How Biden’s First Executive Orders Will Impact CRE

Newly inaugurated President Joe Biden signed 17 executive orders, memorandums and proclamations on Wednesday afternoon, aiming to set the direction of his administration as well as undo various policies of the previous one. 

Two will have particular ramifications in commercial real estate — the extension of the federal eviction moratorium and the U.S.’ re-entry into the Paris Agreement on Climate Change.

Biden further extended the multifamily eviction moratorium, which was enacted by the Centers for Disease Control and Prevention in early fall at the direction of the Trump administration. The original order expired at the end of 2020, but was extended by the second stimulus bill until the end of January. The new order extends the moratoriums on evictions for nonpayment of rent or mortgages until March 31.

The eviction moratorium is aimed at addressing the increasingly serious matter of tenants who cannot pay their rents. More than a quarter — 28% — of U.S. renters are starting the year with unpaid rent bills from previous months, according to a new survey by Apartment List. Rent debt is concentrated among minority renters, and 53% of Black renters are now burdened with unpaid housing bills, according to Apartment List.

“Extending the moratoriums on evictions will not only protect families, but will avoid harm to the housing markets until families can once again resume housing payments,” said Joseph Lynyak, a partner at the law firm Dorsey & Whitney and an expert in regulatory reform.

Not everyone agrees.

“As an attorney representing people in the industry and being an owner of a substantial number of apartment units I find it somewhat unfair — and I understand very well the risk of being thrown out of your apartment — that this government and none of the other [global] governments are asking anyone other than landlords to contribute to the support of their customers,” said Alan Hammer, an attorney and member of the real estate practice at Brach Eichler in New Jersey.

The National Multifamily Housing Council and National Apartment Association issued a joint statement Wednesday night calling the executive order “well-intended” but saying they have “serious concerns” about the eviction moratorium being extended without additional rental relief or other financial assistance. 

In September, the NAA joined a lawsuit filed by the New Civil Liberties Alliance challenging the CDC order and the agency’s authority to issue it. The organization had been lobbying for direct rental assistance for months, some of which was eventually included in the second stimulus bill in December. Biden has proposed the American Rescue Plan, which would include further rental assistance as well as unemployment assistance and more stimulus checks. NMHC and NAA’s statement supported that proposal but said even it does not sufficiently address the outstanding rent debt.

Biden will also direct the Departments of Agriculture, Housing and Urban Development, and Veterans Affairs to extend their foreclosure moratoriums for their federally backed mortgages. 

“These emergency measures are important,” Biden’s top economic adviser, Brian Deese, said on a call with reporters, as reported by CBS on Wednesday. “There are more than 11 million mortgages guaranteed by the VA, Department of Agriculture and HUD that would be extended.”

Dees Stribling and Christie Moffat

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