Here's How We Fix the Housing Crisis
Summary
TLDRThe American dream is deeply intertwined with homeownership, yet a housing crisis looms due to supply constraints, high mortgage rates, and skyrocketing prices. The government is implementing policies to increase housing supply, such as the Low Income Housing Tax Credit, and exploring innovative solutions like converting commercial properties into residential ones. Zoning reforms and addressing NIMBYism are also crucial. These efforts aim to make housing affordable, boost the economy, and revive the American dream.
Takeaways
- 🏠 The American dream is intrinsically linked to homeownership, which symbolizes stability, success, and a sense of belonging.
- 📈 The housing crisis is a multifaceted issue, driven by factors like insufficient housing supply, regulatory policies, NIMBYism, demographic shifts, and economic factors.
- 💰 Increasing housing supply is a priority for the government as it can help reduce costs for Americans by meeting the high demand for housing.
- 🛣️ Zoning regulations and restrictive policies have historically contributed to the housing crisis by limiting the types and quantities of housing that can be built.
- 🏢 The pandemic exacerbated the housing crisis by accelerating the shift to remote work, which increased demand for housing in less dense areas.
- 💸 The cost of housing is influenced by various factors including mortgage rates, housing prices, and rental costs, all of which have seen significant increases.
- 🏥 Policy tools like the Low Income Housing Tax Credit are being used to incentivize the creation of affordable housing units.
- 🌿 Environmental and NIMBY concerns sometimes clash with the need for new housing, but it's important to balance these concerns with the need for accessible and affordable housing.
- 🔄 The concept of 'filtering' suggests that building a range of housing types, including luxury homes, can indirectly benefit lower-income individuals through a cascade effect.
- 💼 Workforce training programs, funded by initiatives like the American Rescue Plan, are equipping individuals with skills needed in the housing construction sector.
- 🌐 Direct File is an innovative IRS tool aimed at simplifying tax filing for middle and working class Americans, potentially saving them time and money.
Q & A
What is the American dream often associated with?
-The American dream is often associated with the idea of owning a home, which symbolizes stability, success, and a sense of belonging.
What factors contribute to the housing crisis?
-The housing crisis is caused by a combination of policies and regulations, NIMBYism (Not In My Back Yard), demographic shifts, economic factors, and the speculative nature of homeownership.
How does the lack of housing supply impact the housing market?
-The lack of housing supply is a major driver of housing prices, as it leads to insufficient inventory for the demand, causing prices to rise and making it difficult for people to afford homes.
What was the role of the Federal Reserve in affecting mortgage rates?
-The Federal Reserve raised interest rates to combat inflation, which resulted in mortgage rates increasing to over 6 percent, making it more challenging for people to afford homes.
What is the Low-Income Housing Tax Credit and how does it work?
-The Low-Income Housing Tax Credit provides tax credits to developers for eligible projects to incentivize the construction of affordable housing. It is the largest federal support for affordable housing in the U.S., having helped build about 3.8 million units since 1986.
What is the 'missing middle' in housing and why is it important?
-The 'missing middle' in housing refers to the lack of diverse housing types such as townhomes, duplexes, and triplexes. These types of housing are important because they can help meet the demand for affordable and中等-priced housing options.
How does zoning contribute to the housing crisis?
-Zoning often restricts the types of housing that can be built in certain areas, leading to single-family home dominance and limiting the development of more diverse and affordable housing options.
What is the impact of housing costs on the economy and innovation?
-High housing costs can divert resources from productive investments into real estate, reduce economic mobility, and stifle innovation by making it difficult for individuals to take risks and start new ventures.
What is the role of workforce training in addressing the housing crisis?
-Workforce training programs can help provide the skilled labor needed to construct more housing, addressing the labor shortage in the construction industry and contributing to the solution of the housing crisis.
What is Direct File and how does it benefit taxpayers?
-Direct File is a new tool created by the IRS to help Americans earning income through a W2 file their taxes more easily and for free. It simplifies the process, saves time, and ensures taxpayers receive eligible credits and refunds.
How does the housing crisis affect businesses and the workforce?
-The housing crisis can lead to difficulties for businesses in finding employees, as workers may struggle to afford housing near their workplaces. This can impact local and national economies and hinder business growth.
Outlines
🏠 The Housing Crisis and Its Impact on the American Dream
This paragraph discusses the American dream's close ties to homeownership, which is seen as a key to stability, success, and a sense of belonging. It highlights the current housing crisis, where the lack of affordable housing is affecting people's ability to achieve this dream. The discussion includes an interview with the deputy secretary of the treasury, Wally Adeyemo, who explains the government's focus on increasing housing supply to reduce costs. The paragraph also touches on factors contributing to the crisis, such as policies, regulations, NIMBYism, demographics, and economic factors. It emphasizes the need for policy changes at the city, state, and federal levels to address the housing crisis.
