How to Repair America’s Broken Housing System — with Dr. Jenny Schuetz
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Episode three hundred and twenty five, three two five is year ago, covering parts of west central taxes in one hundred and twenty five, the world's first motel open. True story. Last week, I checked into a western hotel and I asked that the point be disable dialectic me and said, it's just regular porn, you sick fock. Go, go, go.

Welcome at the three hundred and twenty episode of the property part in today's episode we speak with doctor Jenny shuts the national now economist, author and policy expert on housing and land use ah we discussed with Jenny trends and structural shifts occurring in the housing market, america's broken housing system along with policy solutions OK commish might be determined big later.

Elon mosques I like to calm the first lady alania in the days leading up to the election elon moss growth on eggs that he will be fired soon. I great we have a guy, uh, who is addicted to anon associated drug determining any trust and F, T, C regulation that make sense that that totally makes sense. Uh, both republicans in some hyper file democrats, including red hot man and mark cuban, have openly critical action, her pushing a far of changing and using F, C, power to grass away the time.

SHE has a lot of ethnical cons, a rubber cons SHE like my gates, some unlikely fans on the right, and she's everyone's. Md, a big tech right now. Few bike partisan issues. One of them is wanting to break up a punish tech, although get their shit together. I do that.

He feels if the only things that the far left, the far right can agree on, and get the five or six centuries people to come along with them on as one anti emetic. And the far left and the far right of both antic and two reckless spending seven trillion dollars and expenditures on five trillion in revenues. Imagine the U.

S. Was a household making fifty thousand thousand year, spending seventy in our death, three hundred and twenty thousand. I don't worry, we get to keep cracking up dead because they keep sending us more and more credit cards, at least china as or overseas investors, and get what when we die, we're going to buy the champagne and coke.

We going to live large, but our kids get to inherit the household debt. Well, that is what we are talking about now. Anyways, little script.

Meanwhile, trans transition team is tapped the ana tracor gales later to help determine cons potential successor. I thought lena was going to survive this. I thought IT would kind of soft in his image.

She's got done a lot of work. I don't think he's going to have the patients to understand things like numbers and concepts and legal jargon. No joke.

In the first administration, when people were coached on how to present, they would say fewer words, more pictures. I just don't think it's going to have the staying power here. Maybe he'll handed over to j van j vans could probably do something here.

But what is that they want from her? I don't get that. Oh, they want a clu B2Crat. They want, they want heard to back the fuck off if you made a campaign contribution, if you said nice things about him and you send money and fine, you can do whatever you want, including consolidate the industry and driver Prices, which will be inflationary.

Folks, by the way, the most deflationary thing we could do right now would be one to kiss the makeup for china and two to break up big chicken, big farmer, big egg. Big tech is pretty simple. When there's two or three players, they figure out away to charge higher rents on consumers.

Notice how airline tickets of skyrocket last years. why? Because there's basically two or three big airlines now and they kind of wit each other. And corne is such that they can jack up Prices.

If you notice that every fight has fall for about the last five years, they keep taking out supply and then they wake at each other and they don't create more supply. why? They will create pricing pressure.

And to see us with these companies who took about one hundred or hundred fifty million dollars compensation, propane mic, and then cried, cried poor when the pandemic came along and said that we're all in this together until the market is booming again, and then it's, and then it's free market capitalism. And I should make one hundred and fifty million dollars when I paying my flight attended seventy eight thousand dollars year anyway, another tark show who's on the list of candidates that slater assembling. Reportedly, the list includes former justice department attorney mark meter, meter, meter.

It's not mark matter. I know that it's mark matter with an r probably entirely different person with a different completion and personality. George, our professor, todd is a wiki.

Don't know todd, don't know. Professor is a wiki that's pretty awesome name. No, alex kolia R A partner more than Foster, as I like, called mofo and F T C, two republican issue ers.

Millia holistic and Andrew focus on jesus crist. I'm bored. I'm bored listening to this.

Should are we going to have to cover the fuck and truck cabinet for the next two or three weeks? Can you just start imposing tears, by the way, with the shocker he wants to raise tears on mexico, who, by the way, has become a lot more important, think it's become our biggest trading partner or biggest, biggest import of the country. We now import the most from which really interesting about traitor.

I find that really interesting. And this so was boom away with my colleagues. Pana did the study on trade.

