In our last blog, we broke down some of the basics surrounding the recently passed American Rescue Plan for 2021. We discussed the context surrounding the legislation, some of the main forms of relief offered, and how to track your stimulus check. Now that we’ve touched on the basics, it’s time to go deeper and analyzing exactly where the money on offer is going, looking into some of the spending trends that are most relevant to tenants and landlords.
Where is the Money Going?
As we previously mentioned, the American Rescue Plan for 2021 comes in at $1.9 trillion dollars.1 However, the real question is: where is all this money going? Aside from the $1400 stimulus checks going out to American citizens, the money is going towards jobless benefits and various forms of federal, state, and local aid. This includes $350 billion for states, local governments, territories, and tribal governments, which contains funding for COVID-19 testing and vaccine distribution, along with $130 billion for schools.2 There is also additional funding for colleges and universities, transit agencies, housing aid, childcare providers and food assistance. However, despite initial attempts to include it in the plan, there was no provision added to raise the minimum wage.3
Some other major areas covered by the plan include:
Business: The ARP includes a bailout for multiemployer pension plans that are financially troubled, along with adding $7.25 billion to the Paycheck Protection Program (PPP). Furthermore, a $28.6 billion appropriation to the Restaurant Revitalization Fund was made, administered by the Small Business Administration (SBA).4 These funds will go to eligible restaurants will grants up to $10 million for restaurant groups and $5 million for individual eateries.5 Restaurants and small businesses owners are also eligible for long-term, low-interest rate loans through a $15 billion Emergency Injury Disaster Loan (EIDL) program.6
Healthcare & The Affordable Care Act: Healthcare received a boost, with a temporary increase in subsidies for people purchasing health insurance through the ACA’s marketplaces. This includes billions of dollars for public health programs and veteran’s healthcare.7 The overarching goal is to help those who have lost jobs keep the health insurance coverage they have through their employer, covering the full cost of premiums through a federal program called COBRA through September.8 The ARP also includes requirements for Medicaid and Medicare, such as mandatory coverage of COVID-19 vaccines and administration and treatment under Medicaid, modifications to certain coverage under Medicaid for pregnant and postpartum women, plus a state option to provide qualifying community-based mobile crisis intervention services.9
There is funding for several COVID-19 related matters, including vaccine activities at the CDC, vaccine and medical equipment supply chains, testing/contact tracing, and genome sequencing/surveilling.10 This is on top of funding for various health-related organizations, including the National Health Service Corps and Nurse Corps, community health centers, the public health workforce, and medical reserve corps.11 Further, there is additional funding for healthcare related to mental health and substance abuse management, including block grants for community mental health services.12
Health Insurance: Perhaps the biggest change is the ARP expands Marketplace subsidies above 400% of poverty and increases subsidies for those making between 100% and 400% of the poverty level for two years (2021 and 2022).13 These additional subsidies will yield substantially lower premium payments for the vast majority of the nearly 15 million uninsured people who are eligible to buy on the Marketplace and the nearly 14 million people insured on the individual market. By extending eligibility for Marketplace subsidies above 400% of poverty, the COVID-19 relief law flattens out the ACA’s so-called subsidy cliff and lowers premiums for virtually everyone already eligible for marketplace subsidies.14
Unemployment Insurance: The law makes special considerations for people approved to receive or receiving unemployment compensation at any point in 2021. If a person is receiving unemployment compensation and they qualify to purchase insurance on the Marketplace, they and any eligible dependents can receive a silver plan with a $0 premium. This is because under the ARP, any household income above 133% of poverty is not considered in the calculation of the premium tax credit if they receive unemployment insurance. However, as under the ACA, the amount of the subsidy in the COVID-19 relief law varies by age, income, and location.15
FEMA (Federal Emergency Management Agency) & Disaster Relief: To address many of the issues caused by the pandemic, FEMA will receive additional funding, which in turn will go towards several different areas of interest. This includes resources for property managers, options for federal support/action, mass care and emergency assistance, and general financial assistance.16 This is in addition to more generalized disaster relief and humanitarian efforts, such as the Emergency Federal Employee Leave Fund, emergency food and shelter program funding, and expansions to the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).17
But How Does It Affect the Real Estate Market?
While many of the provisions covered in the American Rescue Plan might be relevant to landlords and tenants, the real question is what the ARP does to directly address the current real estate and housing market. In our third and final blog in this series, we will look at how the elements of the American Rescue Plan that directly impact real estate actors, along with how tenants and landlords can take advantage of the various benefits that have been provided.
1. Kaplan, T. (2021, March 7). What’s in the stimulus bill? A guide to where the $1.9 trillion is going. The New York Times. https://www.nytimes.com/2021/03/07/us/politics/whats-in-the-stimulus-bill.html.
2. Kaplan, T.
3. Kaplan, T.
4. Hsu, E., &; Praw, D. A. (2021, March 16). Real estate relief in the American Rescue Plan Act of 2021: Insights. Holland & Knight. https://www.hklaw.com/en/insights/publications/2021/03/real-estate-relief-in-the-american-rescue-plan-act-of-2021.
5. Hsu, E., &; Praw, D. A. (2021, March 16).
6. Hsu, E., &; Praw, D. A. (2021, March 16).
7. Kaplan, T.
8. Kaplan, T.
9. Hsu, E., &; Praw, D. A.
10. Hsu, E., &; Praw, D. A.
11. Hsu, E., &; Praw, D. A.
12. Hsu, E., &; Praw, D. A.
13. Cox, C., McDermott, D., &; Amin, K. (2021, March 15). Impact of Key Provisions of the American Rescue Plan Act of 2021 COVID-19 Relief on Marketplace Premiums. KFF. https://www.kff.org/health-reform/issue-brief/impact-of-key-provisions-of-the-american-rescue-plan-act-of-2021-covid-19-relief-on-marketplace-premiums/.
14. Cox, C., McDermott, D., &; Amin, K.
15. Cox, C., McDermott, D., &; Amin, K.
16. FEMA. (2020, June). Mass Care/Emergency Assistance Pandemic Planning Considerations For State, Local, Tribal, Territorial and Non-Government Organizational Planners, Providers and Support Agencies. FEMA. https://www.fema.gov/sites/default/files/2020-06/MCEA_Pandemic_Planning_Considerations_Guide.pdf/.
17. Hsu, E., &; Praw, D. A.
About the author
Isaac Isaiah Carr, JD MBA is founder, CEO, and business attorney of CCSK Law, a kingdom-driven law firm. Launched 5 years ago, CCSK Law grew from a single member firm to a 10 person team. His areas of focus include business formation and strategy, contract writing, sales, and corporate finance. Often referred to as an entrepreneur with a law degree, Isaac is able to offer business strategy utilizing creative solutions guided by legal and accounting principles that are then well executed in law. Experience in a variety of industries including real estate, hospitality, automotive, e-commerce, professional services, and healthcare. Successfully negotiated and closed multi-million-dollar transactions, ranging from $1.8M to $10M, with private investors, corporate leaders, and municipalities. Ultimately, he builds sustainable structures for systematic growth. Graduated from Valparaiso University Law School summa cum laude with his Juris Doctorate as well as the AACSB-accredited Valparaiso University School of Business with his Master’s in Business Administration. Passionate about education in all forms, Isaac is involved in the nonprofit organizations of SCORE, Neighbors’ Educational Opportunities (NEO) and New Vistas High School, ValpoNext, and Music Neighbors.