WEBVTT - Part One: Why is the Rent So Damn High? 0:00:03.040 --> 0:00:05.560 Well, you know, I just I don't know, Sophie. I 0:00:05.800 --> 0:00:09.440 think that you're kind of being unfair when you say 0:00:09.680 --> 0:00:13.440 the audience is just terrible people and you hate them 0:00:13.520 --> 0:00:16.079 and you want to throw boiling water from a cast 0:00:16.120 --> 0:00:18.520 iron skelet on them. I don't know that that's fair, Sophie. 0:00:18.520 --> 0:00:20.160 That seems kind of mean to me. But Robert, I 0:00:20.640 --> 0:00:23.840 would never say that was a direct quote from your diary. 0:00:23.880 --> 0:00:26.200 That was that was weren't my words. That's what you said, 0:00:26.560 --> 0:00:29.400 so you can't prove that. I mean, it was in 0:00:29.480 --> 0:00:34.479 your blog. Well, who knows what's a blog it was? 0:00:35.200 --> 0:00:40.840 I remember I followed you. Wow. Wow, I feel attacked 0:00:41.280 --> 0:00:45.200 in my own podcast, my own podcast that I don't 0:00:45.280 --> 0:00:49.920 with my own two hands. Unbelievable. Welcome to behind the mastause. 0:00:50.159 --> 0:00:56.720 I guess it's Samantha big Bay. Robert evans Am slandered 0:00:57.880 --> 0:01:01.880 to a terrible degree unfair early despite having never done 0:01:01.920 --> 0:01:06.440 anything wrong never How are you doing, Samantha McVeigh. Hello. 0:01:06.720 --> 0:01:09.360 I know again I aged myself with the zango reference, 0:01:09.360 --> 0:01:10.759 so I know people are going to be like, oh 0:01:10.800 --> 0:01:16.640 my god, what is wrong with you? You're welcome. I'm 0:01:16.640 --> 0:01:20.240 really glad to throw it back at this early. Yeah, Samantha, 0:01:20.319 --> 0:01:26.120 what's what's? What is? That's that's your whole that's your 0:01:26.120 --> 0:01:30.200 whole question. What is? How is what? What is? But 0:01:30.680 --> 0:01:34.120 how is it? Yeah? Exactly how is what? And what 0:01:34.319 --> 0:01:37.640 is how? Is there an answer question? There never was 0:01:38.280 --> 0:01:40.560 a r Are you asking if she's the host of 0:01:40.560 --> 0:01:44.800 a podcast called stuff? Mom never told you? Is she? Well? 0:01:45.160 --> 0:01:47.480 Is she? This is why I keep you around, Sophie. 0:01:47.760 --> 0:01:49.560 I know that you've got this better than I do. 0:01:49.880 --> 0:01:53.360 This has been a great introduction. Robert would never have 0:01:53.400 --> 0:01:58.559 gotten there. I would have gotten there. I I love 0:01:58.640 --> 0:02:05.240 our audience, I of all of everybody the statistically speaking, 0:02:06.040 --> 0:02:09.520 So this is a podcast, it's about bad people. Normally, 0:02:09.720 --> 0:02:12.040 we're doing a little bit of a different thing today, Samantha, 0:02:12.080 --> 0:02:14.960 and I've brought you on. I've brought you on because, 0:02:15.120 --> 0:02:16.960 as I can tell right now, you exist in a 0:02:17.000 --> 0:02:20.960 black void. Based on your and I assume that that's 0:02:21.000 --> 0:02:23.639 what goes on in the heart of anybody who understands math. 0:02:25.240 --> 0:02:27.000 I feel like that was racist. Is that racist because 0:02:27.000 --> 0:02:38.480 I'm a whoa? It's because you exist within a black void? Oh? Okay, okay, Jesus, 0:02:39.880 --> 0:02:44.280 that is how we we have, like obviously for the 0:02:44.280 --> 0:02:46.399 people listening to this podcast, there's a pretty good chance 0:02:46.440 --> 0:02:49.960 they're renters. They're about third rent. Renters are about thirty 0:02:50.000 --> 0:02:53.120 six percent of households nationwide, or or renter's head thirties 0:02:53.320 --> 0:02:57.200 percent of households nationwide. Um, although those numbers are a 0:02:57.240 --> 0:02:58.880 couple of years old. I don't know if it's that 0:02:59.000 --> 0:03:01.800 was like pre pandemic. Um, do you rent or do 0:03:01.800 --> 0:03:06.560 you own? Samantha, I now officially own because we were 0:03:06.720 --> 0:03:09.720 kind of pushed out from the rental that I had 0:03:09.760 --> 0:03:12.840 because he went up by Uh. I want to say 0:03:13.320 --> 0:03:16.760 on our rent, Jesus Christ. So yeah, you have been. 0:03:17.240 --> 0:03:19.200 