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How Biden’s Economic Stimulus Plan Might Impact Housing

President-elect Joe Biden last week provided a $1.9 trillion plan for rescuing the U.S. economy. Housing industry insiders and other American's have responded to key housing-related areas of the package including individual stimulus checks in the amount of $1,400 (in addition to approved $600), rental assistance, and the extension of a foreclosure and eviction moratorium. The plan also includes $20 billion for COVID-19 vaccine and testing programs.

The National Association of Homebuilders (NAHB) has listed other items—unemployment insurance, small business assistance, minimum wage increases, tax credits, and more—that they say will impact business and how [1].

Some housing advocates, including the National Housing Coalition (NHC), have voiced approval for what they call a "comprehensive plan to introduce emergency rental assistance."

"This plan would save millions of renters from eviction and provide much-needed support for mom-and-pop landlords who have gone nearly a year without rental payments," NHC President and CEO David M. Dworkin said. "As our nation faces an economic crisis, the focus should be on putting Americans back to work. One of the most impactful ways to achieve that is through major investments in housing construction, which were already needed prior to the pandemic and are vital to our nation’s economic recovery."

However, according to Gryphon USA Principal Richard Kruse [2], Biden's plan to extend the foreclosure/eviction ban another eight months creates additional problems for landlords and tenants.

"In the end, there will be an even bigger tsunami of evictions and foreclosures," said the distressed-asset manager and foreclosure broker. "This is a delay in the market unraveling itself and increases the inevitable consequences."

He said the extent of the past-due rent and mortgage is hard to quantify. The National Council of State Housing Agencies estimates tenants have between $34 billion and $70 billion in past-due rents as of December 31. If correct, the Biden (rental assistance proposal) barely covers the low range estimates, he says.

Dworkin added that "an effective stimulus and vaccination rollout will help prevent the need for additional rental assistance."

Via Twitter, President and CEO of the National Low Income Housing Coalition Diane Yentel said [3]Biden's proposed emergency rental assistance, stimulus checks, and expanded unemployment insurance, “may be enough to cover back rent/utilities and some forward rent, but more is needed," she wrote. "We're not out of this pandemic yet."