You found that trade is a functional approximation that, generally speaking, almost every nation in the world, the biggest trading partner is when they share a border with, I guess, transportation kind of gets in the way. Or, you know, people intermarry and have no people over there, and they develop business relationship. Sages struck me in the digital age, proximities still the primary driver of trade.

Anyways, this is, we are about to a trade war. He's talking about a massive deportation force. Just have you seen these people that are lining up? The deportation force is literally like OK.

What happens when you're bullet in high school and you finally get your revenge on people? These people just seem so fuck and angry. This is really not.

But let's take inflation. And how do we reverse in your inflation? I know. Let's reduce competition. Okay, we're doing that.

We're going to really in a on, let's make our imports more expensive, okay, we're doing that and and let's find our most flexible, agile workforce and terrorized them and make IT such that environment. Ts don't want to come and and here's the dirty secret. The migrant problem is out of fucking control.

And the asylum system that was set up or exploited under the by administration was unforgivable, and was probably reason that animal SHE lost one break in a blue wall. This was handled incredibly poorly for last thirty years, and especially poorly the last four years. However, however, when no one wants to sell loud is an immigration while being the secret uce of america, the most profitable part of immigration is illegal immigration.

They can make crimes, allow ate, and they're so worried about getting caught, they know, call the fire police department. They will use our services to hospital and what do they do? But they also get to pay taxes. They pay their taxes.

And then when the work at the crops, when the work dries up, you know, grandma dies, or or restaurants going to recession, or the crops are pick this flex for workforce heads back to the country of origin. This is literally the thing that has kept on giving a the gift that is kept on giving at last twenty thirty years. And that is the reason last forty years why no one ever gets that serious about immigration reform.

How come IT so as politicize and IT ever gets reforming? Really, really interesting of that by partition, immigration reform will actually go so probably will now so trumping take credit for the big picture with trumps return to office sectors constrained by strict any trust oversight, including tech and health care, could see a new wave of merger and acquisition activity. Ever imagine golden samory's, Sandy, starcraft banking, amis abbott sort of ma pou sa in twenty twenty five? The markets are already gone crazy.

Since the election this week alone, mega captaine companies added seven hundred and seven three million. Three three courses were in the collection market as deal makers hope trumps safety c will be more open to eminent than button. According to da from deal logic, last year hit a low for ema al targeting us companies of us twenty fifteen and this year is pace suggest even fewer deals might be going through.

All right, what's going on here? Why is the market screaming up? Is that because they think there's gonna some sort of sustainable fundamental growth and companies have we made massive investments in the products, attractive, the overseas that we figured out, more free trade that will increase when the purchase of our products? No, this is nothing but the following.

Trump is a vessel for the transfer of wealth from Young people to old people. The credit markets know IT. The ten years Spiked about the moment he was going to get elected.

The moment I knew was elected in front of mine who runs, he was a chief investment officer from milani of seventy five billion dollars hedge fn. Cognate said he's won. And I said, how do you know that? So I don't see this, said the credit markets spiking, which means they know that he's won because his policies will be more inflationary.

Trump is nothing but a vessel, actually, a bunch of things, things including, he is a vessel for the transfer of wealth from Young people to people like me. By the way, I have made to shit on our money and last four or five days, and I love IT. It's great. I'm happy for.

But guess what? My kids, my kids will. That's another story. We have to stop this war on the Young. All people keep voting themselves more money.

And Young people, middle class people, are only the impression that hate the deficit never matters. And if a guy's angry, and if a guys really offensive, he must be a leader. Let's get a strong man.

And on the fuck and far left, we have decided where self appointed social justice cobs. No, no one asked us to do that. What is america? AmErica is a platform, is a platform for two things. One, protect our borders, army, navy, air force, marines. Make sure that we are that americans are incredibly safe and that we continue to spend more on our military than the next ten biggest military spending combined.

why? Because despite what coca cola bennings eries would like you to believe, or people on the far left, the moment a group, people can come for us and kill us and take our netflix s in the space away. Be clear, they will job number one of this platform defend our shores.

Job number two, to create atmospheric and environment provides prosperity, opportunity, growth, innovation, capitalism, boom, profits, such that we can tax them at a fair rate, at a lower rate, hopefully over time, a lower rate, such that we can fund the government with an even lower tax rate because of the growth. Such sad, such sad Young people can have some fuck and hope, buying a home, forming a family, having sex, having kids and getting to the whole shooting match. What is the whole shooting match? Is not A I is not innovation.

It's not tax rates. It's not GDP. It's deep and meaningful relationships. And this guy is going to decrease continued to decrease the number of households are form.

We're going to continue to see a continue decline in birth rates. why? Because all of this economic sugar high.

Guess where it's going? It's going to the top one percent. Oh my god, the markets touching new eyes.

Guess what? Who wants ninety percent of the market? The top one percent. So yeah, it's great for me. It's great for your boss. You know who is sucks for everyone else, a vesle for the transfer of wealth from Young to old. President trump .

will be right back for our .

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Welcome back. Here's our conversation with doctor Jenny shut, a nationally on economic author and policy expert on housing and land use. Jennie is this podcast find you I mean.

my office and arnal adventures, uh, were close to downtown dc.

right? So you recently joined our ventures where you're addressing the nation's chAllenge of housing supply shortages and rapidly increasing rents and home Prices. Let's talk about this a head on, how can we repair america's broken housing systems?

Well, the policy side is actually not that complicated. We need to make IT easier to build housing and build more types of housing, especially in high demand locations. IT turns out that the tRicky part of this is the politics. We've essentially delegated a lot of control over housing production to local governments, into neighborhoods, and people who live in neighborhood often don't want to have more housing gold.

So my senses and you tell me, if this is correct, the incomes of people, our own homes have a vaster interest and not having more supply, so they get involved in local review boards and basically make a new impossible for new housing permit is out of safe thesis.

It's true that they're at least some number of in common residents who don't want more housing and don't want their neighbors ods to change. One of the questions were sort of wrapped with us. How widespread is this resistance to new housing sort of, uh in grain to believe that nib ism is widespread.

Basically everybody who agree owns a home doesn't want we're housing. But what we're starting to learn as we do more polling and surveys is that nypa asm may not be as widespread as people thought before. The nombers are loud and they're often very politically well connected, but they're often a lot of people, including longer hole runners, who understand that their communities need to grow, need to change. And so part of the chAllenge is figuring out how to tell politicians that the the median voter may actually be comfortable with more growth than they're assumed.

Yeah, I think what's happening I think a lot of people have children who are looking, who are either renting, are looking for home, and they just realized how bad it's become. What are some ideas or innovative policy solutions or economic solutions? For my understanding is it's a lot of its a supply problem. We just aren't building as many homes as we need to. What are some policy ideas that you've seen that you think might address the issue?

The sort of three buckets of policy changes that we know are likely to be effective. A one is just to make IT possible to build a more diverse set of housing types. So roughly three quarters of the land, even in major urban areas, is set aside exclusively for single family detached homes that those take up a lot of land.

They're the most expensive type to buy or to rent, and they also just occupy a lot of space. And so we have neighbors ods there built out as single family homes, and you can't add any more until you change the zoning. So legalizing everything from townhouses, accessory dwelling units all the way up to apartment buildings ads, more capacity.

And we're diversity a housing stock. We also have to look at sort things like the dimensional requirement. So, uh, legalizing an apartment building, but coping IT to stories doesn't actually make IT feasible.

So making IT possible to build taller buildings, smaller setbacks, getting rid of all street parking requirements, all of those sort of details can matter. And then probably the most important thing is actually the process. We have gone to a system where there is a lot of complex directionally approvals. Neighbor od by neighborhood gets to weigh on what gets built, provide feedback on everything from the landscaping in the design, the size of the project, writing down a set of rules that are consistent and objective, and letting developers build according to the rules without having this community engagement process that drags on forever would shorten the process and would allow more housing to get built more quickly, which means that those units can then be sold, rented at lower Prices.

Yes, I have some experience with this. First time I bought a piece of land down here in delhi, florida, and we were planning to develop on IT. And you have to go to the local review board.

And a woman shewed up and said, I don't know if I want that land developed. I walk my dog over there and know, okay, that's called trust passing. But they delayed the decision for a months or three months.

He thinks i'll meet that off and to do some sort of reviewer study based on the fact as woman was walking a dog over there. And IT is not like anyone who shows up can not not nessy kill IT, but delay IT forever. So my question is, I mean, a very reductive level.

My senses been taken out of the hands, of officials who think the picture, and put into the hands, or at least of homeowners who can have a lot of influence and just delay the shit and everything i'm done around this stuff, everything i've seen, they basically just delay, delay, delay in any objection, results in the delay of them finally issuing the permits. What can be done? Because my sense is it's very state by state, or even community by community. I, how do you address this? There are some sort of federal law, state law that expedites, you know, if you will, is a laxative to the constipation here of housing permit.

Yeah, there is a very little the federal government can do. The constitution doesn't give the federal government control over use or or zoning uh so that's a power that's held by the states and sort of what we've seen as this delegation downwards, states delegated land uce authority to local governments.

Local governments have turned kind of outsource this to the individual neighborhoods either formula informally um and so we've push the the approval process, at least the a the veto power down to the lowest level of geography and the people who are most impacted by IT. So yeah, one thing that local governments can do is just move the timing of when you get community engagement instead doing this for every single permit, every single parcel that gets change, move IT upstream to something like the comprehensive planning process. So like every ten years, the city comes together as where we want to grow, what do we want to add? And one sets written down in the plan, then you don't get to protest every single development, every project that would make things a little easier.

One trend we've seen in the last five or six years is that state governments are starting to reclaim some of the power they delegated to locality ties because states are recognizing the real economic arms of not building enough housing. You look at places like california and massi choose its in new york. The state of the economy can grow.

They can attract and retain enough workers because there isn't housing that's affordable at different kinds of income levels. And so state governments are starting to put gardens around what locality ties can do, setting quantity of targets for how many homeless they have to allow, or telling them you're not allowed to bean, for instance, apartment buildings near transit stations. So I think this is a really promising trend because state governments do have this bigger picture economic impact um and they have the power, if they want to use IT to push back against all of the local movies.

I think I heard people reference the mayors in Austin. And many apples are trying to be innovative around expanding the housing stock, the the stock of housing a. Do you know anything specifically about those who are? Can you point to other examples of where local officials have some leadership around this issue?

Yeah, those are both good examples. Many apples was the first city to legalize duplexes and triplex es in all of its residential, which is kind of a modest step, is a little bit more symbolic, uh, but they also did a lot of up zoning around their new light rail system. So it's very easy and straight forward to the apartments near the transit stations in many apples.

And we've, in fact, built a lot of apartments nearby, and that's been very helpful to providing our supply. Austin is just a growth friendly city. I was there in february of this year and their crane s everywhere they are building, building, building your Austin has really embraced the sort of change from being kind of a smallest city, college town, to being a big city in its own right. And a lot of what this is telling us is if elected officials want more housing to get build, they'll figure out ways to make that happen if elected officials don't want to to build housing, they'll figure out ways to stop that.

I noticed the same thing. One was an awesome. They have sort of growth mindset.

What about the idea? What could the chips act, be a role or be a model? And that, as they just said, we're going to provide subsidies to inspire more domestic manufacturing of key semicon inductor technology. What about just straight subsidies that say to a developer, if you figure out away to navigate these local zoning laws and build more than eight, ten, twelve units, will give you three, five, ten percent tax credit?

Mean the problem isn't that developers don't want to to build is that they can't uh and the developers don't control the development process. So there's always a worry about sumsung zing. Either demand or giving some city to uh to providers, to developers without relaxing the rules may just wind up driving up Prices even more.

Let's zoom out, give us your impressions some of the housing trends by market because people will say no, it's difficult to, I think, make save ments about housing across the U S.

Because housing and say us, I would imagine, entirely different situation than IT isn't phoenix Francisco, if you are as a as a housing analyst, what markets do you think reflect the most strength right now? The most weakness? What types of real stator asset classes are you keeping your eye on? Give a sort of breakdown a few, give us a lay of the land, but be more segmented by region and property type.

So in the last five years or so, sister, the pandemic, we've seen affordability go from being mostly original problem in the high cost coastal market is to being almost a national problem. And it's not execute everywhere we know. California, seattle, boston, new york for something like forty years have been under building and have been very expensive.

And that's just baked into expectations. Places like Austin, denver, nashville, a lot of the sun build metros have historically been really affordable. They build a lot of housing when there is more demand and Prices haven't gone up.

That sort of broke in the pandemic, and it's unclear whether that's a short term problem. Lots of people moving away from california, two places like photo x, because they could buy cheaper homes. Maybe this is going to correct itself.

The worry is that some of those places are going to become more like california of Austin. And photo x start making IT herder to build. And in the long run, they stay expensive. That can be a real problem for a lot of people.

IT is certainly still true that a lot of the traditional sort of rust belt meos, said Lewis, cleveland, pittsburg, mean housing is still objectively a lot cheaper there than IT is in most of the country. But those places are also seeing tightening. So we're seeing you know pitzer is redoing their comprehensive plan now they've seen vacancy rates and drop in a way that they're not used to seeing.

And we're trying to figure out how do we get out in front of this. So you seen this sort of geographic convergence and a sense and spill looking at sort of different kinds of of home types. The single family home building completely collapsed in the great recession.

People couldn't get qualified for mortgage developers couldn't get money to build. And so map single family permits and muti family permits, they both dropped off a clear and the great recession. Muli family has picked up a lot, and single family has just not gotten back to levels.

But IT was some of this is that you need more land to build single family. There is a lot of demand for living in the urban core where their unities and that there you're going to be building more multi family, but someone that also seems to be that it's just harder for people to qualify from organs and IT used to be. And so there's a less building of single family that's designed for especially entry level hooo nerves.

Do you think that Young people not being able to pursue the american DRAM is leading to our polar ization in dissatisfaction with a life in america?

IT definitely doesn't help. When I talk to people under the age of forty, they are really pessimistic about their ability to buy a house in a neighborhood d that's close to jobs and amenities um and you know people are just sort of resigned. I'm going to be a winter forever, which isn't necessarily terrible, right?

If there is a good quality rental housing in neighborhoods that you like, being a renter allows you to be more flexible to move some place for another job. But we're so conditioned to believe that sort of part of becoming an adult, uh, is buying a house and having part of the american dream and building wealth. And so people who feel like that's not going to be a possibility are really embittered and not feeling like this system is working for them.

Do you think we need to break out of this kind of that guys that you've failed as an adult or you know not that successful unless you own my podcast co host on my other pod rating moderates. Tes is successful. SHE on her husband made really good money.

They live in new york and maybe made the conscious decision to leave their money in the market. Is opposed to put IT you buying a very expensive place and try back or whatever because they have said the yield is this is not economic. It's a Better deal to rent than to buy. Do you think we just need to change in mentality or mindset?

So I think we should be a lot more honest about the financial risks and downsides of owning you. There's a long tradition among our elected officials from both parties of pushing this idea that hooker's is the american dream, and we should get people into home otherness as quickly as possible and renting a sort of second class status.

I will say that for a lot of people, the the biggest benefit of hookers ship is not that you're gonna a build a ton of wells through the equity, but that you have stability and predictability of your housing payments for a fairly long period of time. So if you rent every year, when your raise rules over the lamborn can raise the grand if you own the principle and interest on the on the mortgage are fixed over generally thirty years. One of the things that's coming up there with climate change is the property insurance and property taxes are going up faster because local governments have to pay for a lot of these repairs and insurance companies are raising rates pretty quickly.

That leaves home ownership a little bit less attractive as just a sort of stability of your housing payment system. Um you know it's really important that before people buy a home that they look at wherever they could be investing their money in a lot of markets, particularly these sort of midwestern cities, the stock market would have performed Better than putting your money in real estate and having IT all in the down payment. It's inherently risky to invest all of your savings in one piece of property, in one location, in the same regional job market where you work. So there's there's a lot of risk involved, and we haven't really been that up front with people about IT.

And generally speaking, looking at the yields or the ratio of renter ownership is IT generally speaking, Better to rent now across the nation or have rents kept pace with the same escalating tion at home .

Prices that really varies across markets? Um so places like Austin that have built a time of housing rent inflation topped out during the pandemic and has slowed and some of them are actually seeing soften of friends. You might able to get, say, one or two months free rent when you sign a new lease. But in places like california and new ork that have not built enough, housing rents continue to go out much faster than income. So it's still the case that home otherness is a Better deal financially in some markets than others.

And what about in these kind of climate affected areas where people can get insurance? How is that impacting the housing market?

We're just starting to see that now florida is certain in ground zero for this. Uh, insurance premiums are going up on old occupy properties and going up on rental properties. So lamborghini ving to pay higher rates as well. In some places, people are gona have a hard time getting insurance at all, or the insurance is not gone to cover the full replacement cost if there is damage. Here, we are seeing some people who just choose not to have insurance. So if you don't have a mortgage, ge, nobody forced you to buy property insurance, and you may just go without uh, we see unfortunately a lot of that among some of the older mobile home parks um because people don't have they don't have a mortgage, they don't have to have insurance, but then they have nothing when a disaster strikes. We may also see some wealthy people who just choose to fully self ensure, if you have a lot of money saved and you really want to live close to the ocean, you might be willing to live there and just accept that you're going to have to rebuild your house from time to time and .

