The AP has a story up today about the impact of the CRE crisis on apartment complexes. They note that the number of multifamily mortgages in foreclosure is up 1800% over the past two years. With mortgages on the complexes sinking underwater, owners are just up and walking away.

There was no heat or hot water, so for weeks Mary Fountain would fill a bowl and put it in the microwave, then strip off her extra layers to sponge herself clean.

Upstairs, her longtime neighbor, 70-year-old Gearaldine Davis, peers skeptically out at her balcony, hesitant to step onto the cracked concrete. The last time the city inspector came by, he told her he was afraid to walk out there.

This Bronx apartment building, where city housing violations have increased from 82 to nearly 600 in 16 months, is among thousands of rental properties from Los Angeles to Harlem showing a creeping decay as housing values collapse and funds for repairs dry up.

As landlords find themselves owing more than their properties are worth, some have simply walked away, leaving garbage to pile up. Others have disappeared into bankruptcy, with unpaid utility bills. Some have tried to reduce their losses by neglecting basic maintenance.

How long can this go on? What happens when suddenly apartment complexes have no owner because they've walked away? In 2005, there were 24.5 million apartment units in the US, which means that the current foreclosure rate is something like 1.4%. All that it takes is one abandoned home turning into a crack house to pull down an entire neighborhood. Imagine how much fun it will be when it's not a single house, but a 100 unit apartment complex that we are talking about.