That's what we're talking today about why the rent is 0:03:19.240 --> 0:03:21.640 so damn high. Um, and some of the people who 0:03:21.680 --> 0:03:24.000 are responsible. We're gonna try to drill into specific people 0:03:24.000 --> 0:03:27.280 whenever possible, because that's our our bit. But I am 0:03:27.360 --> 0:03:30.200 also in my first year of homeownership. I've been a 0:03:30.240 --> 0:03:34.639 renter the first fifteen years of my adult life. UM, 0:03:34.920 --> 0:03:37.720 And for me, I don't know about you. Most of 0:03:37.800 --> 0:03:43.920 the living situations I was in were like the broadly criminal, 0:03:44.200 --> 0:03:47.080 like illegal, like like the the landlord was breaking a 0:03:47.200 --> 0:03:50.200 law and so my rent was cheaper. We actually liked 0:03:50.240 --> 0:03:51.760 to tell this story a couple of we had to 0:03:51.800 --> 0:03:54.320 like talk a City of Los Angeles inspector out of 0:03:54.320 --> 0:03:57.600 reporting fire hazards in our apartment because we were like, dude, 0:03:57.680 --> 0:04:00.000 i live a minute and a half away from santam 0:04:00.000 --> 0:04:02.000 Anka and we're paying like a thousand bucks a month 0:04:02.040 --> 0:04:04.680 for a room each, Like you gotta you gotta, like, 0:04:04.840 --> 0:04:06.839 you gotta just keep quiet, Like we'll burn to death 0:04:06.840 --> 0:04:09.800 if we burned to death. We'll risk life or death 0:04:10.000 --> 0:04:14.560 for the situation because it's cheap, because it's cheap um. 0:04:14.600 --> 0:04:17.880 But nothing is cheap anymore. It has gotten Rent has 0:04:17.880 --> 0:04:22.160 gotten higher at a ridiculous rate since the pandemic, in particular, 0:04:22.480 --> 0:04:24.919 not that it wasn't raising before, but it's really raised 0:04:24.920 --> 0:04:26.800 a lot. Say, as you just said, you just we're 0:04:26.800 --> 0:04:29.680 about to go up forty year over year. In Miami 0:04:29.680 --> 0:04:32.320 and Tampa, rent is up about fifty of its pre 0:04:32.400 --> 0:04:36.360 pandemic numbers, and nationwide, median rent has topped two thousand 0:04:36.360 --> 0:04:38.960 dollars a month for the first time ever, which is 0:04:38.960 --> 0:04:44.400 inside when I was, you know, a kid fourteen fifteen 0:04:44.440 --> 0:04:46.279 years ago living in my first apart, two grand a 0:04:46.320 --> 0:04:49.000 month is like that's a rich person's rent, Like like 0:04:49.080 --> 0:04:51.039 that's a crazy rich. But I remember going to like 0:04:51.040 --> 0:04:53.800 a friends apartment in Manhattan that was bucks a month 0:04:53.800 --> 0:04:56.719 and being like, what the funk is wrong with you people? Right, 0:04:56.880 --> 0:04:59.360 I'd be seven dollars a month for a three bedroom 0:04:59.520 --> 0:05:03.720 like UM. Now, the fact that media and rent has 0:05:03.760 --> 0:05:06.240 topped two thousand dollars a month is heavily influenced by 0:05:06.240 --> 0:05:09.040 the poll of the big cities. These are very skewed 0:05:09.120 --> 0:05:13.560 numbers that may not reflect most individual people's experience because 0:05:13.600 --> 0:05:16.240 of how big some of the big cities are and 0:05:16.279 --> 0:05:18.840 how high the rent is there. So San Francisco, Seattle, 0:05:19.120 --> 0:05:22.359 New York, Los Angeles, Miami, etcetera. Are the places that 0:05:22.400 --> 0:05:24.360 are skewing the numbers and the places where rent has 0:05:24.400 --> 0:05:28.920 surged the most. But rent is still up basically everywhere. 0:05:29.160 --> 0:05:31.920 It is currently increasing at the fastest rate since nineteen 0:05:32.000 --> 0:05:35.080 eight six UM. And one of the things that happened 0:05:35.120 --> 0:05:37.080 during the pandemic is we had all these people moving 0:05:37.120 --> 0:05:38.720 to cities that they thought would be a better place 0:05:38.760 --> 0:05:42.880 to live because it was remote work UM, which helped 0:05:42.920 --> 0:05:45.360 spread out some of the increases UM. And there was 0:05:45.360 --> 0:05:47.720 a brief period of time where evictions were tamped down 0:05:47.760 --> 0:05:50.480 on somewhat by federal rental assistants, So even though rent 0:05:50.520 --> 0:05:52.599 was rising, it was hard to kick people out of 0:05:52.600 --> 0:05:55.000 their houses. But that has started to run out this 0:05:55.120 --> 0:05:59.440 year and in eviction filings hit pre pandemic levels and 0:05:59.440 --> 0:06:02.039 in many play has exceeded them greatly. So does that 0:06:02.240 --> 0:06:04.719 have an impact. Does the impact of like what's called 0:06:04.760 --> 0:06:08.440 pandemic pricing on rent have have an influence there where? 