As we head into a summer unlike any we have ever experienced, there is reason for hope and reason for concern. With infection numbers down, states and cities are haltingly opening the doors to more and more businesses, beginning the important work of restarting our economy. At the same time, states that have reopened too quickly have seen a quick uptick in infections and hospitalizations.
As this push and pull plays out over the next few months, it will almost certainly impact housing and housing providers. While most media coverage has focused on tenants, some are beginning to realize that those in the rental housing industry are also being hit hard by the economic downturn brought on by shelter-in-place laws.
Read on to find out what kind of support renters and owners can expect if—and that’s a big if—the House’s HEROES Act makes it through the Senate.
HEROES Act Includes $175 Billion in Renter and Homeowner Assistance
In mid-May, the U.S. House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solution—or HEROES—Act with a vote of 208 to 199. That narrow majority is an indication of how difficult it may be to get the $3-trillion package through the Senate, where Republican lawmakers have indicated that a fourth stimulus bill, if passed, could look substantially different from the one passed by the House.
But should a stimulus bill that is similar to the HEROES Act pass, it would mean a possible $100 billion in rental assistance and $75 billion for homeowners who need help covering mortgage payments, property taxes, and more.
The biggest housing-related component of the bill is the Emergency Rental Assistance Act and Rental Market Stabilization Act. Under this program, $100 billion would be provided for short- and medium-term rental assistance as well as related costs like utility payments and security deposits. At least 70 percent of the funds must be used by those earning less than 50 percent of the Area Median Income, and the vast majority of the remainder would be available to those making up to 80 percent of the AMI. The HEROES Act also includes a 12-month moratorium on virtually all non-payment evictions.
There are resources for struggling homeowners in the bill as well. If passed, homeowners will also be able to request a 120-day extension on delinquent mortgage payments, which can be extended up to nearly a year if the owner is experiencing financial hardship. Furthermore, the act creates a $75-billion Homeowner Assistance Fund to provide owners with help covering everything from mortgage payments to property taxes and utilities. At least 60 percent of the funding will go to homeowners earning below 80 percent of AMI and states that have seen a higher number of unemployment claims would receive a higher proportion of the funding.