Coronavirus Aid, Relief and Economic Security (CARES Act) and Implications for U.S. Real Estate

 Entire Document





Small Business Emergency Loans Under the “Paycheck Protection Program”


 Mid-Sized Lending Facility 


 Federal Reserve 13(3) Lending Programs and Facilities in the CARES Act 

 Tax Policy 


POTUS Declares National Emergency to Combat Coronavirus; House of Representatives Readies COVID-19 Response Legislation that Puts “Families First”

Trump Rose Garden Announces National Emergency

President Trump declared a national emergency this afternoon to unleash billions of disaster reserve funds to combat the coronavirus, as House Speaker Nancy Pelosi (D-CA) announced this evening that she “clinched a deal” with Treasury Secretary Steven Mnuchin on legislation to assist families and businesses immediately impacted by the pandemic.  (POLITICO, March 13)  

Emergency Declaration 

  • “To unleash the full power of the federal government today I am declaring a national emergency,” President Trump announced today in the Rose Garden.  “Through shared sacrifice and national determination we will overcome the virus,” he added.  Stocks rallied throughout the day today and shot-up after the announcement, regaining some of this week’s historic losses.  (CNBC, March 13)   
  • The declaration authorizes the Federal Emergency Management Agency (FEMA) to utilize over $42 billion available in the Disaster Relief Fund, to pump money into the economy for COVID-19 response.  States and cities can use the funds for emergency protective measures such as widespread coronavirus testing, diagnosis, treatment and stabilization.  The money can also be used to purchase durable medical equipment, set-up temporary treatment tents, deploy portable and mobile care facilities, store a 30-day supply or prescriptions for acute conditions, and disseminate public health information.
  • Senate Minority Leader Charles E. Schumer (D-NY) led other Senate Democrats in a March 11 letter urging President Trump invoke the Stafford Act to declare a national emergency.
  • Trump also announced a public-private partnership to mobilize COVID-19 testing.  “We want to make sure that people who need a test can get one safely, quickly, and conveniently,” he added.  The aim of the effort is to supply up to 1.4 million tests next week and five million in a month, with drive-through tests available in critical locations.
  • Google will aim to build an online screening website for COVID-19 testing.  Debbie Birx, the White House Coronavirus Response Coordinator, said during the news conference that website users will have to log in, fill out a screening and risk factor questionnaire, and then be directed to a “drive through” testing facility.  The goal is to provide test results within 36 hours.  (AP and Techcrunch, March 13)  
  • This is a “pro-active, leaning-forward, aggressive” response to stay ahead of the pandemic, said Dr. Anthony Fauci, the top infectious disease expert at the National Institutes of Health, at the Rose Garden event.  The emergency declaration removes constraints on government, public health experts, and medical professionals “to do everything they possibly can” to contain and mitigate the virus’s spread.  

Congressional Action

  • On Capitol Hill, the House of Representatives today is expected to pass the Families First Coronavirus Response Act (H.R. 6201),  following reports of agreement reached by House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin.  (POLITICO, March 13)  
  • The Senate cancelled its planned recess next week to consider a relief package. “I am glad talks are ongoing between the Administration and Speaker Pelosi,” said Senate Majority Leader Mitch McConnell (R-KY).  “I hope Congress can pass bipartisan legislation to continue combating the coronavirus and keep our economy strong.”  (Roll Call, March 12)  As of this writing, Republicans are reportedly waiting for a “high sign” from President Trump for GOP support of the Families First Coronavirus Response Act.  (POLITICO Playbook PM, March 13)
  • Pelosi remarked that H.R. 6201 is “focused directly on providing support for American families.”  She added, “the three most important parts of this bill are testing, testing, testing.”  Specifically,  the Families First Coronavirus Response Act includes:  

