U.S. citizens are getting their second stimulus relief after President Donald Trump signed the latest $900 billion Congress stimulus package on December 27th, which included $25 billion for rental assistance, $300 billion in renewed Paycheck Protection Program, $14 billion for transportation aid, and $15 billion in relief for small businesses, specifically theaters and live entertainment venues. Along with $600 stimulus checks, unemployment insurance has been supplemented to $300 a week, and a federal eviction moratorium has been pushed out by one month.
The $25 billion in renter’s assistance is a win for both landlords and renters alike, as experts view this rental relief as the only solution to stabilizing the market. The $25 billion is to be sent to states to be dispersed on their judgement, which could make it more difficult to obtain. Depending on the state, renters may have to apply for the assistance to the relief agency, and other states may have to quickly create rental relief administration programs altogether to meet the demand.
According to Moody’s Analytics’ chief economist, renters will owe an estimated $70 billion in unpaid rent. By that estimate, up to 40 million people could face eviction over the coming months. Private capital landlords are facing the brunt of the consequences as they typically own affordable housing and do not have the capabilities to absorb the loss of income from unpaid rent and increasing operating costs. This could result in smalltime landlords increasing rents as supply diminishes and large private equity firms flip these properties.