MBA, Industry Groups Urge Use of American Rescue Plan Funds for Renters
The Mortgage Bankers Association led more than two dozen other industry groups in an Apr. 15 letter to state and local policy associations, urging them to allocate available American Rescue Plan federal funds to assist renters, consumer-facing small businesses and impacted industries that are having trouble paying rents, mortgages or remaining viable enterprises due to the COVID-19 pandemic.
The letter was addressed to the Council of State Governments; the U.S. Conference of Mayors; the National League of Cities; the State Government Affairs Council; the National Association of Counties; the National Governors Association; and the National Council of State Legislatures. The letter urged the organization’s state, county and municipal policymaker members to “quickly and fully allocate” available American Rescue Plan federal funds to provide assistance to renters, consumer-facing small businesses and impacted industries such as retail, tourism, travel and hospitality.
“The need for assistance to renters is urgent,” the letter said. “On September 4, 2020, the Centers for Disease Control (CDC) published an Agency Order that halts evictions nationwide, which was recently extended again until June 30, 2021. Many states have implemented similar measures. While these moratoriums temporarily delay evictions for Americans who are unable to pay their rent during the pandemic, they do not prevent those tenants from ultimately being evicted. Without rental assistance, tenants may find themselves with unmanageable backlogs of unpaid rent at the end of the moratorium period.
The letter noted the CDC Agency Order and other eviction moratoriums also put tremendous financial pressure on the owners of rental housing, many of whom are small business owners, who must meet their obligations to pay taxes, insurance, mortgage payments and maintain safe and habitable housing.
“The need for assistance to small businesses, travel, tourism and the entire hospitality industry is also urgent,” the letter said. “These businesses have suffered due to government-imposed restrictions intended to slow the spread of COVID-19.”
According to Alignable, a small business network, 49% of small businesses could not make rent payments in March, up 11% from February and 16% from January. This includes 67% of minority-owned businesses, 53% of women-owned businesses and 48% of nonminority-owned businesses. Furthermore, the American Hotel & Lodging Association reports half of hotel rooms are projected to remain empty throughout 2021, and business travel, which drives more than half of the industry’s revenues, is forecasted to remain anemic as the nation recovers. More than 500,000 hotel employees are projected to remain out of work this year and it will be 2024 before the hotel industry returns to its pre-pandemic performance levels.
“For many small businesses, the Paycheck Protection Program has been extremely helpful,” the letter noted. “Unfortunately, many apartment, retail, hospitality and consumer-facing business owners were unable to access such loans due to programmatic restrictions. Fortunately, the American Rescue Plan Act of 2021provides funds that states may use to supply assistance to COVID-19 affected renters as well as to small businesses and the hospitality industry.”
For example, the Act provides $25 billion in emergency rental assistance to help those who have fallen behind on their rent. “Our members are concerned about the need for this assistance to be distributed quickly and without unnecessary programmatic restrictions,” the letter said. In addition, the Act provides $350 billion in additional state and local aid that states are permitted to use to assist households, small businesses and nonprofits, or aid to impacted industries such as tourism, travel and hospitality.
“We strongly urge elected municipal, county and state leaders and other policy makers to target any remaining portions of their allocations, and any other available funding, to rental assistance, small business assistance and to aid the travel, tourism and hospitality industry,” the letter said. “Such assistance would make a big difference in the lives of thousands upon thousands of COVID-19 affected renters and businesses in their cities, counties and states and would also provide stability to the buildings and communities in which they live.”
