On Wednesday, March 10, the House passed the final version of the $1.9 Trillion stimulus package which includes $1,400 direct checks, unemployment bonuses, and money for vaccines. Here is how it could impact the commercial and investment sectors of real estate.
The new stimulus package includes a new round of the Paycheck Protection Program. In the simplest form, this program will provide forgivable loans to small businesses to help them pay their employees. According to Marcus & Millichap, small businesses create 47% of the jobs in the U.S. and are in industries that have taken a hard hit due to the pandemic.
Not only is keeping small businesses running important for employment, but these small companies will also be important engines for growth once we get past the pandemic.
John Chang, Marcus & Millichap
Other sectors that will receive funding from the new stimulus package include airlines, restaurants, healthcare, schools, and public transit.
Federal Unemployment Benefits
The Federal unemployment benefits have been extended through August 29, 2021, with weekly benefits of up to $400 per week. Unemployment benefits will help provide relief for those who have lost their job due to the pandemic.
$25 Billion for housing assistance is also provided by the new stimulus package. This allocation of funds will help provide relief to tenants who were struggling to pay their rent. The funds will also provide a boost in rent collections to landlords.
Direct Stimulus Checks will Boost the Economy
$1,400 direct checks are also set to go out to individuals who meet the requirements. “Each time the stimulus checks go out, it gives the economy a massive adrenaline injection”, says John Chang of Marcus & Millichap. According to research data from Marcus & Millichap, there is a trend of massive spikes in retail spending each time the previous direct checks have been distributed.
A new influx of vaccines and the new stimulus package bringing abundant financial relief directly to the population gives real estate investors a positive outlook on the future of the real estate market.
By Phillip Gonzalez, Research & Marketing Director
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