🤔 The Paradox of Housing as Both Investment and Necessity
This paragraph delves into the conflicting roles of housing as both an investment and a basic necessity. It discusses the challenges faced due to the high cost of housing and the fear of investment loss, which prevents many from buying homes. The summary highlights the tweet exchange that captures the essence of the housing crisis and the societal push and pull between using housing for wealth generation and as a place to live. It also touches on the impact of NIMBYism, wealth inequality, and the role of housing in the economy, emphasizing that housing affordability is a complex issue that requires building various types of homes to meet demand.
🏗️ Overcoming Zoning and Regulatory Barriers to Housing Construction
This paragraph focuses on the challenges of building new homes due to zoning regulations and other bureaucratic hurdles. It discusses how zoning laws and anti-density regulations have contributed to the housing shortage. The paragraph also explores the historical context of zoning and its original intent to separate industrial and residential areas. It highlights efforts in cities like Atlanta and Austin, Texas, that have reformed zoning to allow for more housing construction. The discussion includes the role of federal grants and incentives to encourage local communities to build more housing and the importance of community-by-community approaches to solving the housing crisis.
💰 Financial Innovations and Investments in Affordable Housing
This paragraph discusses various financial innovations and investments aimed at increasing affordable housing. It highlights the role of state and local governments in utilizing federal funds for affordable housing projects. The paragraph mentions the Innovation Fund for Housing Expansion, a competitive grant fund to support the construction of affordable multifamily rental units and remove barriers to development. It also talks about initiatives to convert commercial properties into residential ones and the cost benefits of such conversions. The discussion emphasizes the importance of building housing near transportation hubs to reduce commute times and the overall impact on the economy and climate change.
🌿 Rethinking City Planning and the Role of Workforce Training
This paragraph emphasizes the need to rethink city planning to make housing more affordable and accessible. It discusses the historical separation of residential and commercial areas and the need for more mixed-use development. The paragraph also touches on the importance of building housing close to opportunities and reducing the reliance on cars. It highlights the role of workforce training programs funded by the American Rescue Plan in preparing individuals for jobs in the construction and other trades. The discussion underscores the connection between affordable housing and the ability to take risks, innovate, and rebuild trust in the American dream.
🚀 Policy Innovations for Housing and Tax Filing
This paragraph discusses the importance of policy innovations in addressing the housing crisis and simplifying tax filing processes. It highlights the need for cities to be accessible to people starting out and the potential for cities to invest in new housing and cultural infrastructure. The paragraph also introduces the Direct File tool created by the IRS, which aims to make tax filing easier and free for Americans earning income through a W2. The discussion emphasizes the potential for policy innovations to help build more housing, reduce costs, and improve the overall economy.
Mindmap
Keywords
💡American Dream
💡Housing Market
💡Supply and Demand
💡Mortgage Rates
💡NIMBYism
💡Low-Income Housing Tax Credit
💡Zoning
💡Workforce Training
💡Innovation
💡Direct File
Highlights
The American dream is closely tied to the idea of owning a home, which is seen as a symbol of stability, success, and a sense of belonging.
The housing crisis is characterized by a lack of supply, high demand, and policies and regulations that contribute to the problem.
The President is focused on increasing the supply of housing as a way to reduce costs for Americans and address the housing crisis.
Mortgage rates have increased significantly in recent years, making it more difficult for people to afford homes.
Housing prices have tripled since the early 1990s, and the median U.S. home gained significant value between December 2020 and December 2021.
Rental prices have also skyrocketed, moving at the fastest pace in 40 years, contributing to the overall housing crisis.
The Low Income Housing Tax Credit is a key policy tool used to incentivize the creation of affordable housing units.
The pandemic exacerbated the housing crisis, with remote work leading to increased demand for housing in certain areas.
There is a need for a variety of housing types, including single-family homes, townhomes, duplexes, and triplexes, to meet different needs and preferences.
Zoning regulations and NIMBYism (Not In My Back Yard) are significant barriers to increasing housing supply and affordability.
The federal government is providing grants and financial incentives to communities that take steps to increase housing supply and remove barriers to development.
Upzoning can stimulate housing supply, and some cities are taking steps to allow for denser housing development.
The conversion of commercial properties into residential use is seen as a potential solution to increase housing supply.
Housing affordability is critical for the economy, as high housing costs can limit labor mobility and constrain economic growth.
Workforce training programs, funded by the American Rescue Plan, are helping to train people for jobs in the construction and housing sectors.
The cost of housing is a foundational issue that affects individuals, businesses, and the overall economy.
Direct File is a new IRS tool aimed at simplifying tax filing for middle and working-class Americans, potentially saving them time and money.
