Congress has passed a coronavirus stimulus package that will provide relief to millions of low-income renters. The $900 billion stimulus legislation is attached to a $1.4 trillion FY 2021 spending bill that will fund government operations until the end of next September. The spending packages will keep the government open through the year and give low-income renters help right now to keep a roof over their heads.
The stimulus package extends the Centers for Disease Control and Prevention (CDC) national eviction moratorium until January 31. It also provides $25 billion for emergency rental assistance. The package also has employment assistance, another round of direct stimulus checks, and other items that directly impact low-income renters.
Housing Assistance for Low-Income Renters
Most critical for low-income renters, the legislation extends the CDC eviction national moratorium until January 31, 2021. The same rules apply as outlined in the CDC’s guidance published in early October of this year.
To be protected from eviction, tenants must give their landlords a certification that they have lost income because of the coronavirus, will make every effort to pay what they can, and that they will be homeless or doubled up if evicted. Although landlords can start the eviction process, renters can stay in their homes until January 31.
Just as important, the stimulus package includes $25 billion for emergency rental assistance. It will be administered by the Treasury Department, which managed the Coronavirus Relief Fund (CRF). The CRF provided flexible funds to states and cities with more than 200,000 people. Many state and local governments used CRF funds for rental assistance programs, as well as hotel stays for persons experiencing homelessness.
Emergency rental assistance may be used to pay back due rent and utility payments. It can also pay for rent and utilities going forward. Assistance may be received for up to 12 months, with the chance for a three month extension if needed. To be eligible, renters must have incomes 80% or less of the Area Median Income (AMI). Priority is given for extremely low-income renters earning 50% or less of AMI.
At least 90% of the funds must be used to provide financial assistance for renters. The remaining 10% can be used for program administration costs and case management. State and local governments will have an incentive to get the money to renters quickly. Any unused funds after September 30, 2021 will be taken back and redistributed to jurisdictions who have already obligated at least 65% of their rental assistance. The remaining rental assistance must be obligated by December 31, 2021, although a three month extension can be requested.
Landlords can apply for the rental assistance, but they must share the application with tenants for their approval. If a landlord refuses to participate in the program, then the local government has the option of giving the money directly to the tenant to make their payment.
The stimulus package also makes changes to the Low-Income Housing Tax Credit (LIHTC) program that will help produce more affordable apartments for low-income renters. These changes affect how much investment flows into certain types of tax credit developments. It is estimated that these changes in calculating tax credits will create 126,000 more affordable apartments by 2029, on top of the thousands already developed each year by the program.
Stimulus Checks, Unemployment, and Food Assistance
The stimulus bill provides many other benefits that will help low-income renters. It provides $166 billion for another round of direct stimulus checks. The payment will be $600 for each adult and child in a household, about half of what the CARES Act provided last spring. An individual must earn $75,000 or less to get the whole benefit, or $150,000 for married couples. The benefit amount is reduced for incomes from $75,000-$100,000. People with income above $100,000 do not receive a stimulus check.
Treasury Secretary Steven Mnuchin has said that the first checks could go out as soon as two weeks after the stimulus package becomes law. People who have bank account information on file with the IRS will receive their payments soonest by electronic funds transfer. The IRS will mail paper checks to all others, which may take some time.
The stimulus package also has a federal unemployment boost of $300 per week for 11 weeks. This is half the weekly amount unemployed people received under the CARES Act. Like the CARES Act, this legislation extends the unemployment benefits to gig workers. In addition, it provides 13 more weeks of benefits for those who have exhausted their state unemployment.
Congress included $285 billion for the Paycheck Protection Program (PPP). PPP makes forgivable low-interest loans to small businesses. These loans can be used for payroll, and have helped many small businesses keep their employees on and stay open.
The legislation also designates that $12 billion from this pot of money must go to minority owned businesses and very small businesses. These groups were more likely to get locked out of PPP loans last year as banks made loans to larger chains and longtime customers first. It also sets aside $15 billion of these funds for live venues, local theaters and similar community institutions hit hard by social distancing rules.
