The American Rescue Plan: Key Provisions for Real Estate
By: Ron Altman
The ARP allocates $26 billion for emergency rental assistance and $10 billion for homeowner assistance, this to assist almost 9 million renters and 2 million homeowners who are significantly behind in their lease or mortgage payments. Tenants who qualify for unemployment benefits, have experienced financial hardship due to COVID-19, are at risk for experiencing homelessness or housing instability or have a household income below 80% of the area median income should be eligible for these funds. Money can be applied to back or future rent and utility bills and for a period of up to 15 months.
The above allocation is in addition to the $25 billion in emergency rental assistance provided by the relief bill passed by Congress in December 2020. Distributions will be handled by state and local governments. $100 million is also being allocated to expand access to housing counseling and assistance services for the millions of renter and homeowners who are struggling to remain in their homes.
In the latest coronavirus stimulus package making its way through Congress, there’s no extension of the national ban on evictions that is set to expire this month. While the ARP does not extend protections by the federal government, state and local moratoria remain in effect in many jurisdictions across the country and could provide protection. However, in jurisdictions that do have moratoriums in place, Americans could be at risk of losing their homes as the Covid-19 pandemic continues.
President Joe Biden had called on Congress to keep the eviction moratorium in effect through September. However, because Democrats passed the legislation through a process called budget reconciliation, they cannot include the eviction ban in the relief bill.
The ARP also authorizes the SBA to administer $28.6 billion to restaurants through a “Restaurant Revitalization Fund”. To qualify for funds, a restaurant must certify as to the uncertainty of its ability to operate in light of current economic conditions. Restaurants that are state or local government operated businesses, own or operate more than 20 locations as of March 13, 2020, have a pending application for or have received a grant under an SBA shuttered venues grant program, or are publicly traded, will not be eligible for funds.
Indirectly, the ARP provides for $350 billion in state and local aid that can be expected to provide indirect support to the real estate industry since these funds should be available to businesses that have been affected by COVID-19. The continuation of paycheck protection, EIDL and other programs will also indirectly benefit the real estate markets although when it comes to real estate specifically, the direct focus of the legislation is in the areas of keeping renters and homeowners in their homes through the allocated funds.
Please be sure to check out our COVID-19 Client Alert and Resource Center, https://www.raineslaw.com/covid-19, for further information about the American Rescue Plan as it becomes available.
If you have any questions or concerns about any of the information briefly summarized in this Business Bulletin or require any further information, please contact:
+1 (424) 239-2512
+1 (310) 734-0401