There has been a great deal of media coverage in recent weeks about the second stimulus package Congress passed. The $900 billion package earmarked $25 billion specifically for rental assistance.
For those of us with tenants who are struggling to make rent, this sounds like welcome news. However, how quickly that money will be available depends on where your rental property is. In places where emergency rental assistance programs already exist, it will be faster than places where those distribution channels need to be built from scratch.
Not every tenant will be eligible for help. Their household income must be below 80% of the county’s median. The median household income in Hennepin County is $75,052 and $62,919 in Ramsey County.
Funds can be used for back rent, and overdue or future utility bills. Landlords can be paid directly by state and local governments for up to 12 months of back rent, but the tenants must have signed off on the application. Tenants may also apply for aid independently and use the money to pay their landlords.
There are currently an estimated 12-14 million tenants in the United States who are behind on rent. Doing some quick math – $25 billion/12 million = $2083 per tenant. If the numbers of delinquent tenants skew higher, then the back rent number will be lower.
Clearly, this won’t be enough to make many landlords whole. Congress likely doesn’t want to see millions of people evicted, so look for them to extend the current eviction moratorium at least until they can get either more aid or an alternative worked out.