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So back in twenty twenty two, you spoke with us reclined about how progressive state struggle more with homelessness. Why do you think that is? And why having things change? You just I me just hear so much about the home. I I see IT and I can see atto on these west coast coal progressive cities. You just see such an extraordinary, such an extraordinary homeless problem.

Why is that many of the progressive cities and states are the ones that have made IT the most difficult to build housing fundamental. The number of homeless people is a functional timber. People who can't afford the rent of the mortgage.

So expensive places have higher rates of homelessness. And people are falling into homelessness much faster because they are housing unstable. They're spending a lot of money on income.

There is this weird relationship with why progressive places have made IT the hardest to build. Some of this goes back to some of the big social trends in thousand, nine hundred and six seasons and seven. Giving community is a voice in what gets built and in what gets torn down.

Very much comes out of a reaction to urban renewal. The federal government torn down a bunch of black and Brown neighborhoods in cities to run highways a into the downtown areas, and they didn't talk to the communities that were displayed, right? The federal government came in and took your house and torture down the rain in a highway. So the sort of community empowerment comes out of a reaction to that in california. Uh, california was the first state has a statewide environmental protection law, uh, 7 qua， which initially was supposed to protect environmentally vulnerable places, but now has really become web ized so that people can sue to stop a byline in or infill development or affordable housing on the ground, that it's gone to create more traffic or it's going to disturb their view. So a lot of the sort of good impulses in the progressive movement have now been weaponized by some of the most affluent and well IT organized community used to stop poor people and to the lot projects often that have big environmental benefits.

And there's been a lot of controversy about institutional buyers coming in buying up apartments or housing. And what one do you see is a bad thing or there is a just additional source of capital that I should inspire more supply.

So I don't think we should worry about the sort of legal entities that are buying housing as much as we worry about the ways that housing is being provided. Uh, there are sort of a couple of reasonable push backs against private equity, in particular buying up homes. One is that in some cases, they have not seen great members.

Ds, if they provide poor quality housing, they don't fix maintenance issues. They're not responsive to their tenants. Um tenants have a right to good quality housing and good treatment, but that's true whether your landward is a private equity firm or a moment pop landed lord or for that matter, of public housing agency in non profit.

And we should enforce these rules across all kinds of landor's. There's also been concerned that private equity has a lot of cash. And when they go in and they're buying up properties for cash, they can outcompete first time home buyers who need to get a mortgage.

Again, understand that, that's definitely a pain point. But then we should also worry about things like bombers were retiring and selling their primary home and using cash to buy a second home if it's cash buyers. And again, that supplies across all different kinds of entities. So my senses were skateboard private equity because it's a convenient villain. But even if you bound all of private equity from buying up housing, that wouldn't delegate the housing shortage and that wouldn't reduce rental Prices by very much.

And I think people forget, didn't a lot of the instruction buyers get basically their face ripped off and had to sell these things at the laws? Creating more cheap supply doesn't IT swing both ways when you have institutional bars.

IT does. Some of them are good at buying at the bottom and selling at the top, and others missing the market, just like any other investor. In the wake of the great recession, there were a number of workers that had really high agencies and a lot of foreclosures.

And remember that nobody could get a mortgage. And so you had to have cash belt and buy a bunch of the big institutional investors into neighborhoods that had for close and boarded up comes bored. And at least we have them enough to be habitable, got renters. And so they stabilized some of neighborhoods that were hardest hit, you may argue o, we'd like them to sell to hooters once the mortgage markets lose them up. But they didn't perform a really important service because they have access to capital when other people don't.

What do you think of these sort of cities at startups were, in my understanding, is there certain big, small, atlantic, california in other states that have been incorporated by investors, in my understanding, is one of the motivations of the opportunities they see is a lack of zoning in the ability to just you kind of build, baby build. What do you think of these sort of start up cities?

So there is a big one outside of, uh, the bay area that's gotten a lot of political push back a my my sensus part of the problem there is that there was there was intentional secrecy on the front end. Uh so they were buying up a lot of land and trying to develop plans for this without revealing who was behind IT um and that comes across the secretive and undemocratic, and some people are kind of nervous about this.

We do having older examples of plan cities. So celebration in florida, columba, maryland, rest in towner in Virginia, where there was a big master plane city. Many of those are lovely places to build and people want to be in a that has housing and restaurants and public space and parks.