Addressing the housing crisis is seen as a key to restoring the American dream and fostering innovation and economic growth.
Transcripts
The American dream is predicated on the idea of owning a home. Stability, success, a sense
of belonging. It's the figurative and literal key to upward mobility and financial success.
Most people design their lives around owning a home one day, and when it feels like you
can't do that, it sucks. And so that's why it's really important to
understand what's going on in the housing market that makes it impossible for people
to own homes and the policies that are being put forth in order to fix it.
I had the chance to sit down with deputy secretary of the treasury Wally Adeyemo to talk about
the policies that the government is putting forward to fix the housing crisis.
So one of the things that the President has us focused on is increasing the supply of
housing because that's one of the best ways to reduce the cost for all Americans is to
have more supply. Because the housing market has a lot of issues.
It's policies and regulations, it's nimbyism, it's demographics, it's economic factors,
and the inherent speculative nature of home ownership.
created this perfect storm that has led to the housing crisis. The lack of housing supply
is a [00:01:00] major driver of housing prices. We just don't have enough inventory for where
people want to live. also have SCAHA mortgage rates because the Federal Reserve was raising
rates in order to battle inflation.
So if you're trying to buy a home right now, you're dealing with mortgage rates that are
north of 6 percent and they were like 2 3 percent a mere 3 years ago. And housing prices
that have more than tripled since the early 1990s.
Things have cooled off recently, but between December 2020 and December 2021, the median
U. S. home gained 52, 000 in value, and in 11 markets specifically, it grew by over 100,
000, which is basically impossible to keep up with.
And even if you're not trying to buy a home, rental prices have skyrocketed too, moving
at the fastest pace in 40 years. Between May 2021 and May 2022, rents went
up by more than 15 percent to an average price of 2, 000. There is a reason that housing
drove two thirds of the inflation metrics that we've had.
And this is all problematic because housing is a foundational need.
When people talk about how they experience the [00:02:00] economy, that's usually what
they're referring to. But there are also several lines of bifurcation.
There are the 90 percent of homeowners that are locked in below 5 percent and into a fixed
rate mortgage. They're pretty much insulated from monetary policy, and in my opinion, preventing
us from having a recession, but also might feel like they don't have any mobility to
move away. They might feel house rich, but cash poor.
Then there are those who are dealing with the aforementioned mortgage rates and they
feel like they're not able to finance a home and they have no mobility in general. Then
there are those that swoop in with bathtubs full of cash, like the 70 percent of New York
City homes that were bought with cash in the last quarter of 2023.
And then there are the 40 percent of homeowners with no mortgage at all. About 32 million
people, most of which are boomers. We all know this. We're kind of sick of hearing
about it. So let's talk about the policies that are being put in place in order to fix
it. Unfortunately, or fortunately, this is a problem
that has to be solved at the policy level. Something that happens at city, state, or
federal. And luckily, there are many policies that are being put into place in order to
fix this.
So let's first [00:03:00] talk about the initiatives that are around expanding home supply.
So one of the things that the President has us focused on is increasing the supply of
housing because that's one of the best ways to reduce the cost for all Americans is to
have more supply. Ultimately, there is so much demand for housing
in this country because since the financial crisis, basically, we've under invested in
building housing. And the pandemic only, uh, only created worse
than that problem. So yes, the pandemic did indeed worsen the
housing crisis. There was a massive shift to remote work during the pandemic, and according
to the San Francisco Federal Reserve, that accounted for more than half of overall house
price growth during that time. But the pandemic only exacerbated the issues that we already
had in the housing market. We have underbuilt since the Great Recession,
because a lot of home builders got scared. And so we've existed in this world where we
don't have enough housing units for the number of people that want them, and now it's going
to be about how do we reverse the years and years of underbuilding.
So treasury, one of the things that we have is the low house, the low income housing tax
credit, [00:04:00] which is one of the ways that we help to incentivize the creation of
housing. The Low Income Housing Tax Credit provides
tax credits to developers for eligible projects to incentivize building affordable housing.
It's the largest source of federal support for construction and rehabilitation of affordable
renting housing across the country, building about 3. 8 million units since 1986. The new
income averaging rule allows flexibility around mixed income developments, which is important
because we need all types of housing, something I'll talk about a little bit later.
And the president has proposed as part of his, um, state of the union address that we
use the low income housing tax credit to create 1. 2 million additional units of housing all
over the country that will help bring down the cost of housing, not just for the people
who get those new units, but for everybody, because more housing in your community will
mean that it'll. Um, meet the demand and hopefully decrease
the cost for all of us Decrease the cost of housing for all of us
sounds great, but this gets into the confusing part of the housing market. What is a house?
What is it? Is it meant to be a speculative tool? Is it meant to be an [00:05:00] investment?
Is it meant to be something that we live in? What role does housing play in our lives?
