MACDC Achieves Solid (albeit insufficient) Progress on our COVID-19 Response Policy Recommendations

On March 23, 2020, MACDC issued a set of initial recommendations for state policy makers with respect to helping small businesses, tenants, homeowners, and communities deal with the economic fallout from the pandemic. While there is much more to be done at the local, state and federal level, we have seen some important progress over the past month. Some of the key policy wins include the following.

  • The Federal CARES Act provided essential funds to address the crisis that were consistent with our initial recommendations.

    • Unemployment Insurance:  The CARES act made important expansions to our Unemployment Insurance program both to ensure more generous benefits (an extra $600 per week) and coverage for contractors and self-employed individuals.

    • Small Business Assistance: The Paycheck Protection Program (PPP), despite its flaws, will help thousands of businesses and nonprofits across the state, including dozens of CDCs (and other nonprofit organizations) who have (or will) received funds to help stabilize their operations during the crisis and to avoid layoffs.  More than 47,000 loans totaling over $10 billion were made in Massachusetts in the first round and we expect to see similar numbers in the second round.  Unfortunately, the program has not done enough to support very small businesses and businesses of color and this needs to be addressed both in the implementation of Round 2 and in future small business relief efforts.

    • Community Development:  Congress provided an additional $5 billion in Community Development Block Grant Program (CDBG) resources that can be used for a variety of purposes, including emergency grants to small businesses.  Indeed, several cities across the Commonwealth have already begun to offer such grants using CDBG dollars, including Boston, Worcester, Cambridge, Northampton and others.

  • Eviction & Foreclosure Moratorium: The legislature has passed, and Governor Baker has signed, a strong eviction and foreclosure moratorium that will protect residential tenants, homeowners and small businesses during the health emergency.

  • Housing assistance: Governor Baker was able to secure $5 million in new funding from MassHousing to provide an immediate boost in funding for the RAFT program, which helps lower-income households cover their housing expenses.  Several cities are also using public and private dollars to help tenants pay their rent.

  • State Small Business Assistance: Governor Baker secured $20 million for emergency loans to small businesses.

  • Mortgage Assistance: Mayor Marty Walsh secured commitments from 12 mortgage lenders in the City of Boston to provide borrowers impacted by COVID-19 with forbearance on their loans.  Meanwhile, state and federal banking regulators issued guidance encouraging lenders to provide forbearance and other relief to homeowners.

The above actions represent good progress, but there is more to do.  Clearly, the federal government needs to lead the way because it can provide substantially more money than local or state governments. We are advocating with our Congressional delegation on a range of issues related to small business support, affordable housing and community development.  We have also issued an updated version of our policy recommendations for state policy makers.