Since the coronavirus pandemic hit the U.S. back in March, the impact it has had on property managers, owners, and management companies has been nothing short of catastrophic. Property managers had to immediately pivot from standard operational responsibilities to facing new issues like how to handle state and local eviction moratoriums, difficulties with collecting rent, and new sanitization protocols. In addition, most, if not all, property managers were expected to be physically present at the properties every day to provide direction and communication.
To help mitigate the effects that COVID-19 has had on our members and their businesses, the IREM Government Affairs team and our coalition of industry partners are continually advocating for support and relief on behalf of the real estate industry. This article looks back at the governmental relief provided to property managers and owners and some of the advocacy actions that the IREM Government Affairs team undertook to assist members during these difficult times, and it looks ahead to what we can expect for the real estate management industry in 2021.
The CARES Act
On March 27, 2020, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, creating $2.2 trillion in aid for workers, businesses, and families. The bill also included provisions addressing the real estate industry, including loans for small business, mortgage forbearance, and an eviction moratorium.
The act appropriated more than $360 billion for new Small Business Administration (SBA) programs through the Paycheck Protection Program (PPP) loans and the Economic Injury Disaster Loans (EIDL) advance grants program. These loan programs were designed to provide a direct incentive for small businesses to keep their workers on the payroll. Follow-up legislation in April added an additional $370 billion ($310 billion for PPP, $60 billion for EIDLs) to meet demand for the loans.
In June, the PPP Flexibility Act of 2020 was signed into law, increasing flexibility for borrowers in how they can use their PPP loans. It lowered the amount required for payroll costs from 75% to 60% and lengthened the funds’ approved period of use from 8 weeks to 24, through Dec. 31 at the latest.
The CARES Act also included a 60-day moratorium on servicer foreclosure actions, including evictions and sales of federally backed mortgage loans. The legislation stated that borrowers could submit requests to their mortgage loan servicers for up to 180 days of forbearance on federally backed mortgage loans (including HUD, Fannie Mae, Freddie Mac, and Ginnie Mae) if they experienced financial hardship because of the COVID-19 emergency. In addition, any landlord who received forbearance on a federally backed mortgage could not evict any tenants from their property based solely on nonpayment of rent, nor could they charge tenants any late fees or other penalties due to nonpayment of rent.
CDC eviction moratorium
On Sept. 1, the Trump administration announced that the Centers for Disease Control and Prevention (CDC) issued an order under Section 361 of the Public Health Service Act to halt residential evictions through Dec. 31 to prevent the further spread of COVID-19. The order will halt residential evictions if the tenant provides the landlord with a document in writing that indicates:
- They have used all efforts to obtain government assistance for rent.
- They earn no more than $99,000 in income (or $198,000 if filing jointly).
- They are unable to pay the full rent due to loss of income, loss of work, or extraordinary medical expenses.
- They are making best efforts to make a timely payment.
- That eviction would render them homeless or need to move into a new residence shared by other people who live in close quarters because of having no other available housing options.
In response, IREM joined the National Association of REALTORS® (NAR) in meeting with White House officials on the eviction ban. 2020 IREM President-Elect Chip Watts, CPM; IREM Past President Donald B. Wilkerson, CPM; and past IREM Legislative and Public Policy Committee Chair Amy Hedgecock, CPM, joined a group of NAR representatives, led by NAR President Vince Malta in a meeting with officials from President Trump’s administration.
Watts communicated to White House officials the “hesitancy on the part of some property owners to now put their properties into the rental market.” In addition, Watts stated, “the industry has already observed significant differences in interpretation by courts around the country.”
Hedgecock informed White House representatives of small property owners who are struggling to pay upcoming taxes and make needed repairs. She also explained the long-term impact of bad credit reports for tenants and future needs to increase rents and security deposits for future tenants to cover property owner losses.
Wilkerson reminded White House officials that housing relief funds, which were included in the CARES Act and other federal relief efforts, are mostly targeted to low-income families. However, the CDC order covers individual renters making up to $99,000 a year or $198,000 jointly.
IREM also joined NAR in a statement urging immediate congressional action on rental assistance. We also encouraged members to participate in our Call to Action asking for rental assistance for property owners and managers. Furthermore, IREM signed onto a letter with our coalition partners, which include NAR, NAA, NMHC, NAHB, and Mortgage Bankers Association, stating that the action taken by the Trump administration enacting a federal residential eviction moratorium through Dec. 31, without rental assistance, will ultimately harm the very people it aims to help.
Although the following does not capture all of the initiatives the team has been conducting, it provides a brief overview of the actions achieved.
- Over 7,000 call-to-action messages to federal legislators in 2020 for COVID-19 relief. The Calls to Action is our digital platform, which allows our members to engage with legislators and is critical at all levels of government.
- 2020 Capitol Hill Fly-in. At our 2020 Fly-in, held March 10–11, over 50 members attended and conducted over 100 meetings with legislators to discuss the importance of reauthorizing and reforming the National Flood Insurance Program (NFIP) and supporting the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595, S. 1200).
- Over 100 meetings on Capitol Hill
- Over 50 letters sent to Congress and federal agencies. IREM has signed onto letters to Congress and other government agencies advocating for relief for the real estate industry
- Working with over 400 industry organizations such as NAR, NAA, NMHC, and BOMA, to amplify our voices and affect change
- Public policy webinars. It is important for our members to stay informed. Recordings are available on IREM’s Public Policy Webinars page on IREM.org.
Advocacy will continue to be a top priority for our members, their businesses, and their clients.
The IREM Government Affairs team has a number of initiatives planned for 2021 including the Capitol Hill Fly-in, Congressional Briefing, quarterly webinars, and in-district meetings. We will also continue providing members with valuable resources such as the Public Policy Priorities, policy statements, Government Affairs Digest, and our Advocacy Action Center.
The 2020 election was a campaign like Americans had never seen before. Seats contested in the 2020 election included all 435 seats in the U.S. House of Representatives, 35 of the 100 seats in the U.S. Senate, and the presidency of the United States.
While each state establishes a deadline for election results to be certified, former Vice President Joe Biden is the presumptive winner of the 2020 election. Although it is still undetermined what his top political priorities will be, during the campaign, Biden did release several policy positions addressing the real estate industry.
Regarding taxes, Biden has stated that he would reinstate the 39.6% top individual federal income tax rate from its current 37%, raise the corporate rate from 21% to 28%, and impose a 12.4% Social Security payroll tax on earned income above $400,000. Biden recently suggested eliminating 1031 exchanges for real estate investors with annual incomes of more than $400,000 in order to help pay for a 10-year, $775 billion plan that would create universal preschool, eliminate home care waiting lists for those on Medicaid, and create tax credits for low-income and middle-class families to help pay for childcare, among other initiatives.
On the affordable housing front, the presumptive president-elect plans on expanding the Section 8 housing choice voucher program, the largest federal housing program for low-income renters. Biden would make Section 8 an entitlement, thus ensuring vouchers to all eligible people.
More specifically, Biden would require states receiving federal funds through Community Development Block Grants or Transportation Block Grants to incorporate inclusionary zoning into their planning, which requires that a portion of new construction be set aside for affordable housing.
However, as stated earlier, his political agenda could change over the next several weeks. His top priorities as president will come into focus as we get closer to Inauguration Day on Jan. 20th, 2021.