3 Questions on the FY2021 Budget

December 7, 2020

- By The MAR Legal Team

1. Why are you working on the budget now? Isn’t that due by June 30th? 

Yes it is! However, due to the pandemic, a lot of issues were delayed, including the FY2021 budy. The state enacted a series of short-term budgets in the interim, with the latest set to expire around the end of November. Legislators passed their consensus budget on Friday, December 4thand sent it to the Governor for the final step in the process. The Governor can approve the entire budget, veto the entire budget, or veto and reduce specific line items, but cannot add anything at this stage. 

2. How is real estate implicated in the FY2021 budget?  

Real estate is largely not impacted by this budget, and that’s a good thing. Recent annual and supplemental budgets have been a mixed bag in that regard, though largely positive. For example, a recent supplemental budget included additional funding for affordable housing, down payment assistance funding, and infrastructure improvements. However, other budgets have presented greater challenges. For example, the Governor’s FY2020 budget proposal included a proposal to impose a sales tax on homes, which we successfully defeated.   

Though the FY2021 budget does not have many provisions directly addressing real estate, we were pleased to see $50 million allocated for the Residential Assistance for Families in Transition (RAFT) program, which is playing a key role in protecting housing stability during the pandemic. Increasing RAFT funding and the annual RAFT grant amount have been some of our top advocacy priorities during the pandemic and our Week of Advocacy. Thank you again for making a difference.   

The budget adds some nuance to the eviction process as the Legislature continues to take steps to help protect housing stability and address economic challenges created by COVID-19. Some new requirements created by the budget include: 

  • All notices to quit for nonpayment of rent provided through the end of the state of emergency must be accompanied by a new form to be developed and provided online by the Executive Housing and Economic Development (EOHED). The form, which will be available by December 18, will include attestations on whether the tenant provided the declaration form from the Centers for Disease Control and Prevention (CDC) eviction moratorium and whether the property is covered by the CARES Act eviction moratorium, impacting tenants in rental properties with federal assistance or financing. The form must also include any agreements already put in place by the property owner and resident, as well as information on rental assistance programs, trial court rules and procedures, and relevant state and federal laws. Finally, the form must prominently include a statement explaining that a notice to quit is not an eviction.  
  • Courts will pause cases for residents facing eviction solely for non-payment of rent if they have a pending application for rental assistance. 

The budget also creates new reporting and oversight requirements related to evictions and housing-related COVID-19 programs: 

  • Requires property owners to electronically send copies of all notices to quit for nonpayment of rent to EOHED. 
  • Requires the Trial Court to report to the Legislature on eviction cases. 
  • Requires EOHED to report to the Legislature on the Eviction Diversion Initiative (EDI), a program of resources supporting housing stability. The budget also creates a task force to track EDI outcomes and make recommendations for its improvement. 

Finally, the budget has two other pieces related to our work. It creates a special commission on telecommunications services to study equity and access, including access to broadband services. It also establishes a task force to review and investigate contamination of per- and polyfluoroalkyl substances (PFAS) statewide.  

3. What is MAR doing? 

MAR is, of course, playing an active role. We provided comments on the House and Senate versions and amendments to Legislative leaders. We remained in communication with Legislators throughout the Conference Committee process. We now urge the Governor to take timely action to finalize the FY2021 budget and turn our attention to its smooth implementation, such as through educating members on the new eviction procedures.