Category: Coronavirus Response

A $25 multi-billion residential rental assistance program launched on Jan. 5 by the Treasury Department will use funds from the year-end $900 billon coronavirus relief package signed into law by President Trump on Dec. 27. (Roundtable Weekly, Dec. 22)

• Treasury Secretary Steven Mnuchin said, “The Emergency Rental Assistance Program will help to keep American families in their homes during this challenging time. Treasury is implementing this program with unparalleled speed so our state, local, and tribal partners across the country can provide assistance to families in need.”  (Treasury news release, Jan. 7, 2021)

• States, U.S. Territories, tribal and local governments covering more than 200,000 people are now able to enroll in the ERAP through a web portal by providing payment information and accepting award terms. Households or landlords that qualify can apply through the enrolled programs that receive funding from Treasury.

• Qualifying households include at least one person who is eligible for unemployment insurance or suffered a coronavirus-related financial hardship; is at risk of homelessness or housing instablity; and has a household income at or below 80 percent of “the area median.”

• A federal rental assistance program—advocated by The Real Estate Roundtable since April 2020—comes as the National Multi-Housing Council reports that 76.6 % of apartment households paid rent as of January 6. (NMHC Rent Tracker)

• The Roundtable last year called for the establishment of a rental assistance fund for impacted residential and business tenants. Calling it the “rental obligation chain,” The Roundtable emphasized that rent payments support owner payrolls, utility, taxes and debt service and further benefit capital providers and local governments. (Bisnow, April 30, 2020 interview with Roundtable President and CEO Jeff DeBoer and Roundtable Weekly,  Sept. 11, 2020 on MSLP testimony)

• The enacted year-end omnibus bill took a partial step by establishing a $25 billion fund only for impacted residential tenants, although The Roundtable continues to support a similar, if not greater, fund for small business tenants.

• The bill also extended the Centers for Disease Control and Prevention (CDC) current federal eviction moratorium one month (through Jan 31, 2021).

The Hill reported that “housing experts, advocates and economists have called on the federal government to provide sufficient rental assistance to protect tens of millions of Americans from eviction when the CDC ban expires.”  (Jan. 7, 2021 and Oct. 11, 2020)

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Congressional leaders will work through the weekend in an effort to reach agreement on an omnibus bill that would attach approximately $900 billion in coronavirus relief to a $1.4 trillion bill to fund the government until Oct. 1, 2021 – the final piece of legislation in the lame-duck session. Another short-term stopgap measure needs to be passed before midnight tonight to extend current funding, prevent a partial government shutdown and allow more time for Congress to complete the omnibus negotiations. (BGov, Dec. 18 and Deloitte Tax News and Views, Dec. 18)

• Republicans and Democrats have inched toward a deal on a coronavirus relief package this week that currently includes $600 in direct payments for individuals, $300 for enhanced weekly unemployment benefits, aid to small businesses, distribution of the Covid-19 vaccine and other measures. (Wall Street Journal, Dec. 18 and Roundtable Weekly, Dec. 11)
• A bipartisan group of US Senators on Dec. 14 released text of the Bipartisan Emergency COVID Relief Act of 2020, which is under negotiation by House, Senate and White House policymakers – see section-by-section summary and draft text of the bill.
• The Act includes $25 billion for residential rental assistance, augmented unemployment insurance benefits, a scaled-down Paycheck Protection Program (PPP) – as well as money for vaccine development, supply, and testing and tracing programs.

• The bill also provides for emergency rental assistance, which may soften the impact of the Centers for Disease Control (CDC) moratorium that expires Dec. 31.The Act would also extend the moratorium through Jan. 31, 2021. Landlords/owners could assist or apply for rental assistance on behalf of renters.
• Politico reported this week that state and local funding and a business liability shield would be excluded from the final bill, although talks remain in flux. (Politico, Dec. 16) 
• Extended troubled debt restructuring (TDR) relief is also currently not included in the package. (Roundtable Weekly, Nov. 13) 
• Senate Majority Leader Mitch McConnell (R-KT) said today, “I am even more optimistic now than I was last night that a bipartisan, bicameral framework for a major rescue package is close at hand.  Like I’ve said, the Senate will be right here until an agreement is passed, whenever that may be.” (NBC News, Dec. 18) 
• Disagreements continue among policymakers about the Fed’s emergency lending programs, stimulus check eligibility and the use of disaster relief funds. (Politico, Dec. 17 and CQ, Dec. 18) 