0:06:08.520 --> 0:06:12.240 Like a lot of places, they especially in big cities 0:06:12.240 --> 0:06:14.000 such as Los Angeles, New York, they were trying to 0:06:14.000 --> 0:06:16.040 fill places, so they gave a lower price and then 0:06:16.080 --> 0:06:19.880 the next year the increase was um offensively high. Yeah, 0:06:19.960 --> 0:06:23.080 that's one of the things that experience. It's it's one 0:06:23.080 --> 0:06:26.840 of the things that's contributed to evictions some cities. It's 0:06:27.000 --> 0:06:29.760 like like Houston in particulars is one city I know 0:06:29.800 --> 0:06:34.279 where eviction rate filings are like pre pandemic levels. Like 0:06:34.360 --> 0:06:36.760 it's massively higher in a lot of cities. And this 0:06:36.800 --> 0:06:40.640 is all that hit hard with that, And immediately as 0:06:40.839 --> 0:06:43.320 as soon as it dropped, the amount of evictions that 0:06:43.440 --> 0:06:46.680 came it was absurd and obscene. Yeah, and it and 0:06:46.839 --> 0:06:50.120 that that's fed into the homelessness crisis. That's this huge 0:06:50.200 --> 0:06:54.120 political thing. And also just like thing thing everywhere in 0:06:54.160 --> 0:06:57.400 the country right now. Um, and it's you know, kind 0:06:57.440 --> 0:06:59.560 of difficult to grock an absolute numbers how many house 0:06:59.560 --> 0:07:02.440 those people and encampments and other situations, because those aren't 0:07:02.480 --> 0:07:06.479 easily recorded in federal and state statistics. But homelessness is 0:07:06.520 --> 0:07:09.400 surging in a number of American cities. And all of 0:07:09.440 --> 0:07:11.960 this is ancillary to the question why is the rent 0:07:12.080 --> 0:07:14.960 so damn high? Now, if you go to like the yeah, 0:07:15.080 --> 0:07:17.320 exactly why is there? I know we're about to go 0:07:17.360 --> 0:07:21.200 down to this. There's gonna be black Hawk mentioning, Zillo mentioning, 0:07:21.800 --> 0:07:24.600 Airbnb mentioning. Are we going down these routes. We're gonna 0:07:24.600 --> 0:07:26.080 be talking about some of these. We're gonna be talking 0:07:26.120 --> 0:07:29.400 about a number of those. This is I want to 0:07:29.400 --> 0:07:31.000 say right now. We're not gonna be this isn't going 0:07:31.040 --> 0:07:33.760 to be a comprehensive list of all of the different 0:07:33.800 --> 0:07:38.440 things affecting rent prices, focusing on some particularly bastardy ones. 0:07:39.320 --> 0:07:41.920 But we'll cover a lot of it. So please don't 0:07:42.120 --> 0:07:43.720 get on and be like, well you didn't cover this 0:07:43.840 --> 0:07:45.800 or that. It's like, yeah, man, it's a big topic. 0:07:46.000 --> 0:07:48.000 Like do you do you want us this to all 0:07:48.000 --> 0:07:50.480 be just one boring broad overview of problems. You do 0:07:50.640 --> 0:07:53.520 want us to drill into some weird, fucked up assholes, 0:07:53.680 --> 0:07:55.440 which is what we're gonna Yeah, I got time today, 0:07:55.480 --> 0:07:57.680 so let's go. Yeah. So, if you go to say, 0:07:57.720 --> 0:08:00.160 the New York Times or most other big legacy see 0:08:00.200 --> 0:08:03.360 publications to try to, like, you know, type into Google 0:08:03.680 --> 0:08:06.280 why is the rent so damn high? You'll get various 0:08:06.800 --> 0:08:08.760 versions of the same answer. And I'm gonna quote from 0:08:08.760 --> 0:08:11.160 a New York Times article here. The origins of the 0:08:11.200 --> 0:08:14.200 current homelessness crisis go back decades to policies that stop 0:08:14.240 --> 0:08:17.360 the US from building enough housing. Experts said, seven million 0:08:17.400 --> 0:08:20.360 extremely low income renters cannot get affordable