This series of tweets probably captures the confusion better than any paragraph I could
write or say. So Elizabeth Warren tweeted, America is in the middle of a full blown housing
crisis. There are a lot of ways to measure it, but I'll start with the most basic. We
are 7 million units short of what we need to house people.
What can we do? Increase the housing supply. It's 101. And somebody responded, I'd like
to buy a house, but houses are pretty expensive. At the same time, because houses are so expensive,
I worry that something might happen to drop their price, making a house a bad investment.
So I'd like to buy a house because it's a good investment, but I'm worried that the
house price will drop, making a bad investment. As Derek Thompson wrote about this push and
pull in his recent piece, in the U. S. our houses are meant to perform
contrary roles in society, shelter for today and investment vehicle for tomorrow. This
approach creates a kind of temporal disjunction around the housing market, where what appears
sensible for one generation, please no more construction near me it's annoying and could
hurt my property [00:06:00] values, is calamitous for the next. Wait, there's nowhere near me
for my children to live. And so that's the crux of the housing crisis.
We have this inherent push and pull between housing being the wealth generation tool for
the bottom 50 percent getting into my favorite chart that shows the breakdown of wealth,
and you can see that the bottom 50 percent have most of their wealth tied into their
home, and then being something that we're meant to live in and build community around.
Can you really make a ton of money off something that you're supposed to be housed in? does
it make sense? And so housing is the foundation for how we
experience the economy. A lot of times the reason that people feel bad is because they're
not able to get into homes that they would want to.
And a lot of times people will block new housing because they want to preserve the value of
their home. And that's NIMBYism, not in my backyard, avoid
building around me, please. A lot of older homeowners will spend a lot of time blocking
new development of housing for a variety of reasons. They're also staying in their homes
a very long time. So we have this situation where new housing isn't being built and then
new housing isn't coming on the market. Empty Nest baby boomers [00:07:00] own 28%
of the nation's large homes, while millennials with kids own just 14%. 56% of homeowners
aged 60 plus said that they will never sell their home. And there are also immense tax
breaks forcing nears to stay in their homes, so it makes sense that this would be going
on. There's also the lock in fact, which is what
Lance Lambert wrote about recently, where people are tied into this mortgage or they
don't have one at all, so why would they move? And to be fair, the younger generation is
buying homes. Roughly one in four Gen Zers are homeowners, with many buying during the
pandemic according to Redfin. But you also have an increasing number of
the younger generation living at home, which this is a bifurcation issue. This is a wealth
inequality problem. And there's still this older homeowner and
their blueberries meme because of the intensity of the pushback sometimes to building new
housing. And it's not just an age thing. Jerusalem
Dimsos wrote about how the Yanbis and climate change activists were butting heads in Minneapolis,
with the climate activists freaking out about development because of the environmental costs.
And the environmentalists are wrong about the environmental costs of building [00:08:00]
new housing, they're wrong about trees and open space and water quality,
In fact, not building new housing can lead to sprawl and it can lead to more cars and
vehicles and can actually be worse for the environment than not building at all.
As DimSauce writes, About 425, 000 people currently live in Minneapolis.
Despite all this change, Butler's Wildflower Sanctuary remains a public park, quiet proof
that growth and preservation don't have to be at odds. Even if triplexes replaced single
family homes in nearby neighborhoods, from the Sanctuary of the Garden, no one would
be able to tell. And that's the problem with NIMBYism is that
there's a rejection of change. But we need the change in order to make homes more affordable.
And housing affordability is not just about building single family homes, it is about
building these triplexes and duplexes, because we need 1. 86 million new homes per year into
2033 in order to keep up with demand. And this gets into the missing middle in housing,
where we don't have enough townhomes, we don't have enough duplexes and triplexes, etc.
And we could create millions of homes just [00:09:00] by turning single family homes
into these. Building all types of homes is important because
building is important. And this gets into the idea of filtering that even building,
like, luxury style homes can help with the housing crisis. A rich person would move into
the luxury housing, leaving another space open for a different person, that person would
move into the previous space, and so on and so forth.
Kate Piddington of UC Berkeley found that rents fall by 2 percent for parcels within
100 meters of new construction, and the risk of displacement is lowered to improving overall
neighborhood quality. Stephen Hoskins has put together a treasure
trove of research papers that get into the value of building new homes, what it looks
like to build new homes, the consequences of building new homes, and he cites two papers
that talk about this idea of filtering, with one of the papers stating that Building new
homes, even expensive ones, leads to important trickle down effects.
Thus, stimulating the supply of new homes is a viable approach to improving the housing
situation of the poor. A study by the Minneapolis Federal Reserve found the same thing. New
units help keep current prices down for everyone by opening up new opportunities for low and
moderate income [00:10:00] renters over a few short years through a chain of residential
moves. And so I'm saying all these things. So why
can't we just build more homes? Zoning.
I think zoning is a nice way of putting it. I think one of the things that one of the
challenges we have is that many people don't want more housing in their community because
they want to preserve the community the way that it looks at the moment. And part of our
goal is to make the case to people that building more housing can be additive to the value
of your community and improving it. There are a lot of headwinds to building housing,
and zoning is absolutely one of them. The Nice Canon Center has put together a really
brilliant paper talking about how we got here, and how, uh, we've experienced housing crisis
before, and how we've gotten out of them previously. A lot of it is anti density regulations, as
well as, um, resistance to, uh, to mass transit because we did have a housing crisis in the
1880s, but that was mostly a population issue, not a political issue.
We started building elevators and rail rapid transit, enabling people to live up or [00:11:00]
travel into cities. But then backlash began because people were like, I don't want all
these big buildings around me. And they write. zoning emerged as the mechanism to control
not only unwanted economic activity, for example, the defensible purpose of limiting areas in
which industry could settle, but also unwanted neighbors.
And so zoning has really choked out a lot of cities. Charlotte, North Carolina, 70 percent
of that land is dedicated to building single family homes. In Los Angeles, 70 percent of
that land is dedicated to building single family homes versus building more middle,
missing middle housing and then within zoning as well, there's minimum
lot sizes, height restrictions, parking requirements, even things like leaving space for our gigantic
fire trucks to make turns, which is important, but the fire trucks are huge. And so there's
all of these things I have to keep in mind when you're building.
And then the politics get messy too, like the city of San Francisco recently voted to
downzone, making it even harder to build homes in a city that has one of the worst housing
crises in the country. And then you have cities that [00:12:00] are
upzoning as well, as Maltman and Ryan found in their working paper in 2024, upzoning can
stimulate housing supply. If you make it easier to build homes. homes will be built.
I'll go back to my visit to Atlanta, where the mayor has been able to make the case to
that city and to his constituents that making modest changes to the way that zoning has
worked is going to improve not only the lives of people who get access to this new housing,
but it's going to improve the economy for everyone in Atlanta.
And I think that's true for communities all over the country.
And that's what we saw in Austin, Texas, a gym, surprisingly, for zoning reform.
Because Austin, Texas is building enough housing, the rents there went down 7%.
They up zoned 170 acres to allow buildings up to 350 to 420 feet. Ended minimum parking
requirements. Eliminate eliminated single family zoning and allowed three homes on each
residential lot, allowing for duplexes and triplexes, and allowed for tiny homes and
accessory dwelling units. And this is what we could also see in Burlington, Vermont,
[00:13:00] as they just totally reformed their zoning, allowing for two buildings on every
parcel and fourplexes everywhere. But zoning is still problematic in many places,
and housing codes can also be a headache, specifying minimum off street parking, minimum
lot size, service coverage, mix of bedrooms, curb cuts, kitchen ventilation, which is great,
right? Like, it's important to have some sort of framework in place, but it ends up preventing
more growth than encouraging it. For example, according to Aaron Lubeck, a
lot of suburban America is codified to, you know, All of these things. Setbacks, sidewalks,
planter strips, curb to curb, side setbacks, impervious surface max, density, two off street
parking spaces per unit, minimum lot width, and a minimum lot size.
And the permitting process can be an absolute racket, too. There was a developer in Boston.
who gave a 750, 000 donation to a neighborhood association, presumably so they could go and
build a new development in that neighborhood. The compounded effect of all of this, the
housing codes, the restrictive zoning, and racketeering, [00:14:00] um, ends up with
cities that are not designed for people and ends up creating this shortage of housing
because you can build, but it's hard. As Deputy Secretary of the Treasury Adeyemo
says, And in order to do that, what the administration
has done is we've put together grants. For local communities that are willing to take
on, um, some of those interests and to, uh, to advance building more housing in communities
and changing the rules to make that possible. Ultimately, the way we're going to solve this
problem is we're going to have to do a community by community, which is hard, but we think
that the thing we can do in the federal government is create financial incentives that help communities
that are trying to do the right thing. Pay for that going forward, and we've seen
success.
It has to be community by community. And a lot of local communities are taking this on.
Montgomery County, Maryland is a great example of this because they just decided to start
bidding on projects because developers require a 20 percent profit, but the government doesn't.
[00:15:00] And so they stepped in and they said, you know, these projects aren't being
produced at a loss. They are generating money, but they're not
generating 20%. So they've built a 268 unit mixed use project. Income mixed use construction
project that is financed through a hundred million dollars fund created by the county
government. The fund does partner with private developers offering them large discounts,
which most developers are pretty happy about. That is now this huge complex is being followed
by a 463 unit complex for seniors and families, and a 415 unit complex across the street.
Because if you give people money and a way to build, they're going to do it.
Most of the money that the federal government gets, we provide the states and local governments
that then spend it on things like affordable housing. For example, as part of the American
Rescue Plan, we gave state and local governments more than 350 billion. Just last week, I put
out a blog that gave those state and local governments more flexibility to use any of
that remaining money to do exactly what you [00:16:00] said.
Come in and provide resources to either complete housing projects or build new housing projects
in order to make sure the remaining demands in our communities.
There are also things like the Innovation Fund for Housing Expansion, which is a 20
billion competitive grant fund that would support the construction of affordable multifamily
rental units, incentivize local actions to remove unnecessary barriers to housing development,
pilot innovative models to increase the production of affordable and workforce rental housing,
and spur the construction of new starter homes for middle class families..
There are also initiatives like converting commercial properties into residential properties.
35 billion has been dedicated towards that. None of it has been used yet because, uh,
the stipulations are quite intense. The environmental review, the permitting processes, everything
that we just talked about, um, in commercial to residential is hard, but it is starting
to happen. Sure. Yeah, I think, you know, a few months
ago I was in Atlanta, and I had a chance to go with the mayor to a project that they are
doing to create affordable housing, [00:17:00] using a commercial real estate property.
I know in places like Cleveland they're doing the same thing. And while they may not be
using the 35 billion that's been set aside as part of the infrastructure package, They
are using federal money. They're using American rescue plan money to build some of this housing.
So from our standpoint, what we want to do is create enough flexibility with all of the
federal resources. So cities and states can use them to build affordable housing in any
way that they want. And it is possible, according to Commercial
Observer, construction costs for ground up residential development in Manhattan could
run 500 to 600 a square foot, while a conversion generally costs between 300 and 400 per square
foot. So it is cheaper to convert commercial to residential rather than build an entirely
new residential. But as I've looked into it, because I agree
with you that ultimately, where possible converting commercial real estate into residential housing
makes a lot of sense. They're like practical issues, some of them being that there's just
not enough bathrooms in a commercial real estate bill to turn it into apartment buildings,
[00:18:00] but then their local political issues where many of these local communities
would rather try and hold on to commercial real estate because of the tax revenues.
To turn it into housing. But ultimately, I think mayors like the mayor in Atlanta and
leaders all over the country know that one of the biggest challenges we face today is
that housing cost too much. And the only way that we're going to address this challenge
Is by building more housing and helping people get into housing that is affordable for them
over the long term. The incentives just have to be in place and
commercial real estate is a problem within itself, but it gets into the value that businesses
get from building more housing, because this is not just an individual issue. It's not
just that people can't go and live the American dream, it's that businesses can't find people
to work for them.
one of the part of my job is talking to CEOs and small business and large business leaders.
And what they tell me is that It's hard for them to find employees. And when they find
employees, it's hard for those [00:19:00] employees to afford housing near the places
where they want them to work. So housing isn't only a challenge for individuals. It's a challenge
for businesses in our country too. So building housing is going to contribute positively
to the economy locally, but also nationally for us as well.
That's why I think if you talk to a business owner, it's The things that they're often
talking about is workforce training and more workforce housing so that we have housing
for the employees that work at their factories and work at their companies that is affordable
for them. And this impacts the entire economy.
And I think that the thing we have to think about, and you said this already, housing
is at its, at a core critical to the economy, but also critical to our communities.
And the idea that people have had to live further away and commute further to come to
work has huge costs for not only our climate, but for our communities, because that hour
and a half drive that could be a [00:20:00] 15 to 20 minute commute is the difference
between being able to coach Little League and instead sitting in the car just from the
standpoint of community impact. But it also comes at huge cost to our infrastructure
in our country. And that's partially why. We're very focused on trying to build more
housing, multifamily, but also single family that is close to transportation hubs. So subways
and bus lines in order to reduce the impact on the planet of the fact that right now for
too many Americans, they're not able to afford to live near their place of work.
So building more housing, building housing that's close to opportunity is going to have
a critically important Impact not just on the individual who gets that housing, but
on the entire on the economy, and also on our ability to meet some of our goals when
it comes to things like climate, climate change That is an extreme cost of infrastructure
per square foot, something that Governor Doug Burgum [00:21:00] highlighted in a recent
talk. Zoning came during the Industrial Revolution,
when there was a lot of like air pollution, other things say, Hey, we're gonna have the
factories here and the people here and we got to keep them separate. And then we went
even further and said, Well, here's the kind of homes that could be in retails there.
And we just, you know, it was a one dimensional map. And you draw it out and say everyone,
all these four things have got to be separate. And yes, we that was great for that was great
for People have built roads and it's great for for the car companies, and then we built
a city that's design. We built cities all over America that are designed for automobiles
and not designed for people. And then if you take a look at your cost,
any anybody that's been a mayor like Spencer has been the cost of running a city is the
linear feet of everything. It's a linear feet of sewer and water and sidewalk and roads.
And then when you get more of that, you need to have more fire stations. Low income.
If you got if you have a neighborhood that's all houses. If you want to have a coffee shop
that looks like a house, you should be able to coffee shop. Because then people say when
I, Hey, I leave my starter home, I got to move to a new home. It's got to have three
cars, three car garage. Why does it have three car garage?
Because the, [00:22:00] the mom, the dad, and the kids all got a car to be able to drive
to school, drive to church, drive to a restaurant, drive to a grocery store. Of course, you need
all that because you can't walk to anything. And part of, then people will, you know, they'll
go on a vacation and they'll say, wow, that was the most amazing vacation I ever had.
Why? Well, because we were, We went to someplace where we could walk and everything was right
there. Well, you can actually have that in our own states. You just have to design it.
We haven't sent, you know, there's places in northern Europe that have snow where people
bike all winter long. You can't hardly, you can't find a place like that in the U.
S. because we don't put the investment into, uh, building the infrastructure for multi
modal transportation. So I think one of the things that, that we have to look at as a
country, our housing costs are high. In part because of the way that we've designed our
cities and and I think there's a again this this form to check out Form based code.
There's some really interesting things that are there and this and you guys talked about
beginning the granny flats and other stuff But part of is we've got to get the coffee
shop the barber shop and law firms back into Residential neighborhoods in ways that can
help lower the [00:23:00] cost and create services where you don't need a car for everything
We have to redesign our cities, we have to build more housing, we have to think about
how the cities are being developed.
And then of course there's the jobs component too.
I think one of the things that we've done is we've seen a huge influx in workforce training
programs that have been funded by the American rescue plan.
Traditionally, I think the federal government spends maybe somewhere in the neighborhood
of 1 billion on an annual basis on workforce training. Because the American rescue plan
over the course of the last three years, we spent 12. 8 additional billion on workforce
training to help people get the skills they need to do the jobs that are need in the economy.
Uh, I visited a location a few months ago in California where they were training people
to become welders. Um, which is a profession that's needed or so much of the construction
trade. These were, um, Americans who had fallen were hard times, maybe spent a little time
in prison or lost a job. They couldn't train them fast enough [00:24:00] to go from being.
The training program to getting an entry level job that paid them 60, 000. Um, I visit another
workforce training program in Atlanta, where they're also going to train people to go into
these construction trades. And the key is that for many of these trades, one of the
things that is best for these people who do these jobs Is that you started an entry level,
some of them include apprenticeships that will allow you to earn up to six figures in
these jobs. So the key for us is making sure that we invest
in the training so that we have the employees to not only build housing, but to build all
the things that the economy needs. And because of the money that has been been invested in
workforce training by communities. But also by the federal government, I think we're better
positioned to do that. But ultimately, finding more people to do
these jobs is going to be a critical path, a critical thing that we have to do to be
able to succeed at building more housing.
There are many policies being put into place to fix the housing crisis, and it's not just
subsidizing [00:25:00] demand, but it is expanding supply. But we have all these variables, status
anxiety, the dual role of housing, housing as a retirement account, wealth inequality,
the constraints on economic growth and labor mobility, longer commute times, and sprawl,
and lack of innovation. In Negative Yield New York, Alex Yablon wrote
of the importance of cities being accessible to those just starting out, and how policies
like what we just talked about could fix it. He writes,
but once the city gets access to extremely low interest credit, it could also invest
in massive amounts of new housing to drive down the cost of living, as well as cultural
infrastructure. The city could create new studios, rehearsal
spaces, galleries, and performance venues to ensure that its vital artistic economy
can thrive alongside our other sectors that have increasingly crowded out the underground.
And there was another quote that talks about how when people don't feel free, that is constraining,
obviously. There's a deep sense in which freedom is achieved through the basics of life being
extremely plentiful and cheap. When we don't further that, people's lives become less free.
[00:26:00] When you feel like you don't have the mobility to go and get a start in a big
city, or you're too economically constrained in order to take a risk on yourself, That
impacts the entire economy. The downstream effects of not having enough
homes and not enough cheap homes for people has really impacted innovation. It's the housing
theory of everything. Lowering housing costs creates so many downstream benefits and frees
up so much capital. There was a Bloomberg piece that had a killer paragraph that said,
Instead of driving more innovation and growth, the bounty from today's knowledge economy
is instead diverted into rising land costs, real estate prices, and housing values.
The result is that working and middle class Americans are forced to devote ever larger
shares of their hard earned money for shelter. The central contradiction of capitalism today
is that a huge share of its productive surplus ends up being plowed back into dirt. Oh my
gosh. But you know, a lot of people talk about it's
time to build with regards to startups. They're like, go build, [00:27:00] go do this thing.