The Roundtable and 12 national real estate organizations this week sent President-elect Joe Biden and Vice President-elect Kamala Harris several policy options for COVID-19 relief, as well as recommendations aimed at long-term challenges – see story below for details. 

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Current negotiations on a pandemic relief bill remain at a standstill until the results of next week’s elections, which will impact the contours of a potential deal in a “lame-duck” Congress that must also pass funding legislation by Dec. 11 to avoid a partial government shutdown.

• The key players in the relief negotiations– House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin – both expressed frustration this week about the deadlock over policy differences for a COVID-19 stimulus deal.

• Pelosi detailed seven policy issues where significant disagreements remain in an Oct. 29 letter to Mnuchin – including funding for state and local governments; OSHA and worker liability protections; and unemployment insurance and tax credits for working families. Mnuchin responded with his own letter yesterday, saying the state of negotiations described by Pelosi were inaccurate. (BGov, Oct. 30)

• Pelosi also told the Wall Street Journal this week, “What [Mr. Mnuchin] and I have agreed upon—on how we would go forward—is not necessarily what the Republican Senate will vote on. That is up to the president to convince them that the agreement we have with him is one that will be honored by them.” (WSJ, Oct 28)

Post-Election Lame-Duck Session

President Trump yesterday said, “Once we get past the election, we’re going to get it (pandemic stimulus). It may be bipartisan, it may not have to be… Right after the election, we’ll get it one way or the other.” (Jon Taffer podcast, Oct. 29)

• Trump also said his administration expects negotiations to continue, saying, “After the election we’ll get the best stimulus package you’ve ever seen …” (The Hill, Oct. 27 and CQ, Oct. 29)

• The cost of a potential package is another major impediment in the negotiations, with the Trump administration considering a ceiling of $1.9 trillion and the Democrats holding at $2.4 trillion.  ( Roundtable Weekly, Oct. 23)

• Senate Whip John Thune (R-SD), who is number 2 in the chamber’s leadership, said on Oct. 25 that if Democrats win on Nov. 3, a smaller stimulus bill could be pursued in the lame-duck session, followed by another package in the new year. (BGov, Oct 27)

• House Ways and Means Ranking Member Kevin Brady (R-TX) added this week  he was open to finalizing a “smart Covid package” during the upcoming lame-duck session, commenting he aims to provide certainty for more than 30 tax extenders scheduled to expire at the end of 2020. “We’ve already reached out and are having discussions with (House Ways and Means) Chairman Neal and Democratic leaders on how we might resolve some of those temporary health and tax provisions,” Brady said. (BGov, Oct. 30)

With government funding set to expire on Dec. 11 and many temporary financial safety net programs expiring on Dec. 31, lawmakers could merge some COVID-19 aid measures into a sweeping multi-trillion-dollar omnibus bill to avoid a partial shutdown.  (Marketwatch, Oct 21, Washington Post, Oct. 23 and RollCall, Oct. 28)

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Policymakers signaled this week that pandemic relief negotiations remain at an impasse over federal aid to state and local governments and liability protection for employers – adding uncertainty to prospects for a deal before the election and diminishing chances for a legislative package before Nov. 3. 

