CARES Act Impacts on Transportation, Institutions, Real Estate, Energy and Federal

The CARES Act is vital to sustaining our nation during this time of uncertainty. CARES will provide critical relief to states, businesses, and individuals who are now managing the economic challenges created by this global pandemic.


VHB is here to help you navigate. We are listening to our clients across all our markets—transportation agencies, developers, energy providers, hospital systems, and higher education institutions—and we are working with municipalities, as well as local and federal agencies, to understand the impacts of the pandemic and the resources available to support and sustain operations. We are working to support and advance critical projects and investments in our communities.


Following are key insights into the CARES Act and its impact on various markets.


More than $35B in aid from the CARES Act is designated for the transportation market–helping to support and provide relief to a national mobility network. Like other markets, aid is mainly focused to support operating costs to keep workers employed, maintain service, and help compensate for lost revenue due to COVID-19. Unlike the 2009 American Recovery and Reinvestment Act (ARRA), the bill does not fund stimulus-related projects. However, ongoing discussions around a broader transportation-focused stimulus bill to help the transportation market further recover from negative impacts continue. During this time, transportation owners and operators can refine longer-term priorities and planning efforts, as well as examine the potential of accelerating their capital programs while ridership numbers are low.

Highlights of how the U.S. Department of Transportation is dispersing CARES Act funding include:

Aviation—The aviation industry continues to take a major hit from COVID-19, with several airport clients down more than 20 percent and decreases ramping up. Airport projects driven by PFCs and airline landing fees will see short-term slowdown; however, CARES Act funding will alleviate these impacts through 2020.

  • $10B allotted to Federal Aviation Administration Airport Improvement Program (AIP) grants to maintain airport operations stemming from the significant drop in revenues at airports.

  • $100M slated for general aviation airports and hub airports that receive funding. These airports must continue to employ at least 90 percent of their employees.

  • At least $500M is available to increase the Federal share to 100 percent for grants awarded under the fiscal year (FY) 2020 appropriations cycle for the FY 2020 AIP and FY 2020 Supplemental Discretionary grants.

  • At least $7.4B is available to Commercial Service Airports.

  • Up to $2B is available to large-, medium-, and small-hub airports and non-hub primary airports for any purpose for which airport revenues may be lawfully used.

Addition information is available on the FAA's CARES Act Page and Airport Grants Presentation.


Transit and RailMass transit has seen a sharp decline in ridership, with participant systems declining near 90 percent. The CARES Act is providing U.S. transit agencies with their largest aid package ever—$25B, which will help keep workers employed the next year.

  • Approximately $25B allotted to the Federal Transit Administration (FTA) for operating and capital expenses associated with COVID-19 response—$22.72B to urban areas and $2.2B to rural areas.

  • $1B allotted to specifically support Amtrak’s operations, helping to alleviate revenue losses, including $492M towards the Northeast Corridor (NEC) and remaining funds toward protecting employees, as well as overall support to Amtrak’s remaining national network. Funding is also being provided to cover state contribution for state-supported routes.


The most significant impact in the institutions market is provided to the healthcare sector ($127B), with $100B to support COVID-19 response and treatment. Other funds support personal protection equipment (PPE) purchase, vaccine development, telehealth, and rural/community healthcare efforts.

A portion of this funding can be used for development of temporary facilities, such as medical tents or dorm and hotel conversions. FEMA and USACE are ramping up efforts in this area and CARES allocates $1.5B to creating triple-bed capacity in military hospitals.

CARES also directs an initial appropriation of $27B, administered through the U.S. HHS, to fund vaccine development and improve surge capacity, with $16B supporting Strategic National Stockpile (SNS) development. This is a four-year-plus program that includes construction of facilities related to COVID-R&D and advanced manufacturing facilities. The roll-out of this program is currently unclear; however, it may present opportunities for life science owners and university academic medical centers (AMCs).

Additionally, the National Science Foundation (NSF) and the National Institutes of Health (NIH) will receive almost $1B to support COVID research. This is meaningful support to clients with major healthcare research programs. Greater research dollars equate to more researchers and the need for state-of-the-art research labs (many of these have been closed due to COVID precautions).

CARES provides limited impact on higher education, generally, contributing 1 to 2 percent towards operating expenditures. Higher education facilities lobbied for $50B and received $14B. At least 50 percent of the $14B directed to higher education must go to student aid. The current round of funding supports and/or backfills such items as parking/transit/auxiliary operations. States will receive another $3B to distribute to higher education/K-12 schools, as necessary. This funding is largely directed to the public sector.

Public sector education clients who rely on a greater level of state support remain focused on impacts associated with decreased tax receipts. This will likely be a 2021-2023 issue.

A potential fourth phase of stimulus funding may have more significant impact on institutions, with current proposals considering greater support for healthcare and education.

