During this period of COVID-19 Crisis, the question of “Does NAR really support commercial real estate?” has surfaced. NAR’s Erin Stackley responds.
Some commercial REALTORS® are beginning to question whether or not NAR supports commercial real estate as feverishly as residential. Members have brought up that some positions on issues before Congress help residential real estate, but hurts the commercial real estate industry. In a response to a member’s question, NAR’s Erin Stackley, Senior Policy Representative for Commercial Issues tackles that notion.
This pandemic has wreaked havoc on our economy and our communities. The commercial real estate industry has been especially hard-hit, with some sectors in it – notably retail, restaurant, and hotels – taking massive losses. These threaten to disrupt the entire economy if not addressed, which is why NAR has been at the forefront in Congress calling for further aid and relief specific to the commercial real estate industry. NAR has been working closely with our commercial real estate affiliate organizations – CCIM, IREM, SIOR, and RLI – to ensure that their voices and expertise are included in all of these efforts.
NAR supports extending the additional $600 federal pandemic unemployment assistance for multiple reasons. First and foremost, it has helped thousands of Realtors® struggling due to loss of business or employment as a result of the COVID-19 pandemic. NAR strongly advocated for independent contractors to be eligible for PUA, and when they were included it was a big win for the industry. Additionally, the unemployment assistance has helped millions of Americans who are temporarily unemployed cover their living costs, including making rent payments. Without the additional assistance, many more multifamily property owners would be struggling to pay their mortgages due to loss of rent as a result of the high unemployment rates. In addition to these efforts, NAR is advocating for a federal rental assistance fund, which would provide help to tenants impacted by COVID-19 specifically for rent, further protecting multifamily property owners and renters alike.
NAR has also advocated throughout the pandemic for federal relief specific to commercial real estate. These issues include:
NAR successfully advocated for independent contractors to be eligible for PPP loans, which has provided aid to Realtors® and their commercial clients alike during the pandemic. NAR also pushed for amendments to the program to make it more responsive to the needs of small businesses (notably, lowering the percentage of a PPP loan that must go toward payroll costs to be eligible for forgiveness, freeing up more funds for other expenses such as rent or mortgage interest payments).
Additionally, we are advocating on the Hill for a more streamlined forgiveness for PPP loans under $150,000, and second-round PPP draws for businesses that are most in need. Although the program is not perfect, PPP has served as a lifeline for millions of small businesses, including retail and restaurants, forced to close due to the pandemic. Extending and improving the program has been a top priority for NAR since day one.
NAR has also aggressively sought relief for commercial borrowers impacted by the crisis. NAR is a member of several coalitions with other industry groups working to find solutions to the problems faced by restaurants, retail, and the office sectors, including the U.S. Chamber of Commerce, the International Council of Shopping Centers, and the America Hotel and Lodging Association, the Real Estate Roundtable, the National Restaurant Association, the National Retail Federation, and the Commercial Real Estate Finance Council.
We have asked for regulatory relief and assistance for the commercial real estate industry and commercial mortgage borrowers from the Treasury Department, the Office of the Comptroller of the Currency, the Federal Reserve, and the IRS. Through these efforts we were able to secure confirmation from the banking agencies that CMBS borrowers are eligible to work with their lenders to seek better loan terms and adjustments to help them through this time and neither they nor their lenders will be penalized.
Further, NAR supports H.R. 7809, the HOPE Act, which provides economic support for the commercial real estate market through the creation of a federally-backed lending facility to help CMBS borrowers hurt by the pandemic.
NAR successfully advocated to extend the deadlines for 1031 like-kind exchanges and Qualified Opportunity Zones to account for delays in these deals caused by the pandemic, giving those who began such deals before April 1st through July 15th to meet those requirements.
Finally, NAR is looking ahead at what the long-term impact of the pandemic will be on real estate generally and the commercial sectors specifically. NAR is updating our 2015 study on 1031 like-kind exchanges and their impact on the U.S. economy, along with commissioning work to highlight Opportunity Zones and how they can assist with rebuilding communities. We are considering avenues of regulatory relief to help commercial borrowers have more access to capital, along with how behavioral changes tied to the pandemic may impact the way we utilize and develop office space, retail centers, and other commercial properties.
While businesses must limit their operations or close entirely to protect the health of the public and comply with safety regulations, most are unable to keep all of their staff on full salary. The unprecedented circumstances have required unprecedented solutions, but the additional pandemic unemployment assistance is temporary. NAR is focused on supporting policy solutions that both meet the needs of the individuals - the NAR members, their family, the business owners and tenants they work with - and also create an environment in which businesses remain solvent and are there to participate in the economic recovery. We will continue to be the leading voice for real estate in Washington, DC and around the country, and are dedicated to finding solutions and assistance for all our members and the country as a whole.
Senior Policy Representative, Commercial Issues
National Association of REALTORS® Washington, DC