• House Speaker Nancy Pelosi (D-CA) yesterday said, “If we can resolve some of these things in the next few days, it will take a while to write the bill. We wouldn’t take less of a bill to get it sooner.” (CQ, Oct. 23)
• President Trump today said Pelosi is delaying progress on a deal until after the election. “She wants to bail out poorly run Democrat states and that’s a problem … we don’t want to reward areas of our country who have not done a good job,” Trump said at the White House. (BGov, Oct. 23)
• Treasury Secretary Mnuchin added today, “We’ve offered compromises. The speaker, on a number of issues, is still dug in. If she wants to compromise, there will be a deal.”
• Pelosi said this morning on MSNBC that President Trump needs to convince reluctant Senate Republicans to support a possible deal with the White House. “The fact is that the president has been back and forth. But he has to talk to the Senate Republicans.” (Washington Post, Oct. 23)
• The stalemate reflects a lack of legislative agreement in Congress on the cost of a COVID-19 stimulus package.” (CQ and BGov, Oct.23)
• Senate Democrats this week voted 51-44 against a “skinny” relief bill of $500 million proposed by GOP lawmakers to fund the Paycheck Protection Program and additional unemployment relief.  That measures stands in contrast to a $2.2 trillion pandemic stimulus bill passed by the House of Representatives on Oct. 1 that is a scaled-down version of the $3.4 trillion HEROES Act passed by the House in May.  (Roundtable Weekly, Oct. 16)
• Senate Appropriations Committee Chairman Richard Shelby (R-AL) said yesterday he has doubts a stimulus package could be agreed to soon. “I think it’s about two minutes to midnight, and we’re not going to pass anything until we see the particulars. There could always be a miracle, but there’s not many around here.”
• It is possible that some COVID-19 aid measures could be added to must-pass legislation after the election during the “lame-duck” congressional session, when lawmakers will face a Dec. 11 government funding deadline or risk a shutdown. (Washington Post, Oct. 23)

Action on a comprehensive pandemic relief package may wait until early January after the elections – even though many temporary financial safety net programs are set to expire Dec. 31. (Marketwatch, Oct 21)

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Recommendations on how to encourage a national recovery from the economic effects of the pandemic – and improve access to Federal Reserve credit facilities for businesses such as manufacturing, retail, restaurants, real estate owners, and other asset-based borrowers – was the focus of testimony by Roundtable President & CEO Jeffrey DeBoer (above) on Sept. 9 before the Senate Banking, Housing and Urban Affairs Committee. (International Council of Shopping Centers news release)

The Roundtable’s written statement and oral presentation also provided the commercial real estate industry’s shared recommendations on how to provide critical federal assistance to the U.S. workforce, renter households, and business tenants to help them weather the COVID-19 crisis.  (Hearing video and witness statements)

• The Senate hearing focused on the effectiveness of the Federal Reserve’s Main Street Lending Program (MSLP) – a $600 billion loan facility established in March as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to assist small and mid-sized businesses weather the economic fallout from the pandemic.  (CQ News, Sept. 9)

• Chairman Mike Crapo (R-ID), Ranking Member Sherrod Brown (D-OH) and other Banking Committee Members heard testimony from DeBoer; Hal Scott, President of the Committee on Capital Markets Regulation; and William Spriggs, Professor of Economics, Howard University and Chief Economist, AFL-CIO. (Witnesses written testimony)

• Chairman Crapo (photo below) noted in his opening statement that the hearing would provide an update on “why the (commercial real estate) CRE market lacks access to needed support, including through the Main Street Program; and recommendations for options to get support to commercial real estate.”  (Sen. Crapo’s Opening Statement, Sept. 9)

• DeBoer emphasized the goal of the MSLP is to provide capital to mid-sized businesses that are disproportionally owned by minorities, women and veterans, who are unable to obtain capital due to COVID-related economic problems. (Law360, Sept. 9)

• The Main Street program is not working, DeBoer testified, because there is little incentive for banks to make the loans – and the program’s eligibility, affiliation and underwriting rules are not designed to meet the needs of the businesses in need.

• “The result: countless mid-sized retail businesses, restaurants, hotels, commercial and multifamily building owners are moving closer to shutting their doors forever,” DeBoer stated. (Roundtable Oral Comments)

• DeBoer recommended that to incentivize banks to participate on a larger scale, the Fed should purchase 100 percent of a Main Street loan, instead of the current 95% limit.