But the thing is, um, we kind of got to, you can think of it like a Maslow's hierarchy
of needs, right? The triangle. If we're not addressing the foundation of how people experience
the economy, it's going to be. difficult for them to go and take a big risk
on themselves. And so then you have sort of this selection bias where the only people
that are taking risks are the, those that have been able to have that risk finance,
whether that be through parents or maybe they figured it out, right. But having the ability
for more people to take on more risk in terms of how they direct their lives, not in the
stock market, but in terms of how they direct their lives is incredibly important.
Having some sort of fail safe measure in place for them, um, Through maybe cheap housing
is important too. Allowing more housing would ultimately allow
more people to build. It would remove probably elements of our structural and social isolation.
It would help to rebuild trust in institutions. Right now a lot of people feel misled because
the American dream has [00:28:00] evaporated. And so the faster that we can address housing
as we're doing through these policies, We can connect with each other and maybe have
hope in the American dream again.
And finally, direct file is another policy tool that will help innovate in the tax space
specifically. Removing middlemen. direct. File is a new tool that the IRS has
created that's going to help Americans. And for now it's going to be a pilot, but help
Americans who are. Earning an income through a W2, get a paycheck.
Middle class, working class. Americans file their taxes more easily, more easily, and
the, it's gonna make it faster for them to file their taxes, but it's also gonna be free.
Mm-Hmm. . Uh, and that's different than what is the normal experience of most Americans?
The average cost for an American to file their taxes using a prepare service is $240, and
it takes them 13 hours to do. The last time the IRS got money to invest
in technology, it was the 1960s. Before we had the [00:29:00] ATM, before man went to
the moon, before we had the personal computer, was when they built their infrastructure.
They are still building in a language called Cobalt. At the IRS. So what's happened is
the Congress is part of the Inflation Reduction Act.
Gave the IRS money and what they're doing with that money is they're using it to make
it easier for the American people To interact with the IRS and one of the things that we've
done Is create direct file and the way it makes it easy is because the IRS is the agency
that um deals with the tax code They're able to create a product that both allows you to
get intuitive answers to your questions, but also has a calculator that will help you as
you're filling out your taxes, make sure that you're getting the credits that you're eligible
for. So if you're, uh, if you're a firefighter
and you're filing out your taxes, it'll make sure that if you have children, you make sure
you're claiming the child tax credit so that you get the incentives and the money that
you deserve, [00:30:00] um, from the federal government as you're filing your taxes and
you get the right of return. The thing that you have is you have a choice and you can
make the choice paying money to one of the online providers and taking the time it takes
to use them. Or you can use a free product that's given
to you by the government that will allow you to help calculate your taxes and hopefully
will go faster. It's ultimately a choice you have to make and I think each American will
have to make a choice that's right for them. But our hope is that for a middle class family,
uh, they're going to make the choice that means they have to pay no money and they have
to spend less time so they can invest that money and time in their families.
Policy innovation is everywhere and it is indeed time to build.
Because we know that's one of the most important issues, no matter your age, no matter where
you live in the country, is the cost of housing is something that, um, is. To is higher than
you. We want it to be and we want to do everything we can to bring it down
استعرض المزيد من الفيديوهات ذات الصلة
![](https://i.ytimg.com/vi/e3_jC_Oe8hQ/hq720.jpg)
Meet The ‘Super Commuters’ Who Spend Up To 6 Hours A Day On The Road | Megyn Kelly TODAY
![](https://i.ytimg.com/vi/RxKI9zKhDNE/hq720.jpg)
Housing hell: How we got here and how we get out.
![](https://i.ytimg.com/vi/5kcpboFM8Lw/hqdefault.jpg?sqp=-oaymwEXCJADEOABSFryq4qpAwkIARUAAIhCGAE=&rs=AOn4CLAQNMNwq25muMv5oRONNAG1nr0VbA)
Why are so many seniors in San Diego aging without a home? | NBC 7 San Diego
![](https://i.ytimg.com/vi/GDfLFUDClWg/hq720.jpg)
Interventionist Supply-Side Policies | A Level Economics
![](https://i.ytimg.com/vi/5btpSJv_AZs/hq720.jpg?sqp=-oaymwEmCIAKENAF8quKqQMa8AEB-AH-CYAC0AWKAgwIABABGGUgZShlMA8=&rs=AOn4CLBmrc-IO9Yy_RePzo4heqZdIXx-Wg)
When The Housing Crash Will Happen
![](https://i.ytimg.com/vi/Guq-uRNqCns/hq720.jpg)
US Happiness PLUMMETS As Youths Say American Dream DEAD
5.0 / 5 (0 votes)