homes, according to 0:08:20.400 --> 0:08:24.680 the National Low Income Housing Coalition. Now, experts like these 0:08:24.680 --> 0:08:26.040 tend to place a lot of the blame on what 0:08:26.080 --> 0:08:28.960 we call nimbies, which stands for not in my backyard, 0:08:29.000 --> 0:08:31.600 and it references the fact that in cities like San Francisco, 0:08:31.880 --> 0:08:35.000 there's a lot of like upper class liberal types who 0:08:35.000 --> 0:08:38.000 make it very hard to build anything besides single family 0:08:38.040 --> 0:08:40.560 housing because they don't like big buildings and they don't 0:08:40.640 --> 0:08:45.200 like being in a dense urban environment. Los Angeles County 0:08:45.200 --> 0:08:48.360 devotes seventy six percent of its residential land to single 0:08:48.360 --> 0:08:52.040 family homes, which is bug fuck uh. This leads to 0:08:52.120 --> 0:08:55.800 sprawling cities, which also require huge road systems, lots of parking, 0:08:55.880 --> 0:08:58.360 YadA YadA, and it leads to higher rent prices because 0:08:58.360 --> 0:09:01.320 there's simply less space to build housing. The New York 0:09:01.360 --> 0:09:05.040 Times also notes quote homeowners also often protest proposed housing, 0:09:05.240 --> 0:09:08.320 effectively blocking it. They fear that more housing, particularly for 0:09:08.360 --> 0:09:10.760 low income families, will change the makeup of their communities, 0:09:10.760 --> 0:09:14.479 will reduce the values of their home. Now in San Francisco, 0:09:14.679 --> 0:09:16.920 what David Chappelle did, supposedly, I know that was like 0:09:16.960 --> 0:09:18.840 a small blue but it was a misunderstanding. But he 0:09:19.320 --> 0:09:23.160 like blocked a housing, like yeah right, yeah, he said 0:09:23.200 --> 0:09:29.560 it was a misunderstanding. George Lucas built a bunch of 0:09:29.600 --> 0:09:34.280 low income housing specifically to funk with his neighbors, his 0:09:34.760 --> 0:09:38.600 rich neighbors. He had had like noise complaint problems with 0:09:38.679 --> 0:09:41.000 his rich neighbors as a result of like the studio 0:09:41.040 --> 0:09:43.600 he ran, so to funk with them, he built a 0:09:43.600 --> 0:09:45.599 bunch of low income housing in the neighborhood because he 0:09:45.640 --> 0:09:49.400 knew it would piss off the other rich people. That's 0:09:49.440 --> 0:09:54.160 so nice, yeah, based George lucast dot dot. Um, he's 0:09:54.200 --> 0:09:58.800 a he's a he's a perfect unproblematic king. So yeah, 0:09:59.040 --> 0:10:01.959 and there's like, are not the New York Times and stuff. 0:10:01.960 --> 0:10:04.079 They're not wrong when they say that nimbies are part 0:10:04.080 --> 0:10:06.880 of the problem. In San Francisco, there were recently a 0:10:06.880 --> 0:10:10.040 bunch of protests to stop a project to convert a 0:10:10.160 --> 0:10:12.800 hundred and thirty one room hotel in japan Town into 0:10:12.800 --> 0:10:16.480 housing for homeless people. Um, like a bunch of ships 0:10:16.720 --> 0:10:20.240 like that happens. California has about twenty three available affordable 0:10:20.280 --> 0:10:23.400 homes for every hundred extremely low income renters, which is 0:10:23.559 --> 0:10:25.560 makes it one of the worst of any state and 0:10:25.679 --> 0:10:28.559 in terms of that problem. Um, so they're not wrong 0:10:28.559 --> 0:10:31.079 when they say that, Like, yeah, the the nimbies are 0:10:31.080 --> 0:10:35.559 a problem. People pro not allowing like multi family development 0:10:35.600 --> 0:10:37.800 and lots and stuff is a huge problem. And I've 0:10:37.800 --> 0:10:40.200 reluctantly come to see that. Like they have a point, 0:10:40.600 --> 0:10:43.160 Uh I have. I don't want to I don't like 0:10:43.240 --> 0:10:45.680 living in high density areas. I would prefer to live 0:10:45.720 --> 0:10:48.720 out in the woods. Um. But but this argument is 0:10:48.720 --> 0:10:51.800 broadly broadly correct. A huge part of the problem is 0:10:51.840 --> 0:10:54.480 that there's denser cities is that we need to have 0:10:54.559 --> 0:10:57.720 denser cities with more multi family z owning and residential areas. However, 