• He also encouraged administrative actions to expand the MSLP’s eligibility rules “… to stabilize the weakening condition of many businesses, particularly real estate owners whose businesses support millions of jobs nationwide and whose health is directly related to the health of local communities.”  (Washington Post, Sept. 9)

• “The recommendations that I have made on the Main Street Lending Program … really require no additional funds from the federal government,” DeBoer said. “They are administrative. They could be done tomorrow by the Treasury and the Fed if they wanted to.” 
• Sen. Chris Van Hollen (D-MD) commented, “I wish there was a broader recognition that getting funds into the hands tenants to pay their landlord on the residential side and also on the commercial side is something that would be very important at this time.”  (American Banker, Sept. 9)

• During Q&A with several committee members, DeBoer also addressed the importance of preserving the “rent obligation chain” – the stream of tenant rent revenues that travel through the financial system to support business workers, local government services and mortgage markets, safeguarding billions in Americans’ pension and retirement savings invested in real estate assets.  (Video of DeBoer’s Testimony and Q&A with Senators)

• Committee Chairman Crapo on July 31 sent a letter to Secretary Mnuchin and Chairman Powell urging them to quickly expand the Main Street Program by setting up an asset-based lending facility, and to address commercial real estate either through access to the Main Street Program or in a separate facility.”  (Roundtable Weekly, August 14)

DeBoer’s testimony, the Fed’s efforts and prospects for congressional action regarding the economic repercussions of the coronavirus will be a focus of discussion during The Roundtable’s September 22 Virtual Fall Meeting.  (Video of DeBoer’s Testimony and Q&A with Senators)

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President Donald Trump signed four executive orders (EOs) on August 8 that seek to counter the negative economic repercussions of the pandemic by preventing residential evictions and foreclosures; providing additional unemployment payments; and deferring the collection of payroll taxes and student-loan payments.

• The EOs were signed after White House officials and Democratic leadership could not agree on a fourth comprehensive coronavirus aid package. (Roundtable Weekly, Aug. 7) Republicans and Democrats urged each other this week to continue negotiations. (Wall Street Journal, Aug 10.)

• Whether the president has the authority to issue some of these Executive Orders is questionable, since taxing and spending power is generally under the purview of Congress. (NPR, Aug. 8) President Trump’s four executive orders include: 

Assistance to Renters and Homeowners

This order calls upon several federal agency heads to take steps within their existing authorities and programs to minimize evictions and foreclosures. These efforts would apply only to federally originated, backed, or securitized mortgages.

• The order does not purport to reauthorize the CARES Act federal eviction moratorium that expired at the end of July.  (Wall Street Journal, July 16)
• The EO instructs the Secretary of the Treasury, the Secretary of Housing and Urban Development (HUD) and the Director of the Federal Housing Finance Agency (FHFA) to take all lawful measures to prevent evictions and foreclosures of residential tenants and owners who have been financially impacted by the pandemic.  
• The HUD Secretary is also instructed to encourage and provide assistance to landlords, public housing authorities, federal grant recipients and affordable housing owners to minimize evictions and foreclosures. 
• Roundtable President and CEO Jeffrey DeBoer commented on federal rental assistance efforts: “Seeking to optimize existing programs and resources to minimize evictions and foreclosures makes sense.  For example, the existing Section 8 housing choice voucher program successfully provides housing assistance to lower income tenants.”
• DeBoer continued, “However, millions of additional families have pre-qualified for rental assistance yet are on stand-by wait lists for Section 8 housing vouchers and therefore do not receive the assistance for which they qualify. HUD should work quickly to reduce what are, in many cases, multi-year Section 8 housing assistance wait times.” 
• The residential relief EO complements a series of FHFA guidance for lenders and servicers since the start of the pandemic, collected on the agency’s  “COVID-19 Information and Resources” website.  For example, FHFA announced on August 6 that multifamily owners with mortgages backed by Fannie Mae or Freddie Mac who enter into forbearance agreements must inform tenants in writing about eviction protections.

• FHFA Director Mark Calabria, below right, addressed his agency’s oversight of Fannie and Freddie, which own or guarantee $5.6 trillion in single and multifamily mortgages, during The Roundtable’s January 2020 State of the Industry Meeting in a discussion with Roundtable Member Willy Walker, chairman & CEO, Walker & Dunlop, left.

