How does the December COVID-19 stimulus package impact landlords?
Last month, Congress voted for a second COVID-19 relief package, which President Trump signed into law on December 27. As a continuation of the CARES Act of March 2020, the stimulus seeks to offer financial assistance to Americans affected by the COVID-19 crisis, making available no less than $900 billion for unemployment benefits, vaccine development and distribution, schools, and direct financial assistance.
What are the housing provisions of the new relief package?
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The new COVID-19 stimulus package provides $25 billion in rental assistance for tenants whose income has been affected by the pandemic. In parallel, the CDC (Center for Disease Control and Prevention) also extended the eviction moratorium into 2021. Initially set to expire at the end of 2020, the eviction moratorium is now extended through January 31, but many expect that it will be further extended into the coming months.
Is there any help for landlords in the new stimulus package?
Yes, there is! The new regulations state that the landlord and the utility provider can get paid directly when the tenant applies for rental assistance, which can ensure the rent is paid on time even if the tenant has financial difficulties. The landlord is also authorized to apply for rental assistance on behalf of tenants, but they must obtain their consent first. Grantees will use the funds provided to them to pay for rent and rental arrears and utilities, and home energy costs arrears.
HomeVault has also been affected by the eviction moratoria introduced since March 2020. Landlords have borne the brunt of these restrictions and were looking to the government for some form of financial relief. They welcome the opportunity brought by the latest stimulus package. Our CEO, Shawn Johnson, echoes this sigh of relief coming from the industry: “As a country, we stumbled as to how best to give the assistance that mattered most. After some months, landlords are finally getting the assistance they need. I had hoped landlords would have been a higher priority when COVID-19 first began but I am glad they are finally getting the help needed.”
The possibility of getting a direct payment from federal funds will no doubt help landlords to put up with the extension of the eviction moratorium to January 31, but is this a truly lasting solution? Probably not. We will have to wait and see how the legislation will keep regulating the COVID-19 crisis. We all want to get back to normal, with rents expected to be paid on time, but at this point, with the pandemic still raging, these new regulations make it at least easier for landlords to collect rent. For the moment, this may be the closest we can come to normality.
Credits: Photo by Afif Kusuma on Unsplash.
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