Real Estate Relief in the American Rescue Plan Act of 2021
On March 11, 2021, President Joe Biden signed H.R. 1319, the American Rescue Plan Act of 2021, into law. The $1.9 trillion COVID-19 relief bill, which passed in the U.S. Senate by a narrow 50-49 vote on March 6 and in the U.S. House of Representatives by a 220-211 vote on March 10, signifies the Biden Administration's first legislative achievement with the Democratic majority in Congress to expand federal assistance to renters, homeowners, restaurants and small business owners, among others.
The legislation provides $40 billion of rental and mortgage assistance, which includes $21.55 billion for emergency rental assistance, $5 billion for emergency housing vouchers, $750 million for tribal housing needs and $100 million for rural housing. The Act is the first stimulus package to include direct aid to state, local and tribal governments, designating $350 billion to alleviate pandemic-induced budget deficits. Of the $195.3 billion allocated to states, $500 million of aid will be distributed to each state and the District of Columbia, and $168.55 billion will be distributed based upon each state's share of total unemployed workers from October 2020 to December 2020. Moreover, $10 billion has been set aside for an infrastructure program to assist local governments with capital projects.
For businesses, the legislation has added $7.25 billion to the Paycheck Protection Program (PPP), which has already disbursed $662 billion in forgivable loans to help businesses keep their workforce employed during the pandemic, though the PPP is set to expire on March 31. With the $28.6 billion appropriation to the Restaurant Revitalization Fund, also administered by the Small Business Administration (SBA), eligible restaurants will receive aid in the form of grants up to $10 million for restaurant groups and $5 million for individual eateries. In addition, restaurant and small business owners are eligible for long-term, low-interest rate loans through a $15 billion Emergency Injury Disaster Loan (EIDL) program.
While landlords have remained among the groups most adversely affected by the pandemic, they will not receive direct aid from the Act. However, direct federal rental assistance will eventually trickle down to landlords, as will restaurant assistance to landlords of mixed-use properties. Landlords will also find relief through unemployment benefits and the long-awaited $1,400 stimulus payments Americans may use to pay for necessities such as rent. The legislation extends major unemployment insurance programs created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, such as the Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC) and Federal Pandemic Unemployment Compensation (FPUC) programs, all of which were set to expire on March 14 but have now been extended through Sept. 6.
The American Rescue Plan Act also provides $5 billion to help those experiencing homelessness and $510 million for the Federal Emergency Management (FEMA) Emergency Food and Shelter Program (EFSP), which supports homeless services providers. However, the legislation does not address the federal eviction moratorium in place until March 31. As with previous COVID-19 relief bills, the U.S. Department of the Treasury is expected to communicate guidance and provide a timeline regarding the distribution of funds under the Act.
For an in-depth review of other portions of the bill, see Holland & Knight's previous alert, "American Rescue Plan Act of 2021: Summary," March 10, 2021.
DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the authors of this alert for timely advice.