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|---|---|---|
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unidentified
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III and argues that he has been misunderstood in his book, The Last King of America. | |
| Then, historian Harlow Giles Unger, author of First Founding Father, recounts the efforts of Richard Henry Lee in the Revolutionary War, from his call for independence from Britain in the Second Continental Congress to his exploits on the battlefield. | ||
| And National Constitution Center president and CEO Jeffrey Rosen talks about how the founding fathers thought about virtue and were influenced by classical writers in his book, The Pursuit of Happiness. | ||
| Watch book TV every Sunday on C-SPAN 2 and find a full schedule on your program guide or watch online anytime at booktv.org. | ||
| Joining us this morning is Salim Firth. | ||
| He's a senior research fellow at George Mason University here to talk about efforts to increase housing supply across the country. | ||
| Mr. Firth, let's just begin with the status of housing. | ||
| What does the supply and the demand look like? | ||
|
unidentified
|
If you know anybody who's looking to buy a home in 2025, you know it's really tough around the country and it's not that much better if you're renting either. | |
| So what are the numbers? | ||
| Depending on where you live, it changes obviously. | ||
| But overall, how much of a shortage is there? | ||
|
unidentified
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So people will try to estimate this and they'll talk about millions of units, 4 million, 20 million, 7 million. | |
| I don't know that that's the most helpful approach to thinking about it. | ||
| A healthy housing market is one that is elastic, responsive, that as trends and demand and prices change, the market changes. | ||
| It delivers different kinds of homes in different places, depending on what's going on in the economy, depending on demographics and what people need. | ||
| And so, you know, I think the risk of trying to put a number on it is that then you think, well, if we just do that, then we can be done. | ||
| And the reality is you're never done. | ||
| Just like we need farms to keep producing food year after year, we need a housing market that will keep producing homes and evolving and changing year after year and decade after decade. | ||
| And we just have not had that really since the Great Recession in 2007. | ||
| What impact are interest rates having on supply and demand? | ||
|
unidentified
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Yeah, so interest rates have done two things. | |
| So one, they kind of directly raise the monthly cost of getting a mortgage, right? | ||
| And so that's sort of easy to understand. | ||
| The second is they lock people in, right? | ||
| So folks like me who were lucky enough to refinance when interest rates were really, really low, we're kind of in the golden handcuffs right now. | ||
| If I wanted to move to take a different job or find a different community, I would have to walk away from my really low interest rate and get a new one that's three or four times as high. | ||
| And so that would be kind of a big price jump. | ||
| Everything else, you know, being equal, I'd be paying a lot more to move. | ||
| And so that means fewer of us are putting our homes on the market. | ||
| So if you're looking to buy now, you're both faced with paying higher interest rates and just fewer homes to choose from. | ||
| There's just fewer people changing houses and kind of shuffling things around than there would be in a kind of a normal market where interest rates had kind of been flat for a long time. | ||
| How long has this lack of supply been the situation in the United States? | ||
|
unidentified
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So it's been the situation in some key coastal cities for a long time. | |
| You know, Bernard Friedan wrote a book in around 1980 talking about how the San Francisco Bay Area was systematically blocking new housing and it was creating high prices and boxing people out. | ||
| And 50 years later, 45 years later, nothing has changed there. | ||
| Instead, what we've seen is the cost crisis has spread. | ||
| And it's not exactly the same in Kansas City or Buffalo as it is in California. | ||
| I don't want to say that they have exactly the same problem. | ||
| But there's some spillovers. | ||
| And particularly, any place in the Western U.S. is seeing large numbers of Californians who are essentially cost refugees, either cashing out from their expensive homes or moving because they can't afford to buy that first home. | ||
| And so they're moving from California to Boise or Phoenix or Las Vegas and driving up prices there. | ||
| And so there's a number of factors also related to the pandemic, supply disruptions that sort of cost builders some time and increased home buyers' power. | ||
| So prices have gone up in places that traditionally we don't think of as having any kind of supply constraint, but they just haven't been able to maintain the affordability that people in a place like Buffalo or Des Moines are accustomed to. | ||
| Well, what is happening in Florida then with the oversupply of housing? | ||
|
unidentified
|
Yeah, so Florida, I think, was on like a one-year delay from the rest of the country. | |
| I haven't studied that in depth, but you need oversupplies, right? | ||
| So if you only have the boom and you don't have the bust, then you're on a one-way ratchet. | ||
| And that's kind of what we've seen, you know, in a place like Boston or Los Angeles, where, well, when things are booming, prices rise, and then the economy cools off, but prices don't really fall. | ||
| They just flatten out. | ||
| And that feels nice if you're a homeowner, right? | ||
| Because then you're like, well, sometimes I gain value and sometimes my value, home value stays the same. | ||
| But if there's no bust, if you never come back down, then prices are just going to get higher and higher. | ||
| And, you know, Florida, yeah, they've got a little bit of price decline now, but it's not like they're back down to 2019 levels. | ||
| They need even more home price decline to get anywhere close to the affordability they had just six years ago. | ||
| I want to invite our viewers to join in in the conversation. | ||
| Here is how we'll divide the lines this morning. | ||
| If you're a homeowner, call us at 202-748-8000. | ||
| If you rent, your line this morning is 202-748-8001. | ||
| All others can call at 202-748-8002. | ||
| And remember, you can text if you don't want to call at 202-748-8003. | ||
| Celine Firth, you put out a policy paper recently with the title Pro-Housing Legislation Goes Vertical in 2025. | ||
| What did you find? | ||
|
unidentified
|
Yeah, that's right. | |
| So this was work with my colleague Eli Kahn. | ||
| And what we found is that state legislatures all over the country, both coasts, but also in the middle, are taking housing costs really seriously and doing far more work on housing supply than they've done in previous sessions. | ||
| So last year, 2024, was the busiest legislative session on housing that anyone can remember. | ||
| And this year doubled that. | ||
| This year tripled 2023. | ||
| And most state legislatures do most of their work in the first half of the year. | ||
| And we're seeing, I think we counted 123, 125 bills in the last 12 months that have passed state legislatures. | ||
| And those range from tweaking the process to make it quicker to approve housing to legalizing housing in commercial zones to expanding homeowners' rights to build an accessory dwelling unit, like a backyard cottage or a basement apartment in land they already own. | ||
| And so, legislators, both parties, North and South, are they're trying everything and they're working with people like me and Eli and people at research centers around the country to say, hey, what really works? | ||
| We don't want to make things worse and we want to understand how this problem works, how the market works. | ||
| And I'm incredibly impressed, actually, with our state senators and representatives around the country in an era of pretty sharp polarization. | ||
| And you see some really nasty fights in a number of these state legislatures. | ||
| And these folks are able to set those aside. | ||
| Sometimes in the same legislatures where there's name-calling and viciousness, when it comes to housing, they have been able to, in most cases, set aside those differences and say, all right, well, we don't agree on a lot, but we do agree that people in our state need a place to live and we're going to take the research seriously and try to find solutions. | ||
| Before we get to calls, what's happening at the federal level? | ||
| Last week here on the Washington Journal, we read about a proposal by Tim Scott and Elizabeth Warren, you know, Republican and Democrat, not exactly two people that see eye to eye, working on housing legislation to address the supply issue. | ||
|
unidentified
|
Yes, I think that was really impressive. | |
| There's been a number of calls to do something huge and muscular at the federal level. | ||
| I think that's wrong. | ||
| I don't think the federal government has the knowledge or the capacity to do something that's big, powerful, and large. | ||
| So the Warren-Scott bill, I think, does what's right, which is it pulls together like 25 different small board proposals because there's many little federal touch points in the housing market and trying to address each of those and creating a few new touch points in ways that try to tilt things towards encouraging localities to do more to expand the right to build housing, trying to make it easier to access housing. | ||
| And that's, so I think that's the right approach from the federal level to say, this is a big problem, but we can't trust ourselves, the federal government yet, to come wading into this as an outsider and fix everything. | ||
| Instead, we need to listen to the locals, listen to the states, and give them the tools they need and the encouragement to do the real work. | ||
| Because I think the real work is happening in places like Olympia, Washington, and Augusta, Maine. | ||
| All right. | ||
| Salim Firth is our guest here this morning. | ||
| He's with George Mason University here to talk about the increase in housing supply. | ||
| Richard, in Minneapolis, your homeowner, up first. | ||
| Good morning. | ||
|
unidentified
|
Yes, good morning. | |
| I don't know if that means homeowner or apartment owner. | ||
| I own a couple duplexes. | ||
|
unidentified
|
And, you know, the biggest problem I see here in Minneapolis is the far, far left city council. | |
| They want to provide money for everything. | ||
| Money seems, you ask them how much is this going to cost? | ||
| And they look at you like they lost their way in the woods or something. | ||
| But they're piling on property taxes at 8% a year, 9% a year, 6% a year, 7% a year. | ||
| It's a great big cost to rent increase. | ||
| And I belong to the Minnesota Multi-Housing Association. | ||
| And the experts there say the biggest way to lower the price of rental is to build more houses. | ||
| And with this far left city councils around here and the whole state of Minnesota, they're putting on so many regulations. | ||
| It's possible to build houses and do it in a way that's economic. | ||
| All right. | ||
| All right, Richard. | ||
| Mr. Firth. | ||
|
unidentified
|
Yeah, one of the great things about the Twin Cities area is that you have the ability to learn from each other. | |
| And St. Paul, actually, across the way, made a huge mistake of enacting rent control two or three years ago. | ||
| And that completely shut down their multifamily market. | ||
| Basically no investor would go anywhere near St. Paul and Minneapolis's council had uh, so the voters had given it permission to enact rent control. | ||
| But they said hey let's, let's just wait a few months and see how this thing plays out in St. Paul. | ||
| And when they saw how badly things went in St. Paul, the Minneapolis council, as far left as they are decided, you know, we do want to keep building apartment buildings and we don't want to to completely shut out the market like St. Paul did. | ||
| So you know I there's been. | ||
| Housing policy has been tricky in Minnesota. | ||
| I've actually been very close to it, written papers about the housing market there, but at least Minneapolis kind of saw what was going on and St. Paul, to its credit, has tried to kind of worm its way backwards and create more and more exceptions to create some daylight where people can make money building and renting out housing, because ultimately rents will fall in a and in relative to incomes. | ||
| Rents will fall over time in an unrestricted market. | ||
| On average the rent in any given building tends to go down or to rise less than inflation, while people's wages and taxes on average rise with the rate of inflation. | ||
| Once you put in place rent control, you say well, it's going to rise at the rate of inflation. | ||
| Well, that's higher than it was rising before. | ||
| And you know we're seeing this now. | ||
| Actually in my home county in Montgomery County, Maryland enacted rent control and it has now for 18 months shut down multifamily construction which had been uh, going along at a brisk clip and continues to move along at a brisk clip in neighboring jurisdictions. | ||
| And this is another place where same unit rents tend to fall or to at least rise less than inflation. | ||
| And now, with the new rent control, they can rise at the rate of inflation. | ||
| And so rent control is actually probably going to raise people's rents in Montgomery County relative to what it was doing before, and that's a tragedy. | ||
| You can go much too far in the well, we're going to try to micromanage this market instead of removing the the strict regulations. | ||
| Our color city owns two duplexes. | ||
| One of the great things that Minneapolis did was to allow duplexes again in most of the city, which is something they had built in the past and then basically criminalized. | ||
| And they said, you know, actually, duplexes aren't so bad. | ||
| And they're really great for small investors like our caller. | ||
| And they're really great for having a place that you can rent or sometimes buy that's not as expensive as a single family home, but has a lot more of the kind of connection to the neighborhood and freedom to move around than simply. | ||
| having an apartment in a large building. | ||
| If rents rise with rent control policies, then why would investors leave if they're going to make more, you said? | ||
| You argued that they will make more without the rent control. | ||
|
unidentified
|
The people who own existing buildings will make more. | |
| People who build new buildings say, well, we don't even want to move in there. | ||
| And so they don't make anything. | ||
| They just walk away. | ||
| And so then it's the existing folks who already own a building. | ||
| So the key, right, on housing supply, the key is to say, we need competition, right? | ||
| If you have only one grocery store in your town, they can raise the prices really high. | ||
| Once you've got three grocery stores, they have to compete with each other because if one is too expensive, you'll just go to the other one. | ||
| And it works the same with housing. | ||
| In a place like you mentioned, Florida, but it's also true in Denver. | ||
| They built a lot of apartment buildings when rents were high. | ||
| And now rents are coming down because tenants can shop around. | ||
| I was walking around the Orange Line corridor two days ago in Arlington, Virginia, and every big building has a sign out signed with a QR code you can scan saying, please rent here. | ||
| It's great for renters when there's new housing supply, high-quality apartments that compete with each other and compete with the existing stock. | ||
| If you're stuck with a static stock of buildings, then time takes its toll. | ||
| Housing gets worse as it gets older. | ||
| And if there's no competition, there isn't that downward pressure on prices as a new unit comes on and says, hey, we'll charge you the same for a better unit. | ||
| All right. | ||
| Let's go to Wisconsin. | ||
| Mike, who rents there? | ||
| Good morning to you. | ||
|
unidentified
|
Well, I'm 68. | |
| I live 38 miles north of Madison. | ||
| They just built a 16-unit apartment right next to me, 50 yards away. | ||
| They're in the process of renting it right now, and they're asking $1,500 to $1,800 a month for a two-bedroom. | ||
|
unidentified
|
I'm trying to relocate to a more quieter area. | |
| I live north of Madison, 40 miles north, and I can't find a place to rent, to move to because everything is taken up. | ||
| I'm on a list everywhere I go. | ||
| And pretty much in Columbia County, north of Madison, about 40 miles, everything is going for anywhere from $1,300 to $1,800 a month plus utilities for a two-bedroom. | ||
| In 2000, I rented a beautiful apartment. | ||
| Back in the 70s, you could get a two-bedroom for $250 a month. | ||
| Back in the 90s, it was $275, $300. | ||
| Back in the 2000s, it was $500 a month. | ||
| Now it's just tripled. | ||
| Let's take your point, Mike. | ||
| Mr. Firth. | ||
|
unidentified
|
Yeah, inflation is real, right? | |
| Everything is more expensive. | ||
| The good thing is that our wages rise with inflation too. | ||
| So there's some balance there. | ||
| Rural places, and I've actually talked with professionals who work in rural Wisconsin. | ||
| One of the biggest problems that they have is the lack of people entering the trades. | ||
| So if you're in a smaller town or a rural county, you know, there might be just one or two plumbers or electricians who consider that their territory. | ||
| And if you want to get somebody to come out from Madison or Milwaukee, you might have to pay them extra for the drive time. | ||
| And a lot of those folks are actually the same age as our caller and they're retiring. | ||
| And there's no one coming up behind them. | ||
| There's a dry pipeline of apprenticeships. | ||
| And that's going to be a challenge in rural areas to say, we want to continue to have high quality, different types of housing. | ||
| It's great that there's 15 or 16 new apartments right where the caller lives. | ||
| And that will create options. | ||
| And at least he's got that option. | ||
| Maybe it's not exactly what he wants, but it's a lot better than having no options and just having housing get older. | ||
| But we need to really affirm, I hear this actually from educators, young people who could go into the trades and earn good money, six-figure salaries, doing skilled, interesting work, problem-solving and creative work, building things. | ||
| They're kind of told that that's lower class work, that they should wear a white collar like mine and sit at a desk. | ||
| And that's, you know, it's fine. | ||
| I like my job, but like, that's not for everyone. | ||
| And you can make a good living and help your neighbors. | ||
| And we should really affirm when a young person says, hey, I'm joining the electricians union as an apprentice and I'm going to be able to make six figures in five years and have my own business in 10 years. | ||
| And that's a fantastic path that young Americans could take. | ||
| And we who are older, we should affirm that and not kind of look down on them if they don't have a college degree. | ||
| All right. | ||
| We'll go to Cliff, Tulsa, Oklahoma. | ||
|
unidentified
|
I'm a 50-year builder, construction plumber. | |
| We used to build apartments for $25,000 a unit back in the 70s. | ||
| And I think they're probably $200,000 a unit. | ||
| The thing I've seen in the market is the short-term rental market really exploded. | ||
| During the pandemic, investors went all over the United States and bought up everything they could to get into the Airbnb Verbo deal. | ||
| In Tulsa, we're having a problem with investors buying all the houses around all the hospitals for furnished by traveling nurses. | ||
| The problem is, is we do some, you know, we do a lot of weekly rentals, but we can do short-term rentals and make the same amount of money in the house they used maybe a third or 50% of the time. | ||
|
unidentified
|
And this is being repeated all over the country right now is why there's so much of a shortage and so much, you know, when someone can get $135 a day versus $1,500 a month and they don't have the maintenance. | |
| And like you said, you can't get the technicians to come and work on the heating and air and you can't get them to come work on the plumbing because there's not a lot of people out there to do the maintenance on them. | ||
| So that drives the cost up on the investors. | ||
| But the problem is there's just too much big money to buying up all the properties. | ||
| And I think that's not going to stop for a while. | ||
| Yeah, let's talk about that, Cliff. | ||
| Thanks for bringing up the investor part of this. | ||
|
unidentified
|
Yeah, so in a lot of states, politicians introduced bills that would have limited investments in housing this year and last year. | |
| And I think, thankfully, luckily, none of those bills passed. | ||
| And that's been, you know, I say thankfully because generally we see investors as mostly a positive influence on the market. | ||
| They provide rental housing. | ||
| If you don't have no investors, no rentals, right? | ||
| If we only have owner-occupied housing, there's nowhere to rent. | ||
| And they also put a floor on the market. | ||
| They tend to come into the cheapest places where homeowners don't want to buy and smaller investors are intimidated by the amount of upkeep. | ||
| So they the sort of like single-family investor market was really created in the crash in 2009, 2008, as mortgages dried up and people couldn't buy houses. | ||
| And rather than having these houses sitting vacant, it's really good that some money came in and said, hey, we're going to buy these. | ||
| We're going to rent them out. | ||
| That's a lot better than the alternatives. | ||
| I understand it can be frustrating, especially if you're a young homebuyer bidding against a company that can pay cash. | ||
| That's really hard. | ||
| But the solution is not to try to eliminate the competition and push renters and investors out. | ||
| The solution is to allow more housing. | ||
| So, maybe Oklahoma should look at some of the things that Texas did in this legislative session, like legalizing starter homes in all their major cities or legalizing multifamily housing up to at least 45 feet, which is three or four stories, in commercial areas. | ||
| And so, there's a number of things that Texas did to say, hey, we see this enormous influx of money, all these people moving here from around the country, around the world, and investors. | ||
| And we could yell at them, or we could say, we're going to have enough money that a visiting nurse can find an Airbnb and a young homebuyer can find a new home. | ||
| And those things can coexist. | ||
| We don't need to say, well, we have to choose between the visiting nurses and the homebuyers, or we have to choose between the vacationers who bring tourist dollars to our community and the locals, right? | ||
| Both of those things can coexist. | ||
| We just need to remove the restrictions that prevent our builders from building housing. | ||
| Gina's in Alabama. | ||
| Hi, Gina. | ||
|
unidentified
|
Hi, Greta. | |
| How are you? | ||
| Morning. | ||
| Go ahead. | ||
| Question or comment? | ||
|
unidentified
|
Both. | |
| I bought my first home at 30 years old. | ||
| I'm Generation X, by the way. | ||
| And I paid like $38,000. | ||
| I think for it, it was a 1,200 square foot. | ||
| And then we moved up to a 2,200 square foot. | ||
| That's what we're in now. | ||
| I'll have it paid off by 2026 because I just refinanced what I owed for 2.25%. | ||
| Number one, our problem is interest rates. | ||
| And number two, my home value has went up from $138,000 to $400,000. | ||
| And I'm in North Alabama. | ||
| I'm 20 minutes from Huntsville. | ||
| And the main thing I notice is taxes go up, homeowners' insurance goes up, and the cost of having a home is like a house payment. | ||
| Now, utilities went up like 30% with TVA. | ||
| And the main thing I see them building here, you know, between here and Madison and Huntsville, is luxury, you know, two, three-bedroom, townhome type little communities. | ||
| And out here, they're still building, you know, single-family homes, three, four, five-bedroom homes. | ||
| I've noticed a lot of them, and they have no problem selling them at the prices they're asking. | ||
| All right, Gina, I'm going to jump in. | ||
| Mr. Firth. | ||
|
unidentified
|
Yeah, so I talked about how it's states all over the country, not just the sort of traditionally expensive areas that have been enacting laws to make it easier to build housing. | |
| And Alabama was one of those. | ||
| Legislators passed a pretty small bill there, but it was one of 10 states that made it harder to use the judicial system to block housing, right? | ||
| So there's lots of ways that different states have set up environmental laws or just kind of blanket permissions to go to court and say, well, I don't like that this builder is building something next to me. | ||
| And I don't have a really good complaint, but I'm going to throw a kind of vacuous lawsuit into the system. | ||
| And it's going to just grind things down. | ||
| And if I get a good lawyer, I can delay their project for two years. | ||
| And instead of waiting the two years to get my case dismissed after all the motions and counter motions, the developer is just going to come and give me 30K on the side. | ||
| And that's a thing that happens. | ||
| And you'll see this done in California and Massachusetts and evidently in Alabama. | ||
| And so I'm very cheered to see that legislators are taking that seriously. | ||
| Yeah, I mean, all the costs that she talked about, those are real. | ||
| Inflation has made taxes, property taxes go up. | ||
| Local governments have to pay their workers. | ||
| They've got to fund all the things that they deliver. | ||
| And all those prices rose with inflation. | ||
| And so that inflation is getting passed through in property taxes to homeowners. | ||
| And insurance is another area where a large number of disasters in the last several years led to absolutely unprecedented increases in homeowners' insurance. | ||
| And homeowners really should shop around. | ||
| A lot of times the different prices for home insurance are now extremely different among providers because some providers have jumped ahead and raised their prices and others are trying to like make it work at still lower insurance premiums. | ||
| So take a look for that. | ||
| Mr. Furt, though, when you combine all of those elements together, what is going to be the impact on housing? | ||
| Property taxes going up, as you're talking about, insurance going up, maintenance costs going up because of tariffs, the costs of goods. | ||
| And on top of that, utilities. | ||
| You've seen utility companies across the country say the demand for power by artificial intelligence requires us to raise prices. | ||
| And it's the consumer that's seeing a double digit increase in their electric bills. | ||
|
unidentified
|
Yeah, that's right. | |
| So there's a lot of things. | ||
| There's so much policy to unpack there, right? | ||
| Every one of those markets has its own distortions, well-intended regulations. | ||
| So on power interconnection, for instance, well, AI wants a lot of new electricity, but the United States makes it extremely difficult to connect new electricity to the grid, right? | ||
| When the Tennessee Valley Authority started creating electricity by damming rivers in the northern Alabama region 100 years ago or 90 years ago, it was really easy. | ||
| You'd generate the power lock into the grid, people could buy it. | ||
| Now, if you wanted to create new clean electricity any particular way, you have to go through a multi-year process to somehow prove that you're never going to be unreliable. | ||
| Instead of saying, well, we have the original grid and we're just going to add to that, which is clearly a positive. | ||
| Only Texas, which has its own grid, allows easy interconnect and liability on the new power supply. | ||
| So I say there's lots of reforms available on the power side. | ||
| And every other market that you just mentioned, my expertise is in the housing market. | ||
| And so we have to deal with like, yes, inflation's gone up. | ||
| Every price has gone up. | ||
| The good news is that for most people, their wages also rose by something comparable. | ||
| And if you have investment money or if you own property, well, the value of your property also rose with inflation. | ||
| Your investments also rose with inflation. | ||
| So there's some sense of like, we're just changing the units of account here. | ||
| What we can do, the thing that's within our control in a difficult time is we can legalize the building of more housing. | ||
| And the cities that are building housing, the cities that are welcoming it, like Austin, Texas, they're seeing their rents. | ||
| They go up in the boom and then they come back down in the bust. | ||
| And they say, okay, well, it doesn't have to stay high forever. | ||
| And the cities that don't build new housing, like Boston, you know, like Los Angeles, they see their home prices and their rents, you know, go spike during the boom. | ||
| And then during the bust, they don't come down. | ||
| They just flatten out. | ||
| And so we want to have the first one. | ||
| We want to have they can come back down because new supply comes online. | ||
| We need to get our laws and regulations right so that builders can do their job. | ||
| And there's a lot of other things in the economy. | ||
| The thing that's easiest, you know, people ask me like, oh, why do you think zoning's going to, you know, fixing zoning is going to solve everything? | ||
| I don't. | ||
| Nobody thinks fixing zoning is going to solve everything. | ||
| We face a lot of hard problems in the United States. | ||
| The easiest one, the easiest big problem to solve is just getting rid of the paper wall that prevents builders from building housing. | ||
| If we do that, we can solve, or at least make easier to solve a bunch of major problems. | ||
| And then we can get onto the hardware. | ||
| There's a lot of things that are much, much harder than getting housing regulations right. | ||
| It's pretty easy to say, hey, look, there's a playbook in Texas. | ||
| There's a playbook in Washington. | ||
| There's a playbook in Maine. | ||
| If Massachusetts wants lower housing costs, they can just copy what Maine did last year and they can get significantly lower housing prices over the next 20 years. | ||
| Or they can keep debating it, which is what they're doing now and doing next to nothing. | ||
| We'll go to Lester in D.C. Lester, you rent in Washington, D.C. | ||
|
unidentified
|
Yeah, I rent. | |
| And my name is Lester Cuffey. | ||
| I'm the executive director of DC Coalition for Housing Justice. | ||
| I've been listening to the discussion that I believe the gentleman and I will have a, we will definitely have some differences. | ||
| But I want to say this. | ||
| Number one, rent control. | ||
| Somebody called about rent control. | ||
| Number one, rent control is not a far-left solution. | ||
| It came from the Nixon administration. | ||
| Okay, that's the first thing. | ||
| Number two, the issue in America is affordability. | ||
| Okay, I think more and more we're beginning to realize that the American view of homeownership is becoming a nightmare because it's a financial burden. | ||
| Not everybody wants to become a homeowner. | ||
| There are alternatives to homeownership, like investments in co-ops or land trusts or single-family developments. | ||
| Okay. | ||
| I'd like to know, is there effort to invest in those types of projects, co-ops, land trust development, single-family development? | ||
| Because many of the people who are now homeless, most of these people have lost their homes and connect because they cannot afford the cost of home ownership. | ||
| All right, Lester, we'll get a response. | ||
| Mr. Firth. | ||
|
unidentified
|
Thank you. | |
| So rent control, wherever it came from, originated during World War I. | ||
| So I think that was prior to Nixon. | ||
| I said that like the, should we consider these other things? | ||
| Yes, all of the above. | ||
| And, you know, with respect to homeless individuals, I don't think most of them are at the cusp of home ownership, but they could certainly rent a room. | ||
| In a lot of cities, they do. | ||
| If you look at what cities have high levels of homelessness and what cities don't, it's not about which cities have a lot of drug abuse or which cities have higher mental illness rates. | ||
| It's about housing costs. | ||
| So actually the richest cities, the cities with the lowest poverty rates, like San Francisco, they have the highest rates of homelessness because it's so expensive to rent a room. | ||
| And having solutions where somebody can build a structure that's not too expensive, doesn't have a lot of bells and whistles, and then they can rent out rooms for cheap. | ||
| We actually, at my institution within George Mason, we just published an interesting paper by some California researchers, one of whom was formerly homeless, about the sort of regulatory hack in LA where they're building something called double duplexes. | ||
| And nobody, none of the regulators intended this. | ||
| This is not at all what the government wanted. | ||
| But some investors said, got a, you know, read the code, said, hey, we found a loophole in this new code where we can build these big boxy buildings called double duplexes and rent them out by the room. | ||
| And I bet the neighbors don't really like these, but the reality is you can now get a essentially a bed in a dormitory in LA for $500 or $600 a month sometimes, maybe $800 or $900 if it's a little bit nicer. | ||
| And that's so much cheaper than the alternatives. | ||
| And in a city where young professionals, students are sometimes living in their cars, that is a huge improvement. | ||
| And yeah, maybe the neighbors don't like it, but I would way rather have a struggling person working minimum wage have a room in a dorm on my street than have to live in a tent on my street. | ||
| We'll go to Baltimore, Gary. | ||
|
unidentified
|
Welcome. | |
| Could you please tell the viewers about this thing called RealPages and how it allows corporate landlords to control inventories and set rental prices? | ||
| It's also important that you distinguish more clearly the differences between the ownership market and the rental market. | ||
| Thank you. | ||
| I'll take your answer off there. | ||
| Thank you. | ||
| I love Baltimore. | ||
| Yeah, so RealPage is a website that allows property owners, big multifamily property owners or small multifamily property owners to use their software to sort of price properties according to sort of the optimum for the market. | ||
| Sometimes that leads to lower rents than otherwise, right? | ||
| So multifamily owners, the worst thing for them is a vacancy because they get $0 out of a vacancy. | ||
| And so sometimes they say, you know, hey, RealPage says we should charge less because this market's pretty soft and we should lower our rents. | ||
| Obviously, sometimes they say, hey, you're undercharging. | ||
| You could make more. | ||
| And then they raise prices. | ||
| So here's the key. | ||
| What RealPage is doing is sharing information. | ||
| And I agree that there's, you know, maybe on average, this is going to raise prices because there are actually a lot of landlords who are pretty inattentive. | ||
| And they've set prices. | ||
| They've got a good tenant. | ||
| They're just ignoring their property and they could actually make significantly more by raising the price. | ||
| So I suspect RealPage affects those rents primarily. | ||
| Ron. | ||
|
unidentified
|
What it can't do, what RealPage can't do is create a shortage. | |
| What creates a shortage in multifamily housing, I think I've been distinguishing between ownership and rental throughout this conversation. | ||
| What creates a shortage is when there aren't enough homes. | ||
| And whether you use an algorithm or you just kind of, you know, muddle your way through and see what rents you can get, you're going to be able to raise prices when there's not enough housing and you'll have to cut rents as they're doing in Austin, as they're doing in Denver, and now I guess Miami. | ||
| You're going to have to cut rents when you have too much competition. | ||
| So let's create competition in the real market. | ||
| And then however investors get their information, they're going to have to charge lower rents. | ||
| Salim Firth is a senior research fellow at George Mason University's Mercatus Center. | ||
| Thank you very much for the conversation this morning. | ||
| We appreciate it. | ||
|
unidentified
|
Greta, thank you. | |
| It's been a pleasure. | ||
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Saturday, American History TV marks the 80th anniversary of the end of World War II, and throughout the day we'll highlight the final stages of the war in the Pacific Theater and Japan's surrender on September 2nd, 1945. | |
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| He also spoke at Thummit, addressing religion and governance. |