    • required medical insurance coverage for COVID-19 testing for all Americans;
    • extension of unemployment insurance benefits;
    • expansion of paid leave for full-time and hourly employees affected by the virus, including those staying home to care for family members;    
    • shoring up SNAP and other programs that provide food security for school children, low-income families, and the elderly;       
    • additional funds for Medicaid; and 
    • a credit to reimburse companies for mandatory paid sick leave
  • Meanwhile, a framework suggested by Senate Democrats, and a plan of executive actions President Trump announced Wednesday in his oval office address, show that leadership of both parties want a quick economic response from Washington. (Brownstein Hyatt Farber Schreck“Coronavirus Economic Update,” March 13)  
  • Lawmakers are focused on swift resolution of matters that have the highest chances of immediate bipartisan consensus.  To that end, Congress is unlikely to address the European travel ban on foreign nationals announced by President Trump on Wednesday, which takes effect tonight at midnight.  (New York Times, March 12).  Likewise, a payroll tax holiday opposed by Democrats (CNBC, March 11), and long-term paid sick leave unrelated to the virus and opposed by business groups (The Hill, March 12), are off-the-table.
  • Business groups most directly impacted by the COVID-19 fallout have recommended their own tailored measures of government response to assist their industries.  For example, the U.S. Travel Association, the American Hotel & Lodging Association, and the American Resort Development Association joined 150 travel-related organizations urging “calm, rational, and fact-based decisions” as policy makers and public health officials respond to COVID-19.  (March 10 Travel Industry Statement).
  • Also, the American Society of Association Executives (ASAE) urged Congress to consider targeted assistance for tax-exempt organizations and trade groups suffering from event cancellations and reduced meeting attendance as a result of the pandemic. (ASAE Letter, March 6)
  • Real Estate Roundtable President and CEO Jeffrey DeBoer notified all Roundtable members on March 9 that the organization’s March 31 Spring Business Meeting was canceled “in light of health and safety issues surrounding COVID-19.” 
  • The imminent economic relief package anticipated from the House today follows the $8.3 billion measure Congress sent to President Trump’s desk last week.  That legislation focused on public health measures to bolster vaccine development and research, increased equipment stockpiles, and support for state and local health responses to the virus.  (Roundtable Weekly, March 6).   

In the coming weeks, further policies from Congress and the Administration are expected to address longer-term stimulus of the U.S. economy through measures such as infrastructure investment, workforce development, increased lending for small businesses, and stabilizing the capital markets.  The Roundtable will continue to work with our colleague partner associations to unify the real estate industry’s message as policy makers develop and implement measures to mitigate the COVID-19 pandemic. 

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Emergency Coronavirus Response Package Enacted, Fed Attempts to Blunt Economic Impact with Interest Rate Cut

Trump signs Coronavirus bill x475

This week congressional policymakers overwhelmingly passed, and President Trump signed, an $8.3 billion emergency spending package to combat the coronavirus outbreak in the U.S. – after the Fed reduced interest rates by a half-point amid early signs of economic disruption.

  • The president signed the emergency funding bill Friday morning. “We’ve signed the 8.3 billion,” Trump said. “I asked for two and a half and I got 8.3 and I’ll take it.”   (The Hill, March 6)  Photo above:  President Trump, with Secretary of Health and Human Services Alex Azar, signs the coronavirus bill into law.
  • The package – H.R. 6074 (116) – will bolster vaccine development and research, increase equipment stockpiles, and support state and local health responses to a virus that has sickened more than 160 people in more than a dozen states.  (NY Times U.S. coronavirus map and Center for Disease Control and Prevention updates)
  • As questions remain about the severity and spread of the illness, the stock market continued to experience historic gyrations this week, with falling yields exerting wide-ranging effects on borrowing costs and bank profitability. (Wall Street Journal, March 5)
  • In an effort to contain the coronavirus’s economic fallout, Fed Chairman Jay Powell announced on March 3 a cut in the federal funds rate cut to a range of 1 to 1 ¼ percent – the largest emergency cut to interest rates since the 2008 financial crisis.  The Fed’s Open Market Committee is scheduled to meet again on March 17-18 to issue updated economic forecasts and any further change to the current federal funds rate.
  • Powell said, “The virus and the measures that are being taken to contain it will surely weigh on economic activity both here and abroad for some time.”  He added, “We are beginning to see the effects on the tourism and travel industries, and we are hearing concerns from industries that rely on global supply chains.”  He added, “We don’t think we have all the answers, but we do believe that our action will provide a meaningful boost to the economy.”  (Powell’s press conference transcript). 
  • The Federal Reserve’s latest nationwide survey of business conditions shows that that half of the central bank’s districts — Philadelphia, Cleveland, Richmond, Chicago, Dallas and San Francisco — were reporting impacts from the coronavirus in tourism and manufacturing chains.  (The Fed’s Beige Book, March 4)
  • The U.S. Travel Association (USTA) on Tuesday issued a report that supports the Fed’s findings.  USTA predicts a 6 percent plunge over the next three months in international inbound travel to the United States, which could result in a loss of two to three billion dollars – the largest dip in global visitation since the financial crisis. About 79.3 million international visitors came to the U.S. last year.  (USTA Travel Trends Index, March 3)
  • [The Real Estate Roundtable is part of the Visit U.S. Coalition, led by the U.S. Travel Association (USTA) and the American Hotel and Lodging Association.]
  • The potential impact of coronavirus on the economy and commercial real estate was part of a recent discussion between Real Estate Roundtable President and CEO Jeffrey DeBoer and Brookfield Property Partners Chairman Ric Clarke at Colorado University’s Annual Real Estate Forum (see photos here). DeBoer was also interviewed partly about the coronavirus outlook by Rosen Consulting Group’s Chairman Ken Rosen during the Pension Real Estate Association’s Spring conference this week.
  • Coronavirus-related updates and resources are available to the commercial real estate industry through the RE-ISAC’s #COVID Section, which includes:
  • Coronavirus Disease 2019 (COVID-19) Situation Summary, last update March 3.
  • Novel Coronavirus (2019-nCoV) in the U.S., March 5 update.

