00:00You and other experts in this space have made the point that institutional investors are not
00:04a big player in the single family rental market, yet they make for a convenient scapegoat. Why is
00:11that? Well, I think that they're very much in the public eye, very visible. They only account for
00:18about 1% of the single family housing stock, and it's so banning them from purchasing. I think the
00:26perception with the public is that they dominate inventory. They basically, you know, one of the most
00:32challenging aspects of housing and why we're in an affordability crisis is because there's been
00:37inadequate supply. However, they're a very tiny, you know, a 1% sort of number. And then on top of it,
00:48the highest concentration of institutional investors, Wall Street per se, is in the south,
00:56the Sunbelt, which has excess supply right now. So I'm having a hard time connecting the dots on how
01:04this will help improve affordability. I think it's a non-issue generally for solving that problem.
01:13Well, you make a lot of important points, and it's a reminder of how, at the end of the day,
01:16real estate is very local. Housing supply and housing demand is very local to each specific market. Yet,
01:21when it comes to perceptions, there is this sense that these institutional investors,
01:26Wall Street type of firms like a Blackstone, play this outsized role. And part of it is because they
01:31came in during the financial crisis, or in the wake of the financial crisis, and did swoop in and buy a
01:37lot of single family homes at a time when Americans were losing their homes. So that looms large in the
01:44public consciousness. Absolutely. The perception, you know, perception is value. And, and so they were,
01:53you know, highly visible coming in and sort of, you know, scooping up 2012, 2013, a tremendous volume
02:01of foreclosed homes after the financial crisis, and have made it work. And some of the firms have even
02:10sold off part of their portfolios as the, you know, the market has peaked in the last couple of years.
02:18So I don't see, I see this as disconnected from what the actual problem is. The problem is to
02:26enhance affordability. And I don't think the institutional aspect of the housing market has
02:34much to do with it. Right? Well, to be fair, President Trump is not the only one who has
02:39suggested something like this. Elizabeth Warren, the Massachusetts senator, has also said something
02:45similar. So this is a bipartisan kind of approach to trying to tackle affordability in the housing
02:50market. You say the solution is to build more housing, but this, that, that, that takes a long
02:56time. That's not something that happens overnight. What kind of timeline are we talking about, even if
03:00you could open this figure and just allow builders to start building more homes?
03:04Yeah. And also too, you know, a lot of the housing that we're building is skewing to the higher end
03:10because of land costs, because of product costs, because of labor costs, all those things make it
03:16very difficult. But if you create oversupply or modest oversupply, you place pressure on housing prices
03:25and, and that sort of melts into the next layer below that. And then below that, it is not a surefire
03:31solution, but it's just one of those things. The other thing is, you know, a lot of the challenge
03:37of single family affordability has been zoning and cities like Minneapolis have banned single family
03:45zoning, new, new construction within the municipality and trying to move towards multifamily in high density
03:52areas. There's many things that can be done. I think to your point that both sides of the aisle
03:58are disconnected from the actual problem in this idea that, you know, inventory is inventory is very
04:08local, very regional. And when we look at markets like the Northeast or the Midwest, very tight in terms
04:15of supply. We look at Sunbelt, very soft because they were able to create and build more housing during
04:20the migration pattern that we saw during COVID where people left the Northeast and the West Coast to go to
04:28more affordable housing. And that soon ended because the demand was so high. Yeah, you have to remember
04:35that mortgage rates are double what they were. Yeah. And still housing prices are rising. Right. So it is
04:42all about supply.
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