 

Unemployment Payments 

Weekly federal unemployment payments of $600 that were authorized in the CARES Act expired on July 31.

• This order directs a $400 weekly payment to those unemployed due to the pandemic through December 6, 2020 – or whenever $44 billion from the Department of Homeland Security’s Disaster Relief Fund is depleted to $25 billion.
• The benefit would be funded 75% by the federal government and 25% by states, who are encouraged – but not required – to provide their share of $100 per week. Several governors this week insisted their states do not have the funds budgeted for the proposed allocation. (Roll Call, Aug. 10)
• A senior Labor Department official said the additional $300 weekly federal share would likely take weeks to reach the unemployed and could run out six weeks after initial disbursement. (Wall Street Journal, Aug. 12)

Deferring Payroll Tax Obligations 

This order directs the Treasury Department to defer the withholding, deposit, and payment of the employee-share of payroll taxes for Sept. 1, 2020 through Dec. 31, 2020 – essentially suspending the 6.2% Social Security tax on wages for employees making less than about $104,000 annually on a pre-tax basis. (Brownstein Hyatt Farber Shreck EO Summary, August 12)

• The president said that if he is reelected, he will work to turn the temporary deferral into a permanent tax cut while also seeking to reduce the payroll tax going forward. (Washington Post, Aug. 8)  Treasury Secretary Mnuchin later clarified that the payroll tax deferral would be optional for employers and not mandatory.  (Forbes, Aug. 12).  

• The CARES Act previously authorized businesses to defer the employer-share of payroll taxes until the end of the 2020.  (Click to enlarge image above )

• The executive action on payroll taxes, along with recent comments by President Trump in support of a capital gains tax cut, has renewed speculation that the President could act to reduce capital gains taxes administratively by directing Treasury to allow taxpayers to adjust the basis of assets for inflation when measuring gain.  (MarketWatch, Aug. 12)

Deferring Student Loan Payments

• Student loan payment relief granted under the CARES Act expires on Sept. 30, 2020.  This EO instructs the Secretary of Education to pause monthly payments and interest for student loan borrowers until Dec. 31.

September 30th Funding Deadline

• Most policymakers have left Washington for the August recess, but senators and House members will receive a 24-hour notice to return if a coronavirus deal is reached or if a vote is scheduled.  Both chambers are scheduled to return on September, and no votes are scheduled until the week of September 14 – just weeks before government funding is scheduled to expire on September 30.

• In today’s Bisnow, several commercial real estate industry leaders are quoted in the article, “‘They’re Playing A Dangerous Game’: CRE Leaders On Congress Leaving Without Passing Relief Bill.”

• Referring to the executive orders signed by President Trump, DeBoer states in the article, “The presidential executive orders are positive measures, but they are not a full substitute for legislation.  Legislation that builds on the short-term relief enacted this spring is sorely needed.”

DeBoer also notes, “Congress will face even greater relief needs when they return in September, but at the same time politics will make negotiations even more difficult.”  (Bisnow, August 14) 

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Negotiations this week between congressional lawmakers and the White House on a fourth comprehensive coronavirus relief package continued through this afternoon, as significant policy and funding differences remain between Democrats and Republicans. (POLITICO Playbook PM, August 7)  