The potential impact of coronavirus on the health of global markets and the U.S. economy; commercial real estate sectors and the industry’s response; and how it may affect the routines of millions in American society, will be a focus during The Roundtable’s March 31 Spring Meeting in Washington, DC.

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Global Stock Markets Plunge Over Coronavirus Threat; U.S. Policymakers and CRE Industry Prepare for Potential Disruption

Deepening concerns over the international spread of the coronavirus (COVID-19) have prompted U.S. policymakers to consider measures for combating the potential public health and economic repercussions of the global disease, as the commercial real estate industry braces for potential disruption.

Dramatic drops in international stock markets this week reflected investor anxiety over the potential global economic impact of a virus that has, so far, infected more than 83,000 people in at least 56 countries and killed more than 2,800 – with no vaccine yet in sight.  (New York Times and Axios for coronavirus daily updates)

Today, the World Health Organization raised its risk level of the global coronavirus to “very high” – the most serious assessment in its four-stage alert system. “This is a reality check for every government on the planet. Wake up. Get ready. This virus may be on its way,” said Dr. Michael J. Ryan, deputy director of W.H.O.’s health emergency program.  (The Hill, Feb. 28)

Dr. Nancy Messonnier – director of the National Center for Immunization and Respiratory Diseases of the Centers for Disease Control and Prevention (CDC) – on Feb. 25 told reporters, “We really want to prepare the American public for the possibility that their lives will be disrupted.”  She added, “Ultimately we expect we will see community spread in the United States. It’s not a question of if this will happen, but when this will happen, and how many people in this country will have severe illnesses.”   (CDC Coronavirus Resources)

There are now 62 confirmed cases of novel coronavirus in the United States, Messonnier stated during a press briefing today.   The limited guidance that has been distributed to date has primarily been directed at health care professionals, not specific industries.

Trump administration health officials on Tuesday told Senators during a closed-door briefing that a vaccine, although being rushed into clinical trials, could take more than a year before one would be widely available to the public.  (Washington Post, Feb. 25)

The Trump Administration initially requested $2.5 billion to combat the spread of the virus.  Congressional appropriators are working this weekend on an emergency coronavirus spending package of $6 billion to $8 billion and intend to take action on the House floor next week. House Speaker Nancy Pelosi said bipartisan discussions on a final figure are getting “close.”  (PolticoPro, Feb. 28)

Federal Reserve Board Chairman Jay Powell issued a statement today to ease investor concerns.  “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy,” Powell stated.  (The Fed, Feb. 28)

Just earlier in the week, Fed officials said it was too soon to ascertain the potential adverse effect of the coronavirus on the U.S. economy.  Fed regional presidents said they are carefully monitoring the progression of the virus and how disruptions in global supply chains may affect the U.S. before considering a decrease in interest-rates.  (Wall Street Journal, Feb. 25)

As stocks are on track for the biggest weekly losses since the 2008 financial crisis, investors have reassessed the chances that the Federal Reserve will lower interest rates to as soon as March  (Wall Street Journal, Feb. 27)

CRE Industry Concerns

Roundtable President and CEO Jeffrey DeBoer said, “Owners and managers of all types of buildings are taking actions to better understand the potential contagion and how to best help building occupants, visitors and employees prevent further spread of the coronavirus. This viral threat to lives, businesses and economies is a top concern for our industry and we stand ready to assist public health officials as they recommend.”

The Roundtable’s Homeland Security Task Force (HSTF) and the Real Estate Information Sharing and Analysis Center (RE-ISAC) are in close contact with the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC) to provide useful information to the real estate industry on the coronavirus threat as it continues to evolve. 

The Roundtable’s HSTF & the RE-ISAC will also host a conference call on Monday, March 2 with CDC’s Deputy Director for Infectious Diseases, Dr. Jay Butler.  

Coronavirus-related updates and resources are available to the commercial real estate industry through the RE-ISAC’s #COVID Section, which includes these recent reports:

  • Coronavirus Disease 2019 (COVID-19) Situation Summary, last update 25 Feb.
  • 2019 Novel Coronavirus (2019-nCoV) in the U.S., 26 Feb update (update will be provided later today and in tomorrow’s Daily Report).

Other resources include:

  • The Centers for Disease Control and Prevention (CDC) web page includes an interim guidance based on what is currently known about the Coronavirus Disease 2019 (COVID-19). The interim guidance may help prevent workplace exposures to acute respiratory illnesses, including nCoV, in non-healthcare settings. The guidance also provides planning considerations if there are more widespread, community outbreaks of COVID-19.

The Roundtable’s next membership meeting is currently scheduled for March 31 in Washington, DC (Roundtable-level members only).