Real Estate

Retail center owners are assisting tenants in applying for financial relief through programs administered by the SBA. The PPP Act will provide retailers with the much-needed cash flow to cover rent and payroll costs. Retailers can apply for funds through four programs, including the PPP, EIDL, SBA Bridge Loan and Disaster Relief.

Retail center owners are uncertain about when the federal money will be sent to tenants, and some are considering forbearance. In the short-term, center owners are focused on maintaining operations and keeping their centers open to support grocery stores and restaurants with curb side pick-up programs. Many owners are not negotiating rents with current tenants or pressuring them into meeting rents while operations have been shuttered.

PPP loans has a requirement that 75 percent of the loan be used for payroll, and some small “mom and pop” local owners don’t have enough employees to qualify. Small stores and restaurants need money to cover loans that they have for equipment and facility improvements. In some circumstances, these smaller owners don’t pay themselves a salary, and it may be hard to document past payroll. Larger restaurants and retailers can tap into the loan and use funds for other business-related expenses, but that portion of the loan will not be forgiven.

Real Estate Financing—The CARES Act seeks to provide protection against foreclosures and evictions. Foreclosures are prohibited for any mortgage loan purchased by Fannie Mae or Freddie Mac and any borrower that is experiencing financial hardship due to COVID-19 may apply for and receive forbearance on that loan for a certain period of time. Landlords with mortgages that are insured, guaranteed, supplemented, protected, or assisted by HUD, Fannie Mae, Freddie Mac, are temporarily prohibited from eviction filings or late fees or other penalties for nonpayment of rent. The CARES Act requires forbearance for Freddie Mac and Fannie Mae loans, but not all other lenders are required to give forbearance.

The CARES Act doesn’t have any infrastructure benefits that developer clients and local municipalities can use to support new development providing jobs and new economic development.cutback.


Currently, the CARES Act does not provide much direct relief for the renewable energy sector, and delays to clean energy projects are expected due to COVID-19. These delays will be attributed to workforce shortages, supply chain impacts, and missing project deadlines needed to capture tax credit incentives currently in play. However, the International Energy Association is advocating for renewables to be a part of the President’s Phase 4 stimulus package.

Similarly, no direct relief in the current CARES stimulus package was provided to the oil industry. The price of oil continues to drop while supply remains high, leaving companies severely impacted, with a long road ahead. This scenario will also directly impact the renewable energy industry. As oil leaders continue to get hit hard, they are likely reluctant to invest in cleaner forms of energy generation or smaller start-up clean tech firms.


U.S. oil producers are continuing to drastically cut-back major capital spending efforts from what was projected for 2020. As an example, BP was one of the last to provide its cutbacks and has identified $12B, a 25 percent cutback.


A significant amount of CARES Act funding is going to federal agencies and is directed to increased hiring in select federal agencies—U.S. Department of HHS and FEMA—for cleaning, PPE, and increased telework, network, and software capabilities. There is a significant focus on maintaining productivity of federal employees. CARES Act funding covers overtime pay for federal workers responding to COVID-19.

A majority of A&E dollars are being funneled to FEMA, USACE, and the General Services Administration (GSA) for maintenance and infrastructure purposes. States will get a significant influx of money, but there may be limitations as to how it can be used. Federal agencies are working to make certain telework and network capabilities are sufficient to keep operation going.


Currently, state funding can only be used for costs directly related to fighting the virus and joblessness, not necessarily other spending and government contracts. Also, important to note, small businesses are a focus of the bill and restrictions for contracting with small businesses will be removed and less sole-source justifications necessary.


Additional workforce and procurement flexibility coming with disaster/emergency declaration are likely to result in accelerated contract awards.


Key highlights:

  • GSA is receiving $300M, which can be directed toward “unanticipated space requirements” and another $275M for the GSA Federal Buildings Fund to acquire or improve property. The bill explicitly states these actions WILL be subject to NEPA Act.

  • Department of Homeland Security is receiving $46B for FEMA Disaster Relief.

  • USACE is receiving $70M for Operation & Maintenance and expenses. USACE is being tasked with infrastructure protection and emergency repair, critical infrastructure reestablishment, engineering services and construction management.

  • USDOTs—as noted in the transportation market discussion, $30B in CARES Act funding is allocated to transit providers and airport operations.

  • Relative to Federal Lands, there is major focus on the Bureau of Indian Affairs due to their health focus for that community.

    • Outside of the Bureau of Indian Affairs, the Bureau of Reclamation is receiving $12.5M for “water and related resources”. The Secretary of Interior will be directing $158.4M as necessary for biosurveillance of wildlife, environmental persistence studies, and other response, mitigation and recovery activities.

    • The Forest Service will receive $3M for Forest and Rangeland Research and $26.8M for capital improvement and maintenance.

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