Purely as a thought experiment, if we suspended mortgage repayments for N months and rental payments for N months, what bad (or good) effects might we see?
Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages. Mortgage-backed securities go into default. Anyone with lots of exposure to mortgage-backed securities folds. Their counterparties in all sorts of financial arrangements can't collect (insurance, bonds, you name it). Credit markets dry up, and all the Main Street businesses that are rolling over some of their debt find they can't borrow, so they file for bankruptcy. Normally, they'd take out loans to make it through bankruptcy and restructure... but no loans are available, so they liquidate.
EDIT: worth noting that this is less likely now than in '07-'08 because the Federal Reserve has been buying up bonds like crazy (that basically means financial institutions, governments and businesses are often able to get unlimited cheap credit) but if they scaled that back or stopped doing it, things are already so bad there would've been a credit crisis in March or April without a national rent/mortgage freeze. So imagine how much worse it would be with one.
Or suspended and never paid?
But I said in my question: "if we suspended mortgage repayments for N months and rental payments for N months"
Landlords are not paying their main cost (the mortgage) so why do landlords go broke? They have some fixed overheads but those are usually a few % of the mortgage.
The mortgage lender was counting on receiving the mortgage payment in May 2020, not in May 2045.
This obviously ignores the issue with massively leveraged firms making poor bets on housing bonds. But lets be real, they'll get bailed out if there's any problem.
While the default rate increased in some areas, it was in no way universal, or as high as we see today in the retail property market. Also (currently) the property backing the mortgage has retained its mortgaged value. So these are not that similar scenarios
It is often the case that renting is quite a bit cheaper and always the case that it's more flexible to do so, which is why a lot of people choose to rent instead of buying. Society benefits when people who wish to rent housing have housing available for lease.
The leasor turns their large investment into a stream of payments, and the leasee turns their stream of payments into use of a large investment without having to make such an investment and without needing to have the capability to make that investment.
Avoiding making a large investment in property makes it easier for the leasee to move if needed, since there aren't significant costs to unwind a lease like there are to unwinding property ownership.
(On a much more minor note, there are not more housing units (about 140M) than people (about 335M) in the US and probably not in the world; though that's literally what you claimed, it's probably not what you really meant to claim. Taking the most charitable re-interpretation of your claim: there are slightly more housing units than households (about 140M vs about 130M) in the US. See above about the prediction that many of these housing units likely not existing [or continuing to be offered/maintained] if rent were outlawed.)
Rent gives you greater location flexibility and less commitment to a specific place and building. You don't have to maintain it yourself, and you are freed from the mental load of having to do long-term planning around it at all. Not that it's necessarily good for the surrounding community, but to some degree, renting gives you the luxury of "driving it like you stole it" and that's a real value for some people.
I own my house. When plumbers dumped water in the basement and destroyed a floor, that was my problem. Renters pay for that kind of stuff to be someone else's problem.
On the other hand, I'm not sure why the service of removing risk from home ownership is good (or why it couldn't be separated into ownership and property management.) In the paradigm you're proposing, the renter wants to be insulated from the risk of property damage or adverse effects on the home they purchased. And the price they're willing to pay for this is... 100% of the equity of the place they live in?
People often dread working for others, but still do it because the risk and difficulties of running a business themselves aren't worth the ability to easily change jobs/roles/location that working for someone else allows.
If you own a house or business, if something goes wrong, you have to fix it, or sell the asset so it's not your problem anymore. If you rent/work for someone else you simply move/work somewhere else.
Preferring a better option doesn't mean much unfortunately. To go with a variant on a crass old joke "I would rather be paid billions to sleep with an endless line of beautiful women than work retail but they aren't hiring for that position unfortunately."
https://www.biggerpockets.com/member-blogs/7172/46252-what-i...
The rents are given locked in periods which change vs the potential real swing in value. It is a "futures contract" sort of situation. If sales at a location increase tenfold over others of comparable nichw and expenses rent raising relative value compared to comparably priced competitors then the landlord cannot instantly raise rent for the contract period. They effectively got stuck renting "undervalued". This situation is a reverse of sorts - the income is down but the price is locked in so the retailers are paying for overvalued rent.
This leads to a bit of rent hardball as the retailers can "call their bluff" as they know if they were evicted they could not be replaced with anyone willing to pay the old value and try to force concessions.
There are a lot of bank loans using a real estate asset as collateral - those would now be significantly riskier for the banks to hold, so new loans would probably stall and/or become more restrictive, slowing growth.
Municipal services would start to take a hit next, since a lot of the property taxes go to things like schools and waste disposal.
On the flip side, people not paying their rent would have more money in their bank accounts to cover an unforeseen medical bill. I doubt retail would increase by that much if quarantining was still in place, though.
I don't understand what you mean - banks issue millions and millions of mortages.
Yes to halting the entire chain (mortgage included）but maintaining the interest.