What Does ARPA Mean for Multifamily Investors and Montana Landlords?
For multifamily investors, things are looking better than they did over the past year. On March 11, 2021 President Biden signed the American Rescue Plan Act of 2021 (ARPA). This plan included $21.55 billion in emergency rental help funding. That’s in addition to the $25 billion in the Consolidated Appropriations Act.
But what does ARPA mean for Montana landlords? In short, this represents a significant lifeline thrown to renters and housing providers. The package includes provisions for past rent, future rent, and utilities. But how does that money get allocated? Funds will be issued to states, territories, and local and tribal governments. Those entities distribute funding through existing or new programs.
Who Qualifies and How to Connect Tenants with Rental Assistance
To meet eligibility requirements, a household must:
- qualify for unemployment
- have a reduction in household income
- have significant costs/experienced financial hardship due to COVID-19
- show a risk of experiencing homelessness or housing instability
- has a household income at or below 80 percent of the area median
Eligible households include someone who has been unemployed for 90 days prior to application. Households with income at or below 50 percent of the area median are to be prioritized for assistance. A household meeting both of these criteria is prioritized for emergency rental funds.
After understanding who is eligible, the next step is getting funds to renters. Renters and landlords can check the U.S. Treasury’s Eligible Units of Local Governments. Rental Assistance Database of agencies is another key resource. Each agency has their own application process. We suggest delivering local information to every tenant immediately.
Though the economy seems to be rebounding, many tenants are overwhelmed. That’s largely because of back bills from months of un- or underemployment. In 2020, Jessica Morina of Sterling Commercial Management Group helped tenants apply for emergency rental funds. She saw these funds take several weeks to get to renters. In some cases, it was even up to 90 days.
“The sooner you get this information to tenants, the sooner their rental payments can be made,” said Morina. “People who have lost their jobs unexpectedly have many things to worry about. Things like food on the table, securing childcare so they can hunt for another job, and gas. Helping them navigate rental assistance means they can focus on getting back on their feet faster.”
What Else Should Multifamily Investors Know?
Other notable components of the ARPA include:
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Recent stimulus monies distributed by the federal government.
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A 6 month extension on unemployment benefits plus.
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An extra $300 per week for those receiving unemployment benefits.
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Additional PPP aid of $7.25 Billion.
The eviction moratorium, originally set to expire on March 31, 2021, has been extended for an additional 90 days. The latest extension, however, does specify that renters are not relieved of their obligation to pay rent and housing providers may charge late fees or other penalties due to failure to pay rent in a timely manner. Several federal courts have recently ruled that the CDC’s eviction moratorium is unlawful. On March 10, Judge J. Philip Calabrese of the US District Court, ruled against the CDC’s eviction order.
What’s more, Judge Calabrese said, “Without question, effective pandemic response depends on the judgment of reliable science—not political science. But that obvious truism does not empower agencies or their officials to exceed the mandate Congress gives them.” Other courts have ruled against the CDC eviction moratorium. Consolidated Appropriations Act
On April 6, 2021, the Montana Department of Commerce laid out terms for use of emergency rental assistance in the Consolidated Appropriations Act:
“Renters can receive a monthly maximum of $2,200 for past due and future rent payments, up to $300 for past due and future utilities including gas and electric, and $50 per month for internet.
Households can access assistance dating back to April 1, 2020. Renters will not be required to provide a co-pay, and landlords are able to apply on behalf of their renters. Payments will be made directly to landlords and utility providers.”
Application info for this program can be found here.
Takeaway
As a result, there are two realities ahead. First, that the eviction moratorium will most likely expire in the near future. But secondly, lots of housing assistance included in ARPA can support renters who are still stretched thin by the pandemic.
“I’m always keeping current on how President Biden’s plan will impact our clients and tenants,” said Morina. “But it is a dynamic situation. I’d encourage folks will questions to call me for the latest information.”
Contact Jessica Morina for more information on the impact ARPA has for Montana landlords and tenants.