0:10:58.440 --> 0:11:00.680 there's also a lot of bullshit in the argument that 0:11:00.679 --> 0:11:02.160 The New York Times is making here and in this 0:11:02.240 --> 0:11:05.000 argument in general, because the way it tends to get pushed, 0:11:05.040 --> 0:11:08.079 and it gets pushed by people like developers and by 0:11:08.080 --> 0:11:11.880 intellectuals who take on the attitude of developers because the 0:11:11.880 --> 0:11:15.200 developers are their uncles or whatever, is that all of 0:11:15.240 --> 0:11:17.559 the homelessness problem is to blame on these liberal city 0:11:17.600 --> 0:11:21.560 policies that just aren't letting developers develop enough. Um And 0:11:21.559 --> 0:11:24.240 And while again zoning is a part of the issue, 0:11:24.679 --> 0:11:28.160 this analysis excises a great deal of the actual problem. 0:11:28.400 --> 0:11:30.760 For one thing, the whole we're not building enough housing 0:11:30.760 --> 0:11:32.920 thing tends to lay all the blame on zoning and 0:11:32.920 --> 0:11:36.760 these darn nimbies. Um. But one of the other problems 0:11:36.800 --> 0:11:40.839 is that like there's not actually people to build that housing. Um. 0:11:40.840 --> 0:11:43.120 This is this is a major problem in the industry. 0:11:43.160 --> 0:11:45.480 And I'm gonna put from a right up on NPRS website. 0:11:46.320 --> 0:11:48.319 By one estimate, the US is more than three million 0:11:48.320 --> 0:11:51.200 homes short of the demand from would be homebuyers. Pandemic 0:11:51.240 --> 0:11:53.640 related supply chain problems aren't helping. They're adding tens of 0:11:53.679 --> 0:11:56.000 thousands of dollars in costs to the typical house. But 0:11:56.040 --> 0:11:57.839 the roots of the problem go back much further to 0:11:57.880 --> 0:12:00.480 the housing bubble collapse in two thousand eight, what I 0:12:00.520 --> 0:12:04.080 call a blood bath happened, says Klaus, who's a contractor. 0:12:04.320 --> 0:12:06.760 It was the worst housing market crash. It's the Great depression. 0:12:06.760 --> 0:12:09.360 Many homebuilders went out of business. Claus was building houses 0:12:09.360 --> 0:12:11.440 in Florida when the bottom fell out. A lot of 0:12:11.440 --> 0:12:13.880 my trades people found other work, went and got retrained 0:12:13.880 --> 0:12:16.440 for new jobs, in law enforcement, all sorts of jobs. 0:12:16.640 --> 0:12:21.160 So the workplace force was somehow decimated, so more cops, 0:12:21.320 --> 0:12:24.480 less construction workers, nobody to build the fucking houses that 0:12:24.520 --> 0:12:26.600 they want to have build, which is not a problem 0:12:26.640 --> 0:12:29.880 that you can lay on zoning or nimbies. That's because 0:12:30.000 --> 0:12:35.200 we It's because there was a fraudulent like banking industry 0:12:35.240 --> 0:12:38.560 that existed to sell people's subprime loans on houses that 0:12:38.600 --> 0:12:43.160 were low quality, massive and built in terrible locations. And 0:12:43.280 --> 0:12:45.640 when that fell apart, suddenly all of these people had 0:12:45.640 --> 0:12:47.959 to find something else to do. And you can't blame 0:12:48.000 --> 0:12:51.079 that on the fucking Nimbies in San Francisco, right, I mean, 0:12:51.080 --> 0:12:53.920 there's all this conversation about funding as well as who 0:12:54.000 --> 0:12:56.280 is actually going to be able to afford it? Is 0:12:56.280 --> 0:13:00.319 it is it truly affordable in actuality, which it often 0:13:00.320 --> 0:13:03.200 winds up not being because like we we have, there's 0:13:03.240 --> 0:13:05.440 like loopholes a lot Like in Portland right now, there's 0:13:05.559 --> 0:13:08.719 a building that's supposed to be affordable housing, but one 0:13:08.720 --> 0:13:10.760 of like the deals the city gets as they get 0:13:10.880 --> 0:13:14.520 or the gives the developers that they can increase rent 0:13:14.679 --> 0:13:17.880 at a greater rate than other places could for a 0:13:17.920 --> 0:13:20.840 certain set amount of years, which like, yeah, it's all 0:13:21.360 --> 0:13:25.000 there's all these fucky ways that it affordable housing winds 0:13:25.040 --> 0:13:27.400 up not being