me here: Roger@seattleforgrowth.org

Coronavirus In Seattle: Impacts on Economic Growth

As Coronavirus (Covid-19) impacts Seattle more and more, what kind of changes it will bring to the region and city that has seen it become the 3rd fastest growing city in the country. Seattle’s relationship with growth has always been ambivalent. Will attitudes about growth and new development change if the local economy takes a hit? Like it or not, the spread of the virus and Seattle’s status as a hot spot, will have many economic impacts along with the real suffering of people who become ill. Here’s a quick scan of what we know so far.

Tourism

Throughout the world, cities and industries that rely on tourism are experiencing hardship right now. As King County is currently the most affected area in the U.S., tourism and accommodation industries have taken a big hit. Just yesterday, President Trump’s Chief Economic Advisor, Larry Kudlow, advised against visiting Seattle for the time being. Due to the growing concern over the spread of the virus in Seattle, tourism has seen a hefty drop, consequentially impacting hotels and accommodation services, airlines, sporting venue use (the Mariners may play their home games without spectators), the use of conference centers, and many small local businesses. Although Governor Inslee does not agree with Kudlow on the topic of visiting Seattle, the city has already experienced unfavorable economic impacts due to lessened travel.

Retail

Restaurants, grocery stores, malls, and local businesses have been experiencing far less business in the past week than they are used to. With many people staying in, we can observe an increase in e-commerce, as more people have become keen on ordering their groceries online, and staying in from social gatherings. Although physical retail sales have seen a decline, e-commerce is on an even faster rise than before. And this may not change after Coronavirus passes. People who were previously hesitant to purchase groceries or other needs online, may become adapted to it through this experience. Retail centers that are anchored by grocers may be permanently impacted by this change, and see less traffic overall in the future. Mayor Jenny Durkan recently announced that she is working with Vice President Pence to help provide financial support to local businesses in Seattle that are experiencing hardship with the lessened traffic and sales. However that temporary aid will not provide long-term relief to the potential permanent loss in business.

Warehousing

About warehousing, Dr. Norman Miller, Hahn Chair of Real Estate Finance at the University of San Diego says, “After hotels, the next most impacted property type will be bulk port warehouses that deal with imports of construction materials and car parts and electronics, while local warehouses servicing the last mile will benefit from a surge in e-commerce as people shop more online and less in person, to the extent that inventories are produced locally.” Warehouses supported by e-commerce will thrive, but those which provide goods to physical retail stores, or the construction center, will see a downfall.

Office

Memos sent from the Seattle offices of Amazon, Microsoft, Google, and Facebook, along with other large corporations, have entailed instructions for employees to telecommute instead of coming into the office. This is being done to help mitigate the spread of coronavirus, as some of the companies have employees who have contracted the virus. In the past, there has been an increase of demand for telecommunication in the office market, with many millennial employees expecting it as a guaranteed feature to their daily work lives. Although some companies have been resistant to offering guaranteed work-from-home time, the increased telecommunication due to coronavirus will test the concept throughout numerous departments in these companies, and may become a more permanent trend if everything works fluidly. A direct impact of increased telecommunication on CRE is reduced square footage per employee. Employees need less dedicated space when they consistently work from home, resulting in lessened square footage in office space leases.

Residential

The residential market will see an array of different impacts from the coronavirus outbreak. With low interest rates, refinancing is bound to increase, and investors will subsequently create a rise in new purchases. However, with unemployment uncertainty, the single-family home-purchasing market will start to slow, as people become more conservative with their spending and aspirations. Although a recession is unlikely, a lower GDP and higher unemployment rate going into the spring will trigger consumer uncertainty and subsequent economic reactions.

The commercial real estate sectors that are seeing the negative consequences of a viral outbreak and consumer response, are by far retail and warehousing. Some of the impacts will shift back to normal once the viral spread slows, but others may linger for years to come.

Layla Khademi is a Master of Science in Real Estate candidate at the University of San Diego School of Business. She received her bachelor’s in business administration, marketing, and finance from Seattle University in 2019. She has blogged for Reed MIDEM’s MIPIM conference, as well as the University of San Diego Burnham-Moores Center for Real Estate. Layla has worked in real estate for the last six years, having roles at both the Seattle University Board of Trustees facilities and technology committee, and at Starbucks’ real estate department. She currently works in multifamily investment and property management in Seattle.