Q&A: ApartmentData.com president talks ramifications of COVID-19 on Greater Houston-area housing

Recently, ApartmentData.com President Bruce McClenny spoke with Community Impact Newspaper about the state of multifamily housing in the Greater Houston area as well as about how the ongoing coronavirus pandemic has affected different aspects of the industry. (Courtesy Pexels)
Recently, ApartmentData.com President Bruce McClenny spoke with Community Impact Newspaper about the state of multifamily housing in the Greater Houston area as well as about how the ongoing coronavirus pandemic has affected different aspects of the industry. (Courtesy Pexels)

Recently, ApartmentData.com President Bruce McClenny spoke with Community Impact Newspaper about the state of multifamily housing in the Greater Houston area as well as about how the ongoing coronavirus pandemic has affected different aspects of the industry. (Courtesy Pexels)

ApartmentData.com President Bruce McClenny has served with the company for the past 25 years. The organization, which has been in business since 1986, has a call center based in Houston that works to reach out to every apartment complex in its database on a monthly basis to get updated information on each complex's rental prices, occupancy rates and policies, to provide information that accurately reflects the state of the industry.

Recently, McClenny spoke with Community Impact Newspaper about the state of multifamily housing in the Greater Houston area as well as about how the ongoing coronavirus pandemic has affected different aspects of the industry.

Overall, McClenny said rental prices, occupancy rates and leasing activity is down across the board in the Greater Houston area, which is atypical for this time of year. However, he said he remained hopeful that as the economy continues to reopen and the unemployment rate goes down, leasing activity could pick up later this year during typically slower months.

This interview has been edited for length and clarity.

How has COVID-19 affected the demand for multifamily housing in the Greater Houston area?


Rental activity has slowed dow even though housing is an incredibly important factor in everybody's life—we've got to have housing. So I think single-family and rental housing is going to hold up well because of the needs of individuals to have it, where, on the other hand, retail and commercial office are going to be under a lot of stress on a commercial real estate basis.

How has COVID-19 impacted rental rates across the industry?

The absorption is down. There's less people moving around. They're staying in place. So we're not seeing as many leases happen so because of a lack of demand, people staying at home, in place—that directly impacts rent, so we've seen rents come down, especially in the [Class] A spaces where there's a lot of availability. There's 21,000 [Class A] units across Houston that are in the leasing stage, so that brings pressure on the rents in the A spaces. We're starting to see the Class C—the affordable, workforce housing—rents flatten out.

Is this slowdown typical for this time of year?

This is typically the time when there's a lot of people buying houses and renting apartments. The fast season for leasing, when occupancy goes up and rents rise—that's from February until August. This is a time when things are [usually] at their best in the apartment industry, and then, things slow down from September through January as people try to stay settled for the school year and the holidays.

How is the eviction moratorium affecting landlords?

The property owners are going through the motions to let their tenants know that they're in default of the lease because of nonpayment, and they're having to hold those until the courts open up. But I think there's a very high percentage of residents that are still paying their bills and their rent, and that really doesn't surprise me because of the unemployment that's there now and the benefits that the federal government sent in and are paying that $600 per week, which is equivalent to $15 an hour on top of normal unemployment benefits. So in many cases, people are able to meet their obligations, such as rent, because of that.

Is there a demand for affordable multifamily housing in the Greater Houston area, and if so, is anything being done to meet that demand?

Houston has the most affordable apartments of any major metro at all. If you compare our rents to Dallas or Austin or any other major metro, our rents appear very, very reasonable compared to other markets. But that still doesn't mean that we have enough that's affordable. It's hard to define affordability because it's such [a] very subjective term, ... but there are major companies that are starting to address that [demand] with their development. Alliance Residential is a very large developer in the city and across the country, as [is] Trammel Crow Residential. And those two developers have shifted their focus to a different kind of product that they call 'workforce housing,' which is another term for 'affordable.' So they're doing those in what they call a 'B' location, which is not in the inner loop or the Galleria. ... So there is some response from the development community to try to address that.

Are there specific suburbs in the Greater Houston area where multifamily housing development is happening more than others?

Really, over the last several years, Katy and the outlying areas of The Woodlands and Spring have been leading the city in suburban development in terms of apartments, and I think that has to do with the jobs available and [the] desirable schools that are located there. I think development is just driven by where people want to live and raise their families.

What trends, if any, do you expect will come out of this crisis?

I think renters will be looking for more single-family home styles as opposed to a denser apartment[-style dwelling]. I'm sure there will be adjustments made, design-wise, but it takes so long to design and execute building plans, ... so I think it will be two or three years before we start hearing about architects even starting to make those changes [such as dedicated home office and study spaces in apartments].

How do you foresee the local multifamily housing industry performing for the remainder of 2020?

I think unemployment and job growth will impact how much people can move around and have more choices for themselves to rent and buy. Right now, it's kind of a wait-and-see; there's no way to tell, but things seem to be coming back. We're in the third phase of reopening, and we've had a little bit of a scare, but I think that should have been fully expected—the uptick in cases—because we're getting back out, and we've just got to find the right balance between economic activity and the safety of the health care system.

