No More Housing For The Unvaccinated

Oct 14, 2021

Are we facing an end to housing for the unvaccinated?

One large landlord in Florida has already set a new precedent regarding vaccination status and access to housing. Will it be the end of housing for the unvaccinated? Or is this just the beginning of new diverging opportunities for investors to offer more value, for greater returns. 

This is obviously a very sensitive and controversial topic, with strong emotions on both sides. The purpose of this report is not to debate the science or offend anyone’s beliefs, but rather to understand the impacts of this situation on the property and debt markets, as well as for investors.

Vaccination Status As A Reason For Eviction

A large landlord in Florida has already begun notifying their tenants that they will begin evicting them if they have not been vaccinated. 

This probably isn’t legal yet. At least in the Sunshine State. And because of the fact that these conditions weren’t in the original lease. Renters may find little legal support to protect them in other states though. There are always loopholes too. 

The most obvious reason for this landlord to be taking this route is to circumvent recent eviction bans. It is easy to understand their frustration, as well as the need to regain control of their assets. They need to live up to their own financial responsibilities, optimize performance and property value. They don’t want rental rates left behind in an environment where they have been soaring anywhere between 20% to over 70% in places like NYC. 

More Division Is Coming

Trends suggest that even more division is coming. The USA is quickly becoming the Divided States of America. Especially when it comes to stances on vaccinations. 

With vaccinations seeming to have hit a ceiling at around 50% of the population, and a lot of emotion around this topic, more changes are likely. 

The White House website makes it clear that the president is serious about mounting the pressure to increase vaccination levels, even if that takes more regulations to force it. Alternative actions like the recent limitation on and seizure of treatments for some states may put too much pressure on people to hold out. 

We’ve already seen this in student housing. Now you virtually cannot have a job or go to school, or in many cases eat out without a vaccine passport.

It is easy to see how this could quickly expand to vaccine passports being required to enter government subsidized housing (think Section 8), or perhaps on the extreme side, to obtain a federally backed Fannie Mae, VA or USDA mortgage loan. If we’ve learned anything over the past two years it is that anything is possible. It will likely become the norm for any type of senior housing and care homes. 

Three New Niches Emerging For Investors

Right now there appear to be three clear niches diverging. The vaccinated, the unvaccinated, and the elite who are exempt from the rules (celebrities, billionaires, and politicians). 

Those passionate about being vaccinated could well prefer to be in communities, and especially apartment and condo buildings only with other vaccinated people. Not that this division is a good thing for us, but it's happening. 

The unvaccinated may be increasingly limited on choices of housing and living. Renting may not be an option for many. Even where it is, if they can’t eat out, get on public transport, or enjoy any entertainment, then life isn’t going to be much fun. So, they may migrate to communities which are anti-mask, and ban vaccine passports. So, this niche is not just about housing, but shopping, dining, and activity spaces too. 

The elite may trend more towards areas that offer more travel options. Such as around private marinas, private airports, etc. 

Investors, lenders and landlords participating in this space have a lot to gain by serving up what each of these niches want. Instead of penalizing and banning people who don’t agree, it may also be wiser to offer incentive based pricing. If landlords really feel everyone in their units should be vaccinated, they could offer a discount on lease renewals for those with proof of vaccination. Or there could be a risk based fee for extra sanitization needs for those who choose not to get vaccines. 

Division is not healthy. There is a way to accommodate and respect everyone though, as well as opportunities to offer more value catering to these housing choices. 

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund