It appears as though a second pandemic stimulus bill has garnered bipartisan support and the president will likely sign it in the coming days. Although discussions are ongoing over the apparent deal, a vote on the bill could likely come this week. While the massive bill offers help to a number of people and businesses harmed by the pandemic, a few passages apply to the real estate industry. At the top of the list is rental assistance. While the bill extends a ban on evictions until Jan. 31, 2021, it also includes a compensation component for landlords forced to retain non-paying tenants.
One of the key areas that was overlooked in the first stimulus bill was assistance for landlords that were left “holding the bag”. While there was a moratorium on evictions to assist tenants that were unable to pay rents, the landlords of these properties had no relief in sight. This was particularly devastating to the mom-and-pop property owners in danger of going into financial ruin through no fault of their own. In addition to rent relief, the bill provides an additional $284 billion for Paycheck Protection Program (PPP) loans and $20 billion for Economic Injury Disaster Loans (EIDL) grants.
Attributes of the stimulus bills
- Stimulus payments: Most Americans would receive a direct payment of $600.
- Unemployment assistance: It extends all unemployment assistance, including the Pandemic Unemployment Assistance (PUA), through April 19, 2021, with a $300 weekly boost in payments through March 14, 2021. According to the National Association of Realtors (NAR), those unemployment benefits continue to be extended to self-employed workers.
- Rental assistance: The bill “provides $25 billion to the states through Sept. 30, 2022, for rental assistance, and allows landlords to apply for funds on behalf of tenants,” NAR says. In addition to past-due rent, the payments in arrears includes utilities and other expenses related to housing
- Evictions: The ban on evictions would be extended to Jan. 31, 2021
- Broadband: The states will receive $7 billion to expand internet broadband, which includes $300 million slated for rural areas.
- Other funding: The bill funds a number of other industries and individuals hurt by the pandemic and economic recession, including new money for schools and funding for vaccine distribution.
Although some lawmakers are concerned with a lot of unnecessary spending being included in this second round stimulus bill, there is no arguing that many Americans are still dealing with the financial devastation due to the pandemic. With regards to real estate, there are certainly some important additions to this round of stimulus that were lacking in the first round. As mentioned previously, this has been a particularly difficult year for landlords as they navigated the challenges of losing revenues while still being responsible for property costs such as mortgages, insurance, & maintenance. In closing, a second stimulus bill has been eagerly awaited by Americans for some time now. Hopefully with two approved vaccines on the market so far, there is a glimpse of a light at the end of the tunnel.