CARH’s BROADCAST EMAIL – Legislative Update
On May 13, 2020, H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, was introduced in the U.S. House of Representatives. The legislation, if enacted into law, would provide an additional $3 trillion in stimulus funding to state and local governments, individuals, and businesses as COVID-19 continues to hamstring the economy. The House is expected to take up the bill today, Friday, May 15, likely passing it on a party-line vote. It is unlikely that the Senate will take up the bill or pass it in its current form. However, Senators are assembling ideas for a package that could pass later in June or July.
There are several housing related provisions in the legislation. Rural Development’s (RD) Section 521 Rental Assistance (RA) program would receive an additional $309 million. Funds could be used for residents currently receiving RA as well as for non-RA residents. As CARH members will recall, the last COVID-19 related legislation (CARES Act – Public Law 116-136) passed and signed into law by the President, did not provide additional funding for the Section 521 program. At that time, it was thought that program was funded at a high enough level that additional relief was not needed. However, as time has progressed and COVID-19 has spread across the country, it is apparent that the current budget for Fiscal Year (FY) 2020 would not be sufficient because residents incomes continue to decrease, requiring more RA for existing recipients and income needs of non-RA residents. In the past, budget restraints have interfered with funding for non-RA rent overburdened residents. This additional funding will help those individuals, especially as they deal with continued loss of income and impact of COVID-19 in their communities.
H.R. 6800 would also provide $100 billion for an Emergency Rental Assistance program that would allocate funding to states, territories, counties, and cities to help renters pay their rent and utility bills during the COVID-19 pandemic and help rental property owners of all sizes continue to cover their costs. This program would be administered by the Department of Housing and Urban Development (HUD) through the Emergency Solutions Grants Subtitle B of Title IV of the McKinney-Vento 8 Homeless Assistance Act. While rural communities could access the funding, it would be difficult for residents of properties financed through RD to receive funds in an expedited fashion. Therefore, it has been key to have assistance flow through RD to the Section 521 program and rural vouchers. In addition, $75 billion would go to states, territories, and tribes to address the ongoing needs of homeowners for by assistance with mortgage payments, property taxes, property insurance, utilities, and other housing related costs.
H.R. 6800 would also amend the eviction moratorium and multifamily forbearance provisions in the CARES Act. The legislation further extends the moratorium to all renters retroactively to when the CARES Act was enacted and extends the time period for the moratorium to 12 months after the enactment of the CARES Act. It also extends the multifamily property forbearance allowances for both 1-4 unit properties as well as all multifamily properties—not just those with federally backed mortgages or federal assistance and aligns the timeframe for forbearance to that of the eviction moratorium (12-months). Forbearance and eviction prohibitions that were authorized in the CARES Act would remain in effect until the end of 2020.
Other notable provisions in the HEROES Act would include the following:
For Individuals:
- Provides another set of $1,200 cash payments to individuals and $1,200 for dependent children, up to $6,000 a household. The credit phases out starting at $75,000 of modified adjusted gross income ($112,500 for head of household filers and $150,000 for joint filers) at a rate of $5 per $100 of income. Treasury would issue this credit as an advance payment based on the information on 2018 or 2019 tax returns.
- Makes all dependents eligible for the $500 qualifying child amount in the Economic Impact Payments made under the CARES Act, previously only applicable to children below age 17. This allows households with dependents who are full-time students below age 24 and adult dependents to also receive the $500 amount. This provision is effective retroactive to the date of enactment of the CARES Act.
- Extends a $600 weekly increase to unemployment insurance into January 2021.
- Provides $200 billion to fund “hazard pay” for essential workers who have had to risk exposure to the virus as they stay on the job while much of the rest of the country has been shut down.
- Expands the eligibility and the amount of the earned income tax credit for taxpayers with no qualifying children (childless EITC) for 2020. In particular, the minimum age to claim the childless EITC is reduced from 25 to 19 (except for full-time students) and the upper age limit for the childless EITC is increased from age 65 to age 66. This section also increases childless EITC amount by increasing the credit percentage and phase-out percentage from 7.65 to 15.3 percent, increasing the earned income amount to $9,720, increasing the phase-out amount to $11,490. Under these parameters, the maximum credit amount in 2020 increases from $538 to $1,487.
- Makes the child tax credit (CTC) fully refundable for 2020 and increases the amount to $3,000 per child ($3,600 for a child under age 6). The provision also makes 17-year-olds qualifying children.
- Eliminates for 2020 and 2021 of limitation on deduction of state and local taxes
For Businesses:
- While the legislation does not add additional funding for the Small Business Administration Paycheck Protection Program, it makes the following changes
- Extends the period to 24 weeks after a loan is received or December 31, whichever is earlier to spend funding to keep workers employed, instead of the 8 weeks initially passed, to receive loan forgiveness.
- The bill would also allow firms to rehire workers by the end of the year rather than by June 30 to qualify for loan forgiveness.
- Extend the loans to a greater array of nonprofits, including local tourism bureaus, some trade associations, professional organizations, chambers of commerce and other groups
- Set aside at least 25% of remaining funds for businesses with 10 and fewer employees — and devote any returned or canceled loan amounts to those firms.
- Set aside at least 25% of remaining funds for nonprofits.
- Provide an additional $10 billion for grants through the separate SBA Economic Injury Disaster Loan program
- Give employers a credit worth up to $12,000 per employee per quarter, an increase of $5,000 per worker for the remainder of the year.
- Allows companies to deduct the payroll, rent and other costs that the PPP loans covered.
Click here for the most current (May 13, 2020) Frequently Asked Questions on the PPP loans.
Finally, there would be $1 trillion in aid for state and local governments. $500 billion would be targeted to states; $375 billion to localities $20 billion to tribal governments; $20 billion to territories. $9.6 billion to the Social Services Block Grant, requiring HHS to distribute the funds to all 50 states, the District of Columbia, and all U.S. Territories within 45 days. Under this section, states would be required to pass through at least 50 percent of the funds to county governments, local governments working in partnership with community-based organizations, or directly to community-based organizations with experience serving disadvantaged individuals or families.
The HEROES Act does not include the provisions of the housing credit and bond programs which CARH along with other housing groups have been advocating for inclusion in the various legislative proposals that have and are being crafted to address COVID-19 and its impact on housing and communities throughout the country. CARH is on the steering committee of the ACTION Campaign and will continue to advocate for enacting a minimum four percent Housing Credit rate given that the 4 percent Housing Credit rate fluctuates monthly based on federal borrowing rates and therefore is at an all-time low. The rate fluctuation during these unprecedented times is impacting the financial viability of critical affordable housing developments currently in the pipeline. As indicated earlier, it is uncertain when the Senate will consider an additional COVID-19 relief package. We will likely have indications soon after H.R. 6800 passes the House. We strongly urge the Senate to include the industry’s Housing Credit priorities since the COVID-19 crisis has exacerbated the shortage of affordable housing nationwide.
Share the ACTION sign-on letter that 2,354 organizations signed urging Congress to include our Housing Credit proposals in the next COVID-19 relief package. Also, while the House bill does contain funding for the Section 521 RA program, we need to continue to make our case in the Senate. Again, as with any grassroots efforts, it is important that you provide examples of the impact of COVID-19 and RA funding on your company, employees, residents, and community. Every segment of the economy is being impacted by this pandemic. Congress needs to hear from you today!
To contact your Senators, click here.
To contact your Representatives, click here.