affordable that is not due to zoning 0:13:27.880 --> 0:13:29.400 or they just back out of this. So we had 0:13:29.440 --> 0:13:32.120 a whole project here called the Atlanta belt Line, which 0:13:32.160 --> 0:13:36.120 is supposed to stretch around um our metro area, and 0:13:36.240 --> 0:13:39.080 it was supposed to build up the city, have this 0:13:39.120 --> 0:13:42.160 walkable area, maybe get a rail stage, and I don't know, 0:13:42.400 --> 0:13:44.960 all these great things, but they had to buy out 0:13:45.240 --> 0:13:49.560 a lot of the areas which is predominantly urban and therefore, 0:13:49.880 --> 0:13:52.000 you know, it wasn't it was red line. Once upon 0:13:52.040 --> 0:13:54.680 a time, and it's now valuable because it's within the city. 0:13:54.880 --> 0:13:57.360 So they bought out these houses, pushing people out the 0:13:57.480 --> 0:14:00.400 low um. But the deal they had was we're going 0:14:00.440 --> 0:14:04.200 to put in affordable housing as well. They did not. 0:14:04.280 --> 0:14:06.640 They actually backed down that they'll sub deal so much. 0:14:06.920 --> 0:14:10.720 The originators who proposed this plan created this huge plan 0:14:10.760 --> 0:14:12.560 that was gonna be a thirty year plan. It's still ongoing, 0:14:12.600 --> 0:14:15.400 by the way, multi million dollars from the city, so 0:14:15.480 --> 0:14:18.240 many things that they stepped down and said they were 0:14:18.280 --> 0:14:20.120 no longer a part of this project because it went 0:14:20.240 --> 0:14:23.040 so ugly and that people had come back with sorry, 0:14:23.240 --> 0:14:25.520 just kidding, We're not giving you this property back. We're 0:14:25.520 --> 0:14:28.160 just gonna make millions and millions and millions of dollars 0:14:28.800 --> 0:14:31.120 without any going back to the city or the people 0:14:31.120 --> 0:14:34.720 who we promised that we would help. Bad shocking. Yeah, 0:14:35.080 --> 0:14:37.480 I mean, yeah, that's that sounds like the way it 0:14:37.520 --> 0:14:40.960 tends to go. Um. So, yeah, we have this fucking 0:14:41.000 --> 0:14:45.560 financial crash and home buying eventually slowly recovers after it, 0:14:45.760 --> 0:14:49.040 but building rates never do right. They stay below normal 0:14:49.200 --> 0:14:51.960 after the crash. This continues for like, you know, more 0:14:52.000 --> 0:14:54.120 than a decade because the workers simply aren't there to 0:14:54.120 --> 0:14:56.680 buy houses. So when millennials start to hit what should 0:14:56.680 --> 0:14:58.680 have been their prime home buying years, not only our 0:14:58.720 --> 0:15:01.080 houses more expensive than they had been, but there's less 0:15:01.120 --> 0:15:03.320 houses being built. And that's again it's it's just not 0:15:03.480 --> 0:15:05.800 due to zoning. It's the result of the home building 0:15:05.840 --> 0:15:07.800 industry tanking because a bunch of people who should be 0:15:07.840 --> 0:15:10.200 in prison sold and bundled up sub prime loans. And 0:15:10.200 --> 0:15:12.760 then those same people go to people in the New 0:15:12.840 --> 0:15:15.280 York Times pretending to be experts and say, no, we 0:15:15.320 --> 0:15:17.640 gotta change the zoning so I can develop cities more. 0:15:17.680 --> 0:15:20.680 And it's frustrating that that's the only argument you tend 0:15:20.720 --> 0:15:23.920 to fucking here now. Even then, even if you like 0:15:25.280 --> 0:15:28.320 because again the New York Times, the angle here is 0:15:28.360 --> 0:15:31.600 not entirely wrong, but it also leaves a lot out, 0:15:31.640 --> 0:15:33.640 even if you're just looking at their numbers, because the 0:15:33.680 --> 0:15:35.680 numbers we see that are like, the US is missing 0:15:35.720 --> 0:15:38.200 this many million homes, right, We're short three million homes 0:15:38.280 --> 0:15:40.920 or seven million homes are if not kind of fucky, 0:15:40.920 --> 0:15:44.040 which I would argue then at least presented in a 0:15:44.120 --> 0:15:46.560 way that does not provide people with clarity as to 0:15:46.600 --> 0:15:49.160 what the numbers actually mean. When I say the US 0:15:49.240 --> 0:15:51.200 is short three