And their sufficiency is to doing these and kind of large scale. We see that also with the neighborhoods within cities. Know in washington, do you see where I live? A number of the big neighborhoods around union market and the daily or its ballpark, those were done as big master plan communities.

So those can beat really nice places. And you have some economies of scale and the infrastructure provided. I think the sort of concern of our private companies doing this going to be accountable to voters is worth a conversation.

I'm also a little skeptical that you can build a city and filled with tenants who won't at some point, then want to take control over the democratic process. So maybe you build, you know, forever california, ten years down in the line. The people who have moved in, their decide they actually don't want to continue building housing and they turn into nbs. That striped me a very plausible outcome down the line.

When I look at the impacts the economy coming out of cove IT IT feels the real structural, enduring change is remote work, more so in the U. S. Than in europe and other parts, the world that where you see vacancy rates are back to kind of the Normal level and commercial estate.

But in the U. S. IT seems that a lot of people who ve been very used to remote work is there perhaps in entire structural shift that will step change up the value of housing because people are just spending a lot more of their waking hours in their home.

yes. And we have probably seen some of that already. So there is some good research that shows that about twenty percent of the increase in Prices nationally is due to remote work by high income workers.

So it's not just that people are working from home, but it's the most affluent workers who want more space to have a home office, just more space to spread out and they're really driving that. Um so in in metro areas with higher rates of work from home, we see bigger Spikes and housing Prices. I will say that there sort of a flip side, which is the opportunity from reimagining a lot of the office heavy downtowns.

It's not quick, easy to convert an office building into residential, but this does open up more buildings. And in some of the city centers that have a lot of analysts, it's probably going to take five to ten years before we see substantial numbers of homes and they're not going to be cheap. But that does mean that we've got some places we can imagine.

And I realized this season you're domain, but I can't resist asking any thoughts know Better year ago, the result of this speculation that some of the second tier regional banks were going to buy a business because at all this commercial estate on the baLance sheet. And IT doesn't feel as if we've seen the melon. We've in vacancy rates be stubborn high commercial real estate, but we haven't seen the sort of meltdown similar to the sub prime crisis in two thousand and eight there was being predicted in the commercial real estate market. Any thoughts on the state of commercial real estate right now?

That's cannot look at different across markets too um even for things like office vacancy, in retail vacancy, some studies have held up Better than others. So you know places like extended disco in new york still have them the highest office vacancy rates. But that's fundamental, very expensive land and somebody is gonna gure out something to do without land and those buildings to make money off of IT.

Um you know many of the the sort of the smaller markets said the sun belt never had as much work from home and those office markets have held up much Better. The regional banks tend to loan for both for acquisition and for development um and the loans on on a commercial properties in their home region. So no, maybe the regional banks that are lending on centers is a realistic are gonna take more than hit because those are pretty diversified and big economies. And so yes, without speculating too much, it's not clear that we're going to see a giant wave of bank failures primarily because of commercial real.

So just a couple thesis I wanted respond. The one IT feels, if so, life happens, death, disease, divorce, that all of these homes are these kind of unexploded devices called the mortgage to two and five percent, where they can't leave at some point as as mark to start to come to, or they need to turn them or refinance them at some point when you just gotten move back to, because the aragon parents, so you need a bigger house there is.

My understanding is that housing, we've never seen where kind of a historic trough in terms of housing sales right now. Do you see pent up demand in what might be like a kind of housing liquidity or sales boom in the next one or three years IT? This feels at some point the damp has to break or assist as a structural shift where people are can stand in their homes for much longer.

People will move eventually. Uh, people do decide that they're just gonna take the head and they will move to something that's going to have a higher interest rate if they really need to. So I think that's right.

When people have life circumstances, they will change. Interest rates will come down in the next couple of years. We don't know how quickly and how far, but that loosening up is probably going to open the speak at a little bit and people will get more flexible.

The other option is that people do what they did in the great recession. You have to move for a job ready to change or a family change. But rather than sell your old house, you rented out. So part of the uptick and single family rentals is actually just Normal people who are renting out their other home that they used to live in.

Curious to get to take on a specific type of property. My thesis that the fastest growing demographic is in senior or latinos, its billionth or very, very rich people. I think kind of inequality is only going to get worse and you're going to continue to see the country really aspirational high end places, whether it's you know certain parts of ela, certain parts in new york.

