On Thursday, March 11th, President Biden signed “The American Rescue Plan Act,” or the COVID-19 Stimulus Package, into law. This week, Americans began to see $1,400 stimulus checks appear in their bank accounts. While no piece of legislation is perfect, the American Rescue Plan Act provides pockets of stimulus that should be helpful to the commercial real estate industry, including the following highlights:
- Multifamily Housing
- Emergency Rental Assistance: $21.55 billion, plus $125 million for rental assistance in rural areas
- Housing Vouchers: $5 billion
- Housing Counseling: $100 million
- Individual Assistance
- Unemployment Insurance: $300 per week through September 6, 2021
- Direct Checks: Up to $1400 for qualified individuals
- Commercial Business Assistance
- Restaurants: $25 billion grant program to be administered by the Small Business Administration
- Shuttered Venues: $1.25 billion for shuttered venues such as theaters and arenas
- State and Local Funding: $195.3 of the $219.8 billion for state and local relief can be used to “respond to the public health emergency with respect to the Coronavirus Disease or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality…”
To see the full list of provisions that pertain to commercial real estate, please see MBA’s bill summary here.
Importantly, what’s next as it comes to implementation? All eyes will likely be on four agencies, as well as many state governments:
- The Small Business Administration (SBA): The SBA is in charge of administering the $25 billion restaurant grant program. While the SBA has years of experience in administering grants to small businesses, the restaurant grant program is a new program. Furthermore, the SBA will have to work through the following limitations. Grants can be provided of up to $5 million per restaurant or up to $10 million per entity. Roughly 20% of the fund is earmarked for smaller restaurants with sales below $500,000. Also, the SBA must prioritize grants to small businesses owned by women, veterans, or socially and economically disadvantaged small business concerns.
- Department of Treasury: The department of Treasury will be responsible for administering emergency rental assistance to the states. Treasury has a process in place that was used during the last stimulus bill in December. The question will be how long it takes to administer the monies to the states, and then how long it takes the states to get it into the hands of eligible renters.
- The Centers for Disease Control (CDC): Why the CDC? The CDC is the administrator for the federal eviction moratorium that is currently set to expire on March 31, 2021. In all likelihood, the CDC – or other federal body – will extend and modify the eviction moratorium. We assume that the current administration would like to see renters receive the rental assistance before letting an eviction moratorium expire. The question will be, how long will it be extended, and how will it be changed?
- The Consumer Financial Protection Bureau (CFPB): The CFPB recently released a report that discusses the apartment market, eviction moratoria, and the ability of renters to make their monthly rental payments. Such a report suggests that the CFPB will be keeping a keen eye on renters and the multifamily rental marketplace. The question is, how far does the CFPB’s jurisdiction extend?
- State Governments: State governments are about to receive a $220 billion influx of cash from the federal government. How will they use the funds? Will they use the funds to repair deficits? Help the renters and the hospitality industry? Fix power grids? Such decisions will be important to our industry, and we will be pressing state governments to use the funds as intended and help renters, small businesses, and the hospitality industry.
Original Story HERE