Forecasting Eviction Based on COVID-19 Data

Dallas proptech startup Spatial Laser is using AI to help identify where rental income disruption and eviction may hit hardest due to the Coronavirus pandemic

by Steven McCord, CEO of Spatial Laser in Medium on March 19, 2020

As the week progresses, a growing number of people are staying home to avoid exposure to the COVID-19 coronavirus. With a sudden drop off in customers, some types of businesses have suffered immediate effects.

Restaurants and hospitality are among the hardest hit; as customers stay home and as restaurants are ordered shut, the need for waitstaff, cooks, and support staff has dropped quickly. Layoffs are already taking effect.

Restaurant industry renters

Many workers in the restaurant industry are hourly workers who already constitute a vulnerable population. They are also often renters. As financial stress mounts, some renters will face difficulty paying rent in the coming months. Already, we are seeing policies put in place to slow evictions for certain types of property. For landlords who own rental properties in Dallas-Fort Worth, we decided to analyze which areas may experience the greatest short-term risk for tenancy churn and cashflow disruption.

We expect these areas to be hardest hit and face the highest possibility of eviction-related disruption.

The map below shows the hot spots across the Dallas Fort-Worth Metroplex which have a combination of a) a high concentration of restaurant and hospitality workers b) a large number of renters and c) low to moderate incomes. Several hot spots emerge where we expect layoffs in the restaurant industry to result in elevated risk of cashflow disruption or rising tenant churn.

We expect these areas to be hardest hit and face the highest possibility of eviction-related disruption.

Source: Bureau of Labor Statistics data, American Community Survey, Spatial Laser Analysis by Shaofei Chen and Steven McCord
Source: Bureau of Labor Statistics data, American Community Survey, Spatial Laser Analysis by Shaofei Chen and Steven McCord

Healthcare — offering resilience

Meanwhile, healthcare workers are widely regarded as enjoying some of the best job security available. Economic cycles do not change the demand for health care — the demand is always there, and it is a basic need. Healthcare workers are working around the clock to battle the COVID-19 outbreak. We identified areas that have a combination of a) high concentrations of health care workers b) a high percentages of renters, and c) low to moderate incomes. Many of these areas are around major hospitals. We can expect landlords who own in these areas to be in a strong position with minimal disruption to cashflow or tenant churn.

Source: Bureau of Labor Statistics data, American Community Survey, Spatial Laser Analysis by Shaofei Chen and Steven McCord
Source: Bureau of Labor Statistics data, American Community Survey, Spatial Laser Analysis by Shaofei Chen and Steven McCord

About Spatial laser

We are building a software-as-a-service offering to help real estate investors discover where to buy rental properties, down to the exact block and individual opportunity. We use machine learning to model investment returns, risk, and market conditions at the hyper-local level using proprietary ranking and scoring. We display this visually in a colorful map-driven system. Investors get recommendations they can act upon immediately.

As we build our product we are looking for early adopters and test users. Please feel free to reach out at www.spatiallaser.com