• The GOP’s $1 trillion package released July 27 contrasts with the $3.4 trillion proposal House Democrats passed in May. (Brownstein Hyatt Farber Schreck, July 31 – “HEALS Act Comparison to HEROES Act and Current Law,” and CNet, August 5 – “HEALS vs. CARES vs. Heroes stimulus packages: Key differences between Democratic and Republican proposals”)
• President Donald Trump tweeted yesterday that if a deal cannot be made soon, he would sign executive orders extending the CARES Act’s residential tenant eviction moratorium and some enhanced unemployment benefits, while also establishing a payroll tax cut. Unilateral executive action on these matters, however, would likely result in legal challenges. (Bloomberg, August 6)
• Senate Minority Leader Chuck Schumer (D-NY) commented on the negotiations with Treasury Secretary Steven Mnuchin, White House Chief of Staff Mark Meadows and House Speaker Nancy Pelosi (D-CA). “We’re still slogging through step by step by step. They made some concessions, which we appreciated. We made some concessions, which they appreciated. We’re still far away on a lot of the important issues, but we’re continuing to go at it,” Schumer said. (Wall Street Journal, August 4)  
• The House of Representatives is out of session next week but members have been notified they will be called back if a deal is reached. In the Senate, Majority Leader Mitch McConnell (R-KY) announced yesterday that he will allow senators to leave Washington until an agreement is reached. (The Hill, August 6)
• “Exactly when that deal comes together I couldn’t tell you, but I think it will at some point in the near future,” McConnell said yesterday on “Squawk on the Street,” which also featured an interview with Pelosi. (CNBC interviews, August 6)

Paycheck Protection Program (PPP) Loans

The PPP is set to expire on August 9. It has provided over five million loans and more than $521 billion since April to help small businesses meet expenses for payroll, benefits, rent, and other obligations. (Small Business Administration statistics through July 31).

• Senate Small Business Chair Marco Rubio (R-FL) has unveiled two amendments for the next coronavirus relief package to extend the PPP. (Politico Pro, August 5)
• Sens. Rubio and Susan Collins (R-ME) on July 27 introduced the “Continuing Small Business Recovery and Paycheck Protection Program (CSBRPPP) Act” that would fund PPP “second draw” loans, establish a new loan program for “Recovery Sector Businesses,” and make other PPP reforms.  (Section-by-section summary and one-pager.)
• Businesses with 300 or fewer workers, that can also show a 50 percent quarterly revenue loss compared to last year, could qualify for a second round of PPP loans under the Rubio-Collins proposal.
• The Real Estate Roundtable joined 120 business groups (including the International Franchise Association (IFA), U.S. Chamber of Commerce, and U.S. Travel Association) in an August 5 letter urging Congress to expand “second draw” PPP loan eligibility beyond the scope of the Rubio-Collins bill. (IFA press release, Aug. 5)
• The coalition’s August 5 letter stresses that “the 50 percent decline as proposed in the CSBRPPP Act is simply too high.” A revenue decline of 20 percent or greater for small businesses could mean the difference between staying open or closing, according to the letter.
• Meanwhile, CEOs of major retail, hospitality, and technology companies separately urged Congress in an August 3 letter to enable more businesses to qualify for government-backed loans beyond the current PPP. (Politico, August 3) 
• The CEOs expressed support for the “Reviving the Economy Sustainably Towards a Recovery in Twenty-twenty (RESTART) Act” (S. 3814), introduced by Senators Michael Bennet (D-CO) and Todd Young (R-IN).  The measure currently has 52 bipartisan Senate cosponsors. It would allow businesses with up to 5,000 employees to qualify for federally-backed, forgivable loans if they sustained a 25 percent revenue loss in 2020 (with reference to a comparable 2019 quarter). (Press release, May 21).   
• The Roundtable supports S. 3814 to help small and mid-sized businesses meet up to six months of payroll, rent, and other obligations during the pandemic. RESTART loans would be repaid up to seven years, with loan forgiveness amounts calculated based on the business’s employee size and extent of revenue loss. (RESTART Act summary)  
• Sen. Bennet commented on Sen. Rubio’s PPP proposal, “We’ve got to expand the ambition of the program. $100 billion of loans is a great start, but it’s not going to meet the large portion of the need. The amount is substantially greater than that.” (Politico, August 3)

The ongoing efforts of policymakers to provide COVID-19 economic relief was a focus of a discussion last week featuring Real Estate Roundtable President and CEO Jeffrey DeBoer and other real estate industry trade group leaders in a Walker & Dunlop webinar “All Eyes On Washington: What will the next stimulus bill do for CRE?”— moderated by Roundtable member and W&D Chairman and Chief Executive Officer Willy Walker.  (Roundtable Weekly, July 31)

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