August is going to be a critical month. As people get back to normal with jobs and to school, some of these things are going to start happening in the season that's typically slow, so I don't know if that's going to be a reversal [of what we typically see]. Just like March and April—they're typically very fast and strong months but were very weak [this year]—maybe we get into August and September, and we've got this demand looming for people needing to make new housing choices. It could very well be just the opposite of what we normally expect.
By Hannah Zedaker
Born and raised in Cypress, Texas, Hannah Zedaker graduated from Sam Houston State University in 2016 with a bachelor's degree in mass communication and a minor in political science. She began as an intern with Community Impact Newspaper in 2015 and was hired upon graduation as a reporter for The Woodlands edition in May 2016. In January 2019, she was promoted to serve as the editor of the Spring/Klein edition where she covers Spring ISD and Harris County Commissioners Court, in addition to business, development and transportation news.


MOST RECENT

Each of the new locations will be available to the public to distribute and receive voter registration forms and applications to vote my mail as well as assisting with other election-related services. (Courtesy Unsplash)
Harris County elections administrator announces 8 new branch office locations

Registering to vote will soon be more convenient for Harris County residents with the opening of eight new branch office locations announced by the Harris County Elections Administrator's Office in a news release May 17.

Imperio Wine & Spirits sells a variety of liquor, beer, wine and spirits. (Courtesy Adobe Stock)
Imperio Wine & Spirits opens in Katy; Montgomery Chick-fil-A to open dining room and more Houston-area news

Read the latest business and community news from the Greater Houston area.

Located near the intersection of Spring Cypress Road and Champion Forest Drive, Memorial Creek Estates comprises 234 single-family homes and is zoned to Klein ISD. (Graphic by Ronald Winters/Community Impact Newspaper)
Check out May's featured neighborhood in Spring, Klein: Memorial Creek Estates, 77379

Located near the intersection of Spring Cypress Road and Champion Forest Drive, Memorial Creek Estates comprises 234 single-family homes and is zoned to Klein ISD.

Six of the Spring and Klein area’s nine ZIP codes experienced a decrease in the number of homes sold in March as compared to March 2020. Meanwhile, ZIP codes 77068, 77070 and 77389 had more homes sold. The median price of homes sold also increased year over year in all Spring- and Klein-area ZIP codes. (Courtesy Adobe Stock)
See how the Spring, Klein real estate market fared in March

Six of the Spring and Klein area’s nine ZIP codes experienced a decrease in the number of homes sold in March as compared to March 2020. Meanwhile, ZIP codes 77068, 77070 and 77389 had more homes sold. The median price of homes sold also increased year over year in all Spring- and Klein-area ZIP codes.

CityPlace at Springwoods Village hosts the PawzUp DogFest on May 22. (Courtesy CityPlace at Springwoods Village)
PawzUp DogFest, Kohrville community fundraiser: 16 things to do in Spring and Klein throughout May, June

Here are a few events and things to do in the Spring and Klein community throughout May and June.

SISD officials announced May 13 that for the 2021-22 school year, the district would be setting aside some pre-K class spots at nearly every elementary campus for students who would not normally qualify for the program under state eligibility requirements. (Courtesy Spring ISD)
Spring ISD expands full-day pre-K access to families ahead of 2021-22 school year

SISD officials announced May 13 that for the 2021-22 school year, the district would be setting aside some pre-K class spots at nearly every elementary campus for students who would not normally qualify for the program under state eligibility requirements.

In addition to constructing a new 43-acre campus, Harris County Emergency Services District No. 11 will be buying a fleet of 40 new ambulances and hiring 150 new staff. (Courtesy Cypress Creek EMS)
Executive director gives preview of ESD 11 Mobile Health Services

In addition to constructing a new 43-acre campus, Harris County Emergency Services District No. 11 will be buying a fleet of 40 new ambulances and hiring 150 new staff.

See how some Greater Houston area school districts are planning to go back to school for the 2021-22 academic year. (Courtesy Adobe Stock)
See how some Greater Houston area school districts are planning to go back to school for the 2021-22 academic year

While some school districts in the Greater Houston area are doing away with face mask requirements and virtual schooling completely, others are pivoting to continue offering online learning options for students and plan to require face masks.

masks
CDC ends all mask requirements for fully vaccinated people

The guidance states fully vaccinated people do not need to wear masks indoors or outdoors.

Houston Scanning digitizes video tapes, printed photographs, film reels and more. (Courtesy Houston Scanning)
Houston Scanning relocates from Willowbrook to Louetta Road in Cypress

Houston Scanning digitizes video tapes, printed photographs, film reels and more.

Single-family home sales were up 47.4% compared to last April with 9,105 units sold versus 6,175 a year earlier. (Courtesy Houston Association of Realtors)
HAR: Houston-area home sales in April up 47% compared to last year

Single-family home sales were up 47.4% compared to April 2020.