00:00I do want to talk about the supply situation because that has been the bugaboo for the last
00:04few years. And it's been the one big thing that I think a lot of folks have wanted to see
00:08whether
00:09it could be addressed by legislation or regulation. Do you think this bill has a chance of meaningfully
00:15making an impact? Yes, I think that this bill has a lot of great stuff in it. It ties federal
00:22funding for local municipalities to their plans to increase their housing supply. It creates
00:28guidelines for those municipalities to streamline zoning and to streamline permitting. And that
00:34could meaningfully increase the supply of housing. It does require that all of these local governments
00:39get on board and take advantage of this money. But I think it's great. I think it's the largest
00:44step the federal government has taken on housing since the foreclosure crisis. And it is long overdue.
00:50And, you know, I was thinking about this, too, because I remember I think I can remember it was
00:53like the early 2000s during the Bush administration when they focused a little bit more on
00:58mortgage rates and housing affordability to try to get people in the door with some negative
01:02consequences that came with that. This is also, in addition to the idea that it's focusing on
01:07the actual supply issue, just also kind of an acknowledgement of this being a federal problem.
01:14And I know that the local governments are going to have to sort of make sure that this actually gets
01:17out the door. But how significant is that, that this is actually now being viewed at the federal
01:22level as something that has to be addressed? Yeah, just a few years ago, I think DC thought
01:29of housing as being a coastal problem, a California problem, a New York problem, and not something that
01:35was a national problem. But the pandemic really changed that it turned housing into a national
01:39problem because people moved all across the country. And now home prices are up and they're
01:45unaffordable to middle class Americans in the Midwest and the South. Every part of the country has a housing
01:51supply problem now. And that's why it's so important. The federal government is stepping
01:56in and taking a leadership role here, because when you just relegate it to local governments,
02:00they have different incentives. They're thinking about their local voters who are largely homeowners,
02:05who aren't thinking about people moving in. They're not thinking about future generations.
02:09And it's good to see that these leaders are now thinking about Americans as a whole and not just
02:14relegating it to local governments.
02:16Yeah, certainly this bill receiving bipartisan support here. I do want to talk a little bit
02:21about some more details of the bill, because as you mentioned, I mean, in your words, there's a lot
02:26of great stuff in here. But you also point out that, you know, you think about all the different
02:30challenges. This bill alone won't solve all of them overnight if it was, you know, signed into law
02:36tomorrow. So in your view, I mean, what are still some of the structural issues at play when you think
02:42about this nation's housing housing market? Yeah, there are so many structural issues.
02:47One that home builders talk about a lot is the lack of construction labor that has been
02:52an issue for decades. A lot of people left the construction industry after the foreclosure crisis,
02:57and there hasn't been a lot of entry into that industry. Immigration policy exacerbates that. So
03:03that's something that needs to be addressed. Mortgage rates are still high. Interest rates for builders
03:07are high, and they borrow to finance those projects. So we still need to work on that.
03:12And land prices are high in the places that people most want to live. So I think it's great that
03:17this
03:18policy is addressing some of the zoning and permitting and also allowing for modular and manufactured
03:23homes. But there are a lot of challenges that we still need to work through. Well, you mentioned
03:27mortgage rates, and that's something I'm curious about, because as you mentioned this bill, it does look
03:31at the supply side of things. And we certainly know that has been a bit of a crunch. But we're
03:36still
03:36dealing with very, very high mortgage rates. So in the event that more supply is introduced into this
03:42market, what is the interplay there as you see it with the fact that mortgage rates are still quite
03:48lofty? Mortgage rates are out of the control of legislators. But the next time mortgage rates
03:54drop, and they will drop sooner or later, there's going to be more demand for housing,
03:59and builders are going to want to build to meet that demand. So it's important that we
04:02clear the way now so that the next time there is a surge in demand, builders can react to that
04:08and
04:08increase the housing supply. An example of that is what happened in Austin. In Austin,
04:12a lot of people moved in. The demand for housing shot up. The builders responded,
04:17and then prices came back down. We want to see that dynamic play out anytime that there's an increase
04:21in demand, that supply can be increased in order to meet that demand. Right now, demand is low,
04:26and that's because of mortgage rates. But that could change in the future.
04:29I am curious, too. I mean, I know it's going to take a long time for this build and for
04:33this
04:33all to get off the ground. But do you think that the focus will be on single-family properties,
04:39or will you see a little bit more of a focus on multifamily?
04:43Well, we have a lack of missing middle homes. It's easy to build large single-family homes
04:49out in the exurbs in the suburbs where land is plentiful. But what we really need is housing for
04:56families in the places where people work. And for that, you need more townhomes,
05:00you need more duplexes. ADUs are another way to do infill housing. We need to increase
05:05that supply. And that's what this bill mostly focuses on.
Comments