Heck and Taylor Lead Bipartisan Letter to Prevent Foreclosures and Protect Jobs
WASHINGTON, D.C. – On Monday, Congressman Denny Heck (WA-10) joined Congressman Van Taylor (TX-03) in leading a bipartisan letter to Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome H. Powell, urging them to take steps to protect the commercial real estate (CRE) market, especially businesses with Commercial Mortgage-Backed Security (CMBS) debt, and the hundreds of thousands of Americans they employ.
“We write to express our concern about the looming crisis in commercial real estate adversely impacted by the COVID-19 pandemic, including the $540 billion Commercial Mortgage-Backed Security market that, if left unchecked, may lead to a wave of foreclosures, exacerbating the current economic downturn and ultimately, resulting in permanent job loss throughout multiple industries and communities across the country,” wrote the 105 bipartisan members.
The letter, which was led by Congressmen Van Taylor (TX-03), Denny Heck (WA-10), Andy Barr (KY-06), and Al Lawson (FL-05), calls on the Department of the Treasury and the Federal Reserve to consider targeting support to address the significant challenges facing commercial real estate borrowers created by the COVID-19 pandemic.
“Nearly half of commercial rents were not paid last month, and many businesses will not be able to pay rent for the foreseeable future,” said Congressman Denny Heck. “History shows us this will likely result in a wave of foreclosures, massive layoffs, and less revenue to already cash-strapped state and local governments. We must do everything we can to protect the broader economy from this devastating chain reaction.”
“Millions of jobs depend on the strength of the CMBS market,” said Congressman Van Taylor. “For example, 8.3 million jobs throughout the United States and more than 600,00 in Texas are supported by the hotel industry alone. These industries don't need a bailout, but they do need flexibility and support to keep their doors open, provide millions of jobs in communities across the country, and drive their local economies.”
“COVID-19 is causing many of our industries to experience major financial hits, and the commercial real estate is no exception,” said Congressman Al Lawson. “Without immediate action from our financial institutions, we may see unrecoverable losses to these businesses. We are asking Secretary Mnuchin and Chairman Powell to take necessary measures to ensure this industry has the capability to survive this global pandemic.”
The commercial real estate market consists of industries including retail, multi-family housing, hotels, industrial, and commercial property. These industries support millions of American jobs. Businesses across the country who have been hit hard by the COVID-19 pandemic have experienced significant revenue declines, making it difficult to meet monthly debt obligations including rent. While Congress and federal agencies have provided support to many businesses experiencing financial hardship, the existing programs do not fit the needs of the commercial real estate market. This letter calls upon the Federal Reserve and the Department of Treasury to consider aiding the commercial real estate market in order to prevent a chain of failed payments that will exacerbate the current economic crisis.
The PDF of the letter can be found here.