What the American Rescue Plan means for Property Managers and Landlords

In January, 1-in-5 American renters were behind on their rent. As the pandemic has continued, unpaid rents are adding up — collectively over $70 Billion by one estimate. This poses real challenges for landlords. In addition to direct payments, the recent stimulus package includes over $20 billion for rental assistance. This, combined with the $25 billion already set aside for this purpose in December, could allow millions of tenants to pay back the rent they owe. 

There are several important aspects of this program that landlords should know about.

• Tenants can apply for rental assistance, but landlords can also apply on behalf of their tenants. 
• While this program’s funding is from the federal government, the funds will be distributed through state and local governments. This means the process for obtaining these funds might vary considerably based on the local policies in place.
• This process prioritizes rent that is owed. If approved, tenants will be eligible to receive up to 12 months of back rent. This money can be paid directly to landlords. 
• Once the rent owed is paid, this program might also approve tenants for up to three months of rent assistance going forward.
• There are eligibility criteria for renters (or landlords on behalf of renters) to apply for this assistance.

Tenants must:

• Have experienced unemployment, a reduction in household income, or experienced another financial hardship
• Demonstrate a risk of homelessness (i.e., the renter would be homeless if evicted for nonpayment)
• Have a household income below 80% of the area’s median income.

Additionally, the program prioritizes funds for tenants who have been unemployed for at least 90 days before the submission of the applications and households whose income is at or below 50% of the area median income. 

If tenants owe rent and are eligible for assistance, this assistance is an important way to try to recover missed payments. Landlords should check the local application process and apply for this assistance on behalf of eligible tenants who have not done so. 

Information is available from the Treasury Department, but we also suggest searching for “rental assistance” and your county or city.