The swelling ranks of unemployed Americans and images of shuttered shops and empty streets have presaged a brewing real estate crisis, Bloomberg Businessweek reported. About $81 billion in commercial rent comes due in a typical month in the U.S. The delay of a sizable portion of that will put an enormous strain on the complex systems for financing real estate and highlight how quickly the pain caused by social distancing has spread. Just 69 percent of renters paid their rent by April 5, according to data from 13 million units published by the National Multifamily Housing Council, compared with 81 percent who paid by March 5, providing an early look at how bad things could get if job cuts continue and households blow through savings. In one scenario, renters would need $96 billion in payment assistance over the next six months, according to an analysis from the Urban Institute. It won’t be much better for homeowners. Roughly 15 million households — about 30% of mortgage borrowers — could miss payments if the economy stays shuttered through the summer, according to Mark Zandi, chief economist at Moody’s Analytics. So far the local, state, and federal governments have responded by imposing temporary bans on foreclosures and evictions, dulling the short-term impact of the economic shutdown in the hope that social-distancing efforts ease later this spring and consumers and businesses get back on track. Those measures won’t be enough, though, if the economy doesn’t rebound quickly. “The initial thinking behind it seems like it was that this is going to last a month or two, and things will go back to normal,” says Tomasz Piskorski, a professor at Columbia Business School, who favors forgiving some interest payments for affected mortgage borrowers. “It buys us some time. But it’s going to take months or years to get back to a new normal.”