million homes, which is something you here 0:15:51.200 --> 0:15:54.080 on the New York Times a lot that suggests that, like, well, 0:15:54.080 --> 0:15:56.960 there's three million people who don't have who can't get 0:15:56.960 --> 0:15:59.560 housing because of sheer lack of availability, right or at 0:15:59.640 --> 0:16:02.360 least x number of people. However, many people fit into 0:16:02.360 --> 0:16:06.120 three million homes, and that's not really true. Uh, there's 0:16:06.120 --> 0:16:10.200 a lot of people who they started, Yeah, from where 0:16:10.240 --> 0:16:12.520 are these numbers? And who? I'm kind of confused. I'm like, 0:16:12.800 --> 0:16:16.240 who actually says, all right, I've gone and taking a 0:16:16.680 --> 0:16:19.600 statistics and we figured out that yes, this amount of 0:16:19.640 --> 0:16:22.800 people need as much many houses. But do we actually 0:16:22.840 --> 0:16:24.760 have a number on how did it come up to that? Yes, 0:16:24.800 --> 0:16:26.240 we're about to get to that. I'm going to talk 0:16:26.280 --> 0:16:28.920 to It does not work the way you would think 0:16:28.920 --> 0:16:33.320 it does based on the way it tends to get summarized. Right. Um, 0:16:33.360 --> 0:16:36.160 but yeah, there's there's folks will argue, just in general 0:16:36.200 --> 0:16:39.000 that the problem is not the way it's often presented. 0:16:39.120 --> 0:16:41.760 Kevin Drum is a writer from Mother Jones and I 0:16:41.760 --> 0:16:44.040 think kind of on the more libertarian end of things 0:16:44.080 --> 0:16:46.320 with a lefty tinge. His big claim to fame is 0:16:46.360 --> 0:16:48.560 that he helped solidify the idea that there's a connection 0:16:48.640 --> 0:16:50.800 between the drop and violent crime and the removal of 0:16:50.880 --> 0:16:53.560 environmental lead, like getting lead out of gas. He's like 0:16:54.000 --> 0:16:56.560 the journalist who is big on that, And he points 0:16:56.560 --> 0:16:59.400 out that while construction never recovered after the two thousand 0:16:59.400 --> 0:17:01.920 and eight crash, that's because the crash led to the 0:17:01.920 --> 0:17:04.879 bursting of a housing bubble. And since housing was indeed 0:17:04.880 --> 0:17:07.720 a bubble in that period, why would construction have returned 0:17:07.760 --> 0:17:09.560 to the rate that it was being added at when 0:17:09.560 --> 0:17:11.840 everyone lost their minds building trash houses as part of 0:17:11.880 --> 0:17:14.919 a shell game, right, Like, maybe it's not, it's not. 0:17:15.160 --> 0:17:18.479 The problem isn't that housing construction didn't return to previous 0:17:18.600 --> 0:17:21.600 levels because those levels were insane and fundamentally based on 0:17:21.640 --> 0:17:26.560 a rationality quote. During the early aughts, housing supply grew 0:17:26.600 --> 0:17:30.000 far faster than population. After the bust, household formation caught 0:17:30.080 --> 0:17:33.080 up by around two thousand thirteen, and since then, housing 0:17:33.080 --> 0:17:36.320 supply has matched household growth and has exceeded population growth. 0:17:36.600 --> 0:17:39.160 So do we have a housing shortage? Everyone keeps saying 0:17:39.160 --> 0:17:41.119 we do, and the housing groupies keep yelling at me 0:17:41.160 --> 0:17:43.640 that my chart is meaningless, But why, it sure looks 0:17:43.720 --> 0:17:45.680 right to me. By the way, I was browsing through 0:17:45.720 --> 0:17:47.520 some O e c D stats the other day looking 0:17:47.560 --> 0:17:49.760 for healthcare information, and I happened to run into their 0:17:49.800 --> 0:17:52.800 league rankings for housing. Guess how we compare based on 0:17:52.840 --> 0:17:56.040 indicators such as rooms per house, basic facilities, and affordability. 0:17:56.160 --> 0:17:58.159 The rankers is number one in the entire O e 0:17:58.240 --> 0:18:00.960 c D group of rich countries for the year to twenty. 