As we approach one year since the COVID-19 pandemic first rocked the United States, many markets originally hit hardest by shutdowns continue to struggle to stay afloat. With industries such as restaurants, hospitality, and retail seeing a decline and many forced to shutter their doors, the impact extends even to the housing and commercial rental sector. Landlords and property management companies have taken a hit from increased vacancies and lowered rents, as well as the impact of offloaded downtown office spaces as more companies look to spaces outside of major cities or increasingly turn to work-from-home options for the foreseeable future.
Especially in the midst of a second surge in cases across the United States, businesses are also facing additional restrictions as state and local governments work to combat the spread, leading to more spaces “hibernating” for the winter – or closing permanently.
While the COVID-19 vaccine rollout provides hope, it’s still expected to be some time before the market recovers to pre-pandemic levels, with questions about if that’s even possible or if this “new normal” is more permanent.
But with the distribution of vaccines, 2021 looks brighter and on the path to recovery as Congress passed a $900 billion coronavirus relief stimulus package in December 2020, and another anticipated stimulus package being proposed by President Joe Biden shortly before he took office.
The $2-trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act – first signed into law in March 2020 – included provisions such as the $1,200 stimulus checks, expanded unemployment benefits, and billions in aid to businesses and healthcare facilities.
December’s package extended and expanded those provisions, including: another $600 in stimulus checks for eligible Americans; $300 in additional unemployment benefits extended through March 14, 2021; $25 billion allocated for rental assistance; and extending the eviction and foreclosure moratorium for renters from its Dec. 31 deadline to Jan. 31.
This inflow of cash will assist individuals and families in paying rent, utilities, and other bills, therefore providing a boost for landlords and property managers. Other provisions were targeted toward businesses, including: expanding the eligibility for PPP loans; issuing a second round of Paycheck Protection Program loans totaling $284.5 billion; increasing the size of those PPP loans to 3.5 times payroll and making associated expenses tax-deductible; and allocating billions in grants and funding for shuttered venue operators and small businesses. This funding will provide a lifeline for many struggling business tenants.
On top of December’s stimulus package, Biden proposed another stimulus package at twice the cost and rivaling the first stimulus package at an additional $1.9 trillion in the weeks leading up to his inauguration. His proposed plan currently entails issuing another $1,400 in stimulus checks with expanded eligibility, bringing the total of recent stimulus checks to the $2,000 originally floated for the second round of checks. He also proposed raising the unemployment benefit increase from $300 a week to $400 a week through September, creating a new $15 billion grant program for small business owners, and investing an additional $35 billion in low-interest loans and venture capital to entrepreneurs. One proposal – raising the minimum wage nationwide to $15 an hour – may set the stage for Congressional conflict, providing a boost in income to minimum-wage earners, but potentially posing a strain on businesses already struggling to pay employees and keep their doors open.
The day of his inauguration, Biden issued a flurry of executive orders, including further extending the eviction moratorium through March 31 – while his initial proposal pitched extending it through the end of September – and has requested that HUD ”consider extending the foreclosure moratorium and continuing forbearance applications for federally-guaranteed mortgages,” according to the Wall Street Journal.
Georgia’s election shifting control of the Senate to a Democratic majority proves more favorable for the approval of another round of stimulus funds and more aid under Biden, but the legislative review of a still-awaited proposal – and the administration’s expressed desire for a bipartisan bill – will determine if the entire $1.9 trillion package will be passed or if Republicans will successfully cut that down. Even so, more funds for individuals and businesses should increase the financial buffer, helping the multifamily and commercial rental industry until enough vaccines are rolled out to reopen the economy.
HOW EBI CONSULTING CAN HELP YOU
No matter where your business stands, EBI Consulting is here to help you weather this storm. For those looking to take advantage of vacancies, our range of services include retrocommissioning and portfolio management to minimize energy expenditure, lower costs for office and business spaces, and identify problems during temporary closures.
If you’re looking to safely return to the office, our health and safety and architectural design expertise can help with disinfecting and cleaning protocols and redesigning a safe office space. Additionally, our core service – due diligence – employs a team of dedicated professionals with the expertise to determine the risk of holding onto existing properties as the market changes, assist with acquiring new properties, or efficiently remodel existing spaces to attract new business when the economy reopens.
Contact us today to understand how EBI can help you maximize your business in 2021.