The pandemic has led to increased food insecurity, with many low-income renters having trouble putting food on the table. As people have lost jobs or had work reduced, more have turned to the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). The stimulus bill will increase SNAP benefits by 15% for six months.
As schools shut down last spring, millions of children who received free or low-cost meals at school faced going without this help. The CARES Act created the Pandemic EBT program to help these students. This provided money to families with school-aged children depending on subsidized school meals. The new stimulus package expands eligibility to all families with children, even if they are under six years old and not in school.
The stimulus package includes $400 million to help food banks and food pantries. It also has $175 million for nutrition services that benefit seniors, such as Meals on Wheels, and $13 million for the Community Supplemental Food Program, which serves over 700,000 seniors each month.
Other Important Stimulus Assistance
The stimulus package also includes a number of other provisions, some of which are not directly linked to addressing the coronavirus pandemic.
The legislation provides funds for vaccine distribution. It allocates $20 billion for free vaccines to people who cannot afford it. In addition, states will share $20 billion to pay for testing and tracing.
College students will receive additional support. The legislation provides funding to support an additional 500,000 recipients. However, the legislation does not extend the suspension of student loan payments past the end of December.
Farmers have been hurt not only by the pandemic, but also by President Trump’s trade wars with China and other countries. Over $30 billion will go to help farmers with loans, grants, and commodity purchases.
The pandemic has shown how important it is to have internet access. Lockdown orders, school closures, and social distancing requirements have made internet access a crucial part of daily life. The stimulus bill has $7 billion to expand broadband access. It also has $3.2 billion more to help low-income families get access to broadband services.
The stimulus package includes funds for transportation needs. It allocates $45 billion for transportation needs. These include funds for airline payrolls, transit systems, state highways, airports, and Amtrak.
A bipartisan measure to end surprise medical billing found its way into the stimulus package. It will limit surprise charges when using emergency rooms outside of your healthcare network. It also provides a 30-day period to negotiate with providers and an arbitration process if negotiations do not work.
Some provisions had nothing to do with tackling the fallout from the pandemic. One provision will make it a felony for companies to provide bootleg movies, shows, and music over streaming services. The move targets websites that knowingly provide illegal copies of materials for streaming, not users who download the movies or music.
Another odd move was bringing back the business meals tax deduction, especially in the midst of a pandemic when so many people are lining up at food banks. It was proposed by the Trump administration, and allows businesses to write off the cost of meals and other expenses related to entertaining clients. Also called the “three martini” deduction, it is a tax break that was once widely abused by businesses.
What Comes Next?
The deal was reached after months of grueling negotiations. Because of that hard work, it passed both chambers of Congress overwhelmingly. However, the day after it passed, President Trump demanded in a video posted on Twitter that Congress amend the stimulus package and increase stimulus checks to $2,000 for individuals and $4,000 for couples.
Trump has been almost entirely absent from the stimulus negotiations, leaving Treasury Secretary Mnuchin to do most of the negotiating for the White House. Although most Democrats, and much of the public, approve the higher amount for stimulus checks, Trump’s last minute demands could threaten the whole package.
Both the Senate and House passed the omnibus spending legislation by veto-proof majorities. Both chambers are ready to come back into after Christmas to override a Trump veto. However, it is unclear how many House Republicans will continue to support the measure if Trump turns it down.
A Trump veto would not only threaten pandemic relief that millions of low-income renters desperately need. If Trump vetoes the measure, the FY 2021 appropriations bills will also fail. This means we could face a government shutdown when the current Continuing Resolution that pays for government operations expires on December 28.
The legislation has not yet reached Trump’s desk, as it takes a long time to prepare a bill of this size for signature. If it does not get to him by Thursday, he can exercise a “pocket veto” to kill the bill. He could also let the full 10 days he has to sign the bill tick off before the new session of Congress begins on January 3.
Although larger stimulus checks will absolutely help low-income renters during this crisis, Trump’s moves put all the pandemic relief at risk. Low-income renters are facing the end of jobless benefits and an eviction moratorium. Leaving millions of desperate Americans at risk of losing their homes is not acceptable.