00:00People always ask us, well, what happens when the cameras aren't rolling?
00:02What happens behind the scenes?
00:03We show it.
00:04We show it.
00:05You see our crew.
00:06You see us disagree.
00:07You see moments that the homeowners, you know, I think it's very relatable for everyone out there because there's so
00:13much pressure on everybody.
00:14Well, in an affordability crisis like there is across the country here, the stories, we have 14 episodes, and they're
00:19all very different stories.
00:20We have families who have lost their house from the fires in L.A.
00:24We have other families that are trying to pull two families together to live in one house because that's the
00:28only way they can afford.
00:29We have so many stories that will be very relatable for Americans watching, and we're trying to solve with really
00:35tight budgets.
00:35We're trying to solve what everybody out here is trying to solve to be able to get a home that
00:38they deserve.
00:39We talk about the evolution of HGTV and just these types of programs that used to be more about the
00:45homes themselves, and they are becoming a lot more about the people and what they're going through.
00:50And, you know, here at Bloomberg, we've talked a lot about the affordability crisis in the housing market and particularly
00:55out west where you guys do a lot of your work.
00:58I am curious if you've seen any sort of movement in maybe sort of a future where you have real
01:05starter homes, real affordable starter homes for people in some of these markets.
01:08There's definitely been a lot of movement.
01:10Unfortunately, it's in the wrong direction.
01:11We have, you know, about a four million house shortage of healthy inventory right now.
01:18And the challenge is people don't seem to understand that we need affordable housing.
01:23Any successful city in the world that has embraced affordable housing, the cities have flourished and the costs have come
01:28down.
01:29But I love the idea that people can live where they work.
01:31And I think some people hear affordable housing, they think, well, that's going to be, you know, drugs and crime
01:36and everything.
01:37Absolutely not.
01:37These are teachers and, you know, nurses and police and, you know, household workers, people who want to live in
01:45the same community that they work.
01:46And so that's our goal is from a messaging standpoint, show people that it's okay.
01:50You don't have to be a nimby.
01:51You don't have to stop projects that are being built, you know, in your neighborhood.
01:54On the flip side, we've invested in companies like Modular Builders.
01:57So we're trying to find new technologies that will physically bring down the cost of construction at the same time.
02:02And a hard time, though, because there's a lot of talk about rate cuts to help, you know, the government
02:05trying to stimulate.
02:06But the problem is when you have no inventory, cut rates if you want.
02:09That gets people excited to buy.
02:10But if there's nothing to buy, you're not really solving the problem.
02:12We need to find ways to incentivize or make it possible for developers to really focus in.
02:17For example, I have a real estate portfolio in Calgary in Canada.
02:20The government in Canada really incentivizes builders to do affordable housing.
02:24So it makes it worthwhile and it can keep rolling money from one project to the next to the next
02:27to actually make a difference.
02:29Down here, I don't have that same opportunity.
02:30Where do you see potentially where those incentives come from?
02:33Obviously, in a city like New York, affordable housing has been a huge topic of conversation.
02:37It pretty much swayed our most recent mayoral election.
02:39I'm sure out west where you guys are, whether it's California, Vegas, Vancouver, you're also seeing similar issues there.
02:46Are you seeing things at the state level or the local level that could potentially alleviate that?
02:50Well, one of the biggest things is I think federally there needs to be better policy that allow and incentivize
02:54builders and developers to pull out more cash.
02:58So, for example, in Canada, if you create a certain amount of affordable housing units within your building, you can
03:04finance up to 95 percent, whereas here, not even close.
03:07And so a lot of builders are leaving 40 percent of their cash in a building, and that prevents them
03:11from building forward.
03:12Also, on the building side, if you're using, say you're building a building for easy figures, $20 million building, if
03:20you do that as an affordable building using public funds for some of that construction, there's all this regulation that
03:26all of a sudden the cost is about 40 percent more just to do the exact same building.
03:30So I think we're getting tied up in, you know, the minutiae, and we're not stepping back and looking at
03:35the fact that we haven't seen rapid enough growth to solve the problem when it comes to actually supplying inventory.
03:41And it's also adding density.
03:42Again, there are different areas that are doing great things, but when you can add some more density, even in
03:46California.
03:47So, for example, my house, I'm allowed to have two suites.
03:49I can have two ADUs, which is great because I could rent both those out, and it's helping with the
03:53crisis.
03:53However, the backlog to get to that point, one of my ADUs, it should have been approved in a week.
03:59I waited five months, and there's such a backlog, and the process is so archaic.
04:03We need to revitalize the process to get people moving to add density.
04:07This is one of the things where I'm hoping that AI is actually helpful because the bureaucracy behind trying to
04:14wait through the planning process,
04:16anyone who's taken on a renovation knows how annoying it is to wait on your permits, wait for the city,
04:20also wait for the utilities to go through and process everything.
04:23I would love to see something that automates a lot of that to make sure that the I's are getting
04:28dotted and the T's are getting crossed,
04:29but you can actually get in and do the work.
04:31And as I say, this literally is right now in modern history, this is the absolute worst affordable housing market
04:38in history for first-time homebuyers.
04:41First-time homebuyers are less than 25% of the market right now, and that should be a lot higher.
04:45It's just not feasible for people to get into real estate like it used to be.
04:49Obviously, you've had a presence specifically on HGTV now for more than a decade.
04:54You've had a lot of iterations of your show and obviously shows that don't actually feature you two.
05:01How much has that changed in terms of being able to produce a show like that at a reasonable cost,
05:07have whatever relationship you have with HGTV, and actually make it profitable for everyone?
05:11I mean, so we are one of the largest unscripted producers in North America.
05:14We have 15 series that we produce.
05:16We host two of them.
05:17But we have found a huge shift because what we used to have for budgets for our shows down here
05:22on HGTV or with other partners,
05:24we don't have that anymore.
05:24So we as producers have to get more creative.
05:27And sometimes that means going to Canada, greenlighting with a co-pro out of Canada,
05:30and then coming down with a license or co-proing with the U.S. down here.
05:35So we're really good at getting creative.
05:37But plus, our company stands out from other production companies because we are up in Toronto for our production base.
05:42So we can actually take advantage of a lot of tax incentives up in Canada that are great that a
05:46lot of U.S. producers can't.
05:47Well, and we're also seeing explosive growth in digital and other forms of media, YouTube, everything else.
05:54So we've always stayed a step ahead.
05:57We're always looking at where the industry is going.
06:00Right now, television, traditional television, I mean, what's the word imploding?
06:06Everything is, everyone's uncertain.
06:08There's a lot of mergers happening.
06:09And so things are paused.
06:11But that's what I like is the fact that we're constantly looking at it.
06:13So there's enough opportunity that we can still find placement.
06:16As has some of the mergers, particularly Warner Brothers being absorbed into Paramount.
06:20Has that affected at all?
06:21Maybe your outlook for what HGTV and Discovery ends up being?
06:24Yeah, absolutely.
06:25It's more of a pause.
06:26That's what it is right now.
06:27Because nobody wants to jump in a direction if they don't know who's going to own the company or what
06:32the focus is going to be.
06:33But if you look at Netflix, they were only interested in studio-side streaming.
06:36They weren't interested in linear cable.
06:38So Paramount's taking everything.
06:40So that does mean that we, as we're the largest producer for HGTV for Warner Brothers on The Unscripted,
06:45now we'll have that opportunity to do the same with Paramount.
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