Although as someone is on in new york, the militia market has been kind flat the last decade. The kind of the the one percent communities are going to outpace everywhere else just because of income in equality. Your thought .

we're seeing that in markets that really cater to high end homes. So one of the other trends that came out of the pendell c was a real Spike and band for housing in places like aspen in upstate new york and a lot of the rural resort communities. And those are some of the hardest places to grab with this because you have very wealthy people buying location homes and second homes with essentially no Price cap.

And you also need to have a bunch of not very well paid workers who serve in hospitality and the beautiful and food service who can't live anywhere close to there. So I think those are sort of one of the the early examples that we're gona see this inequality. You may get to some broader realization that we have to have workforce housing for regional economies to work, including in some of these resort areas and in major cities. The regional economy just doesn't function well if you don't have enough housing the middle income and for lower wage workers, we may get to a breaking point insert of political realization, but I don't think we are great there at doctor .

genti suit is a national renowned economist, author and policy experts on housing inland years. SHE recently joined Arnold ventures as vice president of infrastructure for housing. SHE joined us from her office.

motian. D. C, I left out, just sort of sober. You are about this. Really enjoyed. The conversation is such an important topic, and we need more thoughts, voices, wing, and appreciate your time.

Thank you.

As of happiness, this has been a rough weight for me. I didn't realize how much the election was going to fuck with me. I was very invested.

Was I invested in a vice president? Harris? Not really. Um but I have never supported a candidate initially that ended up getting the nomination.

I supported Michael to caucus in nineteen nineteen, two parents most recently in the two thousand and uh twenty election or twenty twenty I supported Michael bennet so I don't have a great trick or picking candidates and my present Harris wouldn't been my pic. I'm not here to talk about why SHE lost, how you want. I'm here to talk about what I do.

And I feel myself going into a bit of a tailspin. And i've talked about this before. H, my acronym, scared.

And how do I identify? I start getting quiet, I start getting angry, I start being curt. I started to getting very upset of myself.

And I feel like recording as okay. I'm going into a tailspin. And I implement this acronym called sofa, uh, to try and snap out of IT S, C, A, F, A extra sweat.

I find working out and sweater kind of resets your system, if you will. Uh, see for clean, I try to eat at home. We need out its battery, its salty and sugar IT is not good for you.

A absence ts, not the absence ts, most people think, but absence ts, from alcohol. T, H, C, I like alcohol. I like T H C.

I'm good about those things, even hence my life. But when i'm not doing well, I try to just give my sensors a bit of a break. F is for family. I try to be around my family, specifically my boys, not because they are so wonderful, but mostly because there often times very awful.

And being around my kids forces me to be out of my head thinking about, how about I feel? Because they command or demand, and I should say my total attention, and also on occasion, they are prety wonderful. And then IT is for affection.

Um I get a lot of affection sounds for my dog. My dogs are always up for lying on me and playing with me and letting me pat them. And I think my kids sense, but i'm not feeling well.

And I am I doing great. Can we watch T, V or something? And no, sit down and just sort of been instinctively flap their legs over mine.

And I just feels very nice. And most recently this time, something that gave me real moments of peace, real moments of peace with music. And i'm going to play some of that music now, uh, we had these two.

I found a upon his two wonderful songs. The first is the cover, or a cover for, uh, the english beat. Save IT for later from the special beat service album, because special beat any great album reminds me by friendly, we go to vegas and his red geta get forty dollars. The ant and head of vas, and we've listen to that out on the whole way out. And adiva or process is a wonderful .

job covering IT. Let's give where you hit the ground, say IT for later. So later you hit the deck, you get out. And then the second .

one I found on threads, and will play IT for a few seconds as well, is it's a cover of amErica from into a highway by this band called panellist road. And they look like three high school boys. And IT .

is so lovely.

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I love.

Anyway, so I hope that you are doing well this week. I am doing Better. I'm getting out of the house and getting more sunshine and socializing.

Watch helps, and I can fill myself back on an upward spiral. But if you are struggling with this or anything else, if find a recognized, admitted, find your own acronym and spend your way out. But in the meantime, enjoy these two wonderful covers.

This substance produced by Jennifer sanchez and Caroline chagrin, je burrow is our technical director. Thank you for listening. The property power in the box media tworog will catch you on saturday for no more, no less by George, and please follow our property markets pod. Whatever you get your pots from new episodes every monday and thursday.