Never Seen Affordability Crisis Like This: Fmr. HUD Sec.

Bloomberg

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00:00So affordability, it's always part of the conversation in any election cycle.

00:05But you think about affordability right now, especially when it comes to home ownership,

00:09when it comes to first-time homebuyers, it's a particularly urgent question.

00:15I would say it's the number one economic issue in the country.

00:18And when we talk about affordability, there's no bigger cost for the average American family

00:23than their home, right?

00:24And so housing really is driving this conversation.

00:28And I would say it drove our elections a month ago.

00:31It drove our elections a year ago.

00:32We called it an inflation election.

00:34But our inflation problem has been a housing problem for the last few years.

00:39Probably a safe bet, too, to think it's going to drive our elections a year from now, too,

00:42when we get to those midterms.

00:44But talk us through the different dynamics here, especially when it comes to supply and demand,

00:49because one of the big narratives out there is just that there's not enough housing supply

00:53to meet that demand.

00:55Well, you've got three big things going on.

00:57We haven't built enough housing in this country since the Great Recession,

01:00so we have a supply gap.

01:02We're seeing costs go up dramatically.

01:04And that's not just the costs to build housing.

01:07It's insurance.

01:08It's utilities.

01:10It's labor.

01:11It's all the things that go into operating housing.

01:13And so it's become more and more expensive for homeowners to meet their monthly bills,

01:18even if they're already in a home, much less get into one.

01:21And it's true for renters, too, that the cost of maintaining rental housing has gone up dramatically.

01:25We've never seen an affordability crisis like this in the history of keeping the numbers.

01:30With regards, though, to the solutions, where do those solutions come from?

01:33Do they come from the federal government, or did these need to be at the local level?

01:36Yes.

01:37The answer is both.

01:38All right.

01:38Well, right now, we have no HUD, as I'm sure you've noticed.

01:41That's been completely gutted.

01:43So let's take the federal government out of it.

01:44And let's talk about New York City.

01:46We have a new mayor that's going to be inaugurated at the start of the year.

01:49He ran on a campaign of housing affordability.

01:51He has some bold, if not controversial, ideas, particularly when it comes to protecting renters

01:56and particularly when it comes to, at least in his view, what he thinks he can do to force

02:00the building of affordable housing.

02:01Do you think he can do it?

02:03Well, look, we're going to see.

02:05But one thing I was encouraged about is that on the day of the election, he announced that

02:10he'd supported a set of ballot measures here that are all focused on building more housing.

02:14It's one thing to talk about freezing the rent for people who already have housing.

02:20It's a different thing to try and say, how are we going to build more housing?

02:23How are we going to bring costs down?

02:25And that's what he's got to be able to do.

02:27I want to just play devil's advocate here for a second, because I've had this conversation

02:30with a lot of folks.

02:31And one of the concerns with regards to a build out of more affordable housing, and I'm talking

02:35about purchase properties that people would purchase, not rentals, this idea that as

02:40that supply comes in, you don't necessarily going to see a drop in overall prices, that

02:45effectively the market will rise up to a certain extent to meet that new supply, effectively

02:50keeping prices elevated.

02:52Well, there's no question that it takes a while to build housing.

02:56And so you're not going to see it as an immediate solution.

02:58But in the long run, it's absolutely clear that we don't have enough housing.

03:03The estimates are somewhere between 3 million units and 7 million units that we're short.

03:08But everybody agrees that we have too little housing, and the laws of supply and demand

03:12do work.

03:12But what's the incentive to build?

03:13I'm talking for private companies using their own money.

03:16Can this be done alone on their end, or do you need the federal government doing this?

03:21Well, look, first, we have to get government out of the way, right?

03:25Get them out of the way.

03:26That means less regulation.

03:29Zoning has to change.

03:31We've seen that happening in red states and blue states across the country.

03:34And so, for example, the governor of Montana, a very red state, got rid of most single-family

03:41zoning and parking requirements.

03:42We're seeing governors like Newsom get rid of environmental protections that are allowing

03:48more housing to get built.

03:50We're seeing New York City do the same thing.

03:52So that's part of it.

03:53But the government also has to play a strong role, too.

03:56And here's the thing.

03:57When was the last time you saw Congress act almost unanimously on something?

04:02I haven't seen Congress act at all on anything.

04:05Well, here we go.

04:06This summer, they passed the biggest...

04:09You know what?

04:09You know the last time they acted?

04:10Here's my joke.

04:11It was when you still had red hair.

04:15That's a long time ago.

04:16I won't take it personally.

04:18But look, here's...

04:19And not enough is being reported about this, in my view.

04:22A few weeks ago, we had Tim Scott and Elizabeth Warren sponsor the most comprehensive housing

04:29bill we've seen in a generation, and it passed unanimously out of their committee.

04:34I'll say that again.

04:35Unanimously.

04:35When was the last time you saw that?

04:37And this past summer, we saw the biggest increase in the low-income housing tax credit

04:41that we've seen in 25 years.

04:42That's 1.2 million units.

04:44So there is something the federal government can do.

04:47And I think what's unusual about this crisis, we've always had the problem here on the coasts,

04:52right?

04:52But it is everywhere in this country in a way that I've never seen, and that means it is

04:57more bipartisan.

04:58We just heard Michael Dell talking about the bipartisan interest in helping children, right?

05:05That is absolutely true on housing right now.

05:08And in a world where homeownership is disappearing as an option for building savings for more and

05:13more people, we've got to look at other ways to do that.

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