0:18:01.080 --> 0:18:03.880 We must be doing something right and something wrong. According 0:18:03.880 --> 0:18:05.600 to the O e c D, we rank second from 0:18:05.680 --> 0:18:09.879 last among housing affordability for low income tenants. So what 0:18:09.960 --> 0:18:13.479 he's saying is that, like, well, the evidence that like 0:18:13.520 --> 0:18:16.600 we're short on housing is weaker than the evidence that 0:18:16.720 --> 0:18:19.640 prices and housing are being jacked up and inflated. It's 0:18:19.680 --> 0:18:22.480 like the there is inflated. It's like with the grocery store. 0:18:22.520 --> 0:18:25.000 There is inflation that's affecting the price of your groceries. 0:18:25.280 --> 0:18:28.119 Those grocery stores are also making record profits because they 0:18:28.160 --> 0:18:31.320 have jacked up prices specifically to make more money with 0:18:31.400 --> 0:18:36.320 the cover of inflation. Um yeah, drums Work is quoted 0:18:36.359 --> 0:18:39.119 favorably by Brian Potter, who works in the wonky side 0:18:39.119 --> 0:18:41.880 of the construction industry and writes a popular sub stack 0:18:41.960 --> 0:18:44.920 for weirdo construction nerds who want to know about things 0:18:44.920 --> 0:18:47.440 like why has wood gotten so expensive and why did 0:18:47.440 --> 0:18:50.280 agriculture mechanize and not construction. He those are the kind 0:18:50.280 --> 0:18:52.320 of things he writes about. He's also a member of 0:18:52.359 --> 0:18:54.919 the Institute for Progress, which is a right wing libertarian 0:18:54.960 --> 0:18:57.280 shaded think tank who pushed the idea that a lot 0:18:57.280 --> 0:19:00.119 of social and political policy should be tested by being 0:19:00.200 --> 0:19:02.879 prominent people tweet shit. What I'm trying to say is 0:19:02.920 --> 0:19:05.480 that I'm not going to totally back this guy up, 0:19:05.520 --> 0:19:07.959 but he certainly knows more about construction than me. He 0:19:08.000 --> 0:19:10.600 has an angle, which is why I laid out what 0:19:10.640 --> 0:19:13.760 he writes for. But he does. He does the best 0:19:13.800 --> 0:19:16.359 job I've seen of answering the question of like, what 0:19:16.480 --> 0:19:21.359 does a statistic like we're three million houses short really mean? Quote. 0:19:21.680 --> 0:19:23.960 We'll start with some context. The US has roughly three 0:19:24.160 --> 0:19:26.920 dred and thirty million people living in roughly onety one 0:19:26.920 --> 0:19:29.639 million homes, or about point four two homes per person. 0:19:29.880 --> 0:19:31.960 This puts the U S slightly before below the O 0:19:32.040 --> 0:19:34.520 E c D average of homes per capita. One thing 0:19:34.520 --> 0:19:37.080 worth noting about this is that previous rates of homebuilding 0:19:37.080 --> 0:19:39.280 in the U S were partly driven by falling average 0:19:39.320 --> 0:19:41.800 household size. But there's a limit to how much average 0:19:41.800 --> 0:19:44.359 household size can fall. You can only add so many 0:19:44.359 --> 0:19:47.719 new households to a given population size. At the extreme end, 0:19:47.760 --> 0:19:50.199 you can't have more households than there are people. Average 0:19:50.200 --> 0:19:52.480 household size can't be less than one. And in a 0:19:52.520 --> 0:19:54.800 world where a children live with their parents until they're 0:19:54.840 --> 0:19:57.479 eighteen and be most people live with a romantic partner, 0:19:57.520 --> 0:20:00.359 and see the population isn't declining. Is a world with 0:20:00.400 --> 0:20:03.040 a higher floor on how small the average household can get. 0:20:03.520 --> 0:20:05.439 What happens if this world changes to one where the 0:20:05.440 --> 0:20:08.639 average household sizes too. In the final condition, you'll be 0:20:08.680 --> 0:20:11.560 building twice as many houses. If you add four people 0:20:11.560 --> 0:20:14.280 to the population, you're now building two homes instead of one. 0:20:14.680 --> 0:20:16.879 But to get to that second world, you need to 0:20:16.920 --> 0:20:20.400 build one hundred additional houses. Even if this process takes 0:20:20.440 --> 0:20:22.800 fifty years, that's an extra two houses per year on 0:20:22.840 --> 0:20:25.480 top of the ones you're already building, which will temporarily 0:20:25.600 --> 0:20:28.560 juice your building rate. But once you work through that backlog, 0:20:28.640 --> 0:20:30.919