Chicago, IL – U.S. Representative Judy Biggert (R-IL-13) today welcomed House Financial Services Committee members to a field hearing at the Dirksen Federal Courthouse in Chicago entitled “Commercial Real Estate (CRE): A Chicago Perspective on Current Market Challenges and Possible Responses.”  Biggert, Ranking Member of the Subcommittee on Oversight and Investigations, hosted the hearing to examine recent turmoil in the CRE market, discuss the role of federal regulators, and explore solutions designed to address continued market weakness in Chicago and around the nation.  She issued the following statement:

           “Thank you all for coming to today’s important hearing.  I want to thank our Subcommittee Chairman, Congressman Moore, for holding this important hearing in Chicago and for his tireless efforts to restore stability and growth to America’s financial sector.  And I must thank Chief Judge James Holderman for his hospitality and for allowing us the use of this courtroom for which to hold today’s hearing.

           “As you may know, Chicago represents one of the nation’s largest and most important commercial real estate markets.  It also is home to key participants in the credit, securitization, and mortgage markets.   Unfortunately, our once vibrant commercial real estate sector is also emblematic of an increasingly troublesome national trend in which commercial real estate continues on a steep decline, even as other markets begin to approach stability.
 
           “As a result, our city’s economy continues to suffer under the weight of rising commercial foreclosures and increasing rates of delinquency on commercial mortgages and construction loans.  In Chicago, delinquency rates on commercial mortgages rose to 6.7 percent during the first quarter of 2010, compared to 5.6 percent nationally, ranking it 12th among large U.S. metropolitan areas.  

           “What many don’t realize is that -- just as with the residential foreclosure crisis -- the collapse of credit and stability in the CRE market can have a devastating impact on our local economy and our communities.  Shuttered businesses, vacant storefronts and dilapidated rental housing are just the beginning.  Warehouse, office, and industrial properties that once flourished with commerce and provided steady jobs have become a drag on economic recovery.  That is why it is so important that we examine the trends here in Chicago, explore the causes behind the collapse, and find solutions – be they regulatory, statutory, or even voluntary among industry participants – to restore the flow of credit and restore productivity to our commercial properties.

           “At today’s hearing, we will hear from Chicago’s industry experts from the real estate, banking, and securitization sectors, as well as federal regulators, including the SEC, the Fed, and the FDIC.  I want to identify those crucial areas where the market is most vulnerable, and examine solutions that will strengthen our system without putting taxpayers on the line for future bailouts.  I also want to hear how instability in the commercial real estate market has contributed to Illinois bank closures and illiquidity, and what should be done to restore the flow of credit.  These are critical questions that will inform the debate we are having in Congress about regulatory reform and tax policy, and will help us as lawmakers to craft policies based on the facts on the ground and not political ideologies.  It also will help us end the “disconnect” between what is said in Washington and what is done on the ground.

           “With that I would just like to once again thank Chairman Moore for working so diligently to make this hearing happen, and our local witnesses for being here today.  I look forward to working with all my colleagues on the Committee to break down existing barriers to stability in commercial real estate and put Chicago firmly back on the road to economic recovery and job growth.”