Speaker 1: Bloomberg Audio Studios, podcasts, radio news depending home sales here
Speaker 1: in the US seeing a surprise uptick in February as
Speaker 1: mortgage rates fell to their lowest since twenty twenty two.
Speaker 1: It's a good backdrop for the new HGTV show from
Speaker 1: the Property Brothers Joe and Jonathan Scott. That show is
Speaker 1: called Property Brothers Under Pressure. It just premiered on Sunday,
Speaker 1: and it's a deeper look here, not just into the homes,
Speaker 1: but really into the home buyers themselves and how they
Speaker 1: navigate a competitive market and make budget conscious decisions for
Speaker 1: their new homes. I had a chance to sit down
Speaker 1: with them exclusively earlier today and talk about the state
Speaker 1: of the housing market and their journey to HGTV stardom.
Speaker 1: Take a listen.
Speaker 2: Unlike anything we've ever done, because people always ask us, well,
Speaker 2: what happens when the cameras aren't rolling, what happens behind
Speaker 2: the scenes. We show it. We show it. You see
Speaker 2: our crew, you see us disagree, you see moments that
Speaker 2: the homeowners. You know. I think it's very relatable for
Speaker 2: everyone out there because there's so much pressure on everybody
Speaker 2: affordability crisis, like there is across the country here. The stories.
Speaker 2: We have fourteen episodes and they're all very different stories.
Speaker 2: We have families have lost their house from the fires
Speaker 2: in la We have other families that are trying to
Speaker 2: pull two families together to live in one house because
Speaker 2: that's the only way they can afford. We have so
Speaker 2: many stories that will be very relatable for Americans watching,
Speaker 2: and we're trying to solve with really tight budgets. We're
Speaker 2: trying to solve what everybody out here is trying to
Speaker 2: solve to be able to get a home that they deserve.
Speaker 1: We talk about the evolution of HGTV and just these
Speaker 1: types of programs that choose to be more about the
Speaker 1: homes themselves, and they are becoming a lot more about
Speaker 1: the people and what they're going through. And you know,
Speaker 1: here at Bloomberg, we've talked a lot about the affordability
Speaker 1: crisis in the housing market, and particularly out West, where
Speaker 1: you guys do a lot of your work. I am
Speaker 1: curious if you've seen any sort of movement and maybe
Speaker 1: a sort of a future where you have real starter homes,
Speaker 1: real affordable starter homes for people in some of these markets.
Speaker 2: There's definitely been a lot of movement unfortunate. It's in
Speaker 2: the wrong direction. We have, you know about a four
Speaker 2: million short house shortage of a healthy inventory right now
Speaker 2: and the challenges People don't seem to understand that we
Speaker 2: need affordable housing. Any successful city in the world that
Speaker 2: has embraced affordable housing, the cities have flourished and the
Speaker 2: costs have come down. But I love the idea that
Speaker 2: people can live where they work. And I think some
Speaker 2: people here affordable housing, they think, well, that's going to
Speaker 2: be you know, drugs and crime and everything. Absolutely not.
Speaker 2: These are teachers and you know, nurses and police, you know,
Speaker 2: household workers, people who want to live in the same
Speaker 2: community that they work. And so that's our goals from
Speaker 2: a messaging standpoint, show people that it's okay, you don't
Speaker 2: have to be a nimby. You don't have to stop
Speaker 2: projects that are being built, you know, in your neighborhood.
Speaker 2: On the flip side, we've invested in companies like modular Builders,
Speaker 2: So we're trying to find new technologies that will physically
Speaker 2: bring down the cost of construction and at the same
Speaker 2: time a hard time though, because there's a lot of
Speaker 2: time about rate cuts to help the you know, government
Speaker 2: trying to stimulate. What the problem is, you have no inventory.
Speaker 2: Cut rates if you want, that gets people excited to buy,
Speaker 2: but there's nothing to buy, you're not really solving the problem.
Speaker 2: We need to find ways to incentivize make it possible
Speaker 2: for developers to really focus in. For example, I have
Speaker 2: a real estate portfolio in Calgary in Canada. The government
Speaker 2: in Canada really incentivizes builders to do affordable housing, so
Speaker 2: it makes it worthwhile and I can keep rolling money
Speaker 2: from one project to the next to the next to
Speaker 2: actually make a difference down here, I don't have that
Speaker 2: same opportunity.
Speaker 1: Where do you see potentially where those incentives come from. Obviously,
Speaker 1: in a city like New York, affordable housing has been
Speaker 1: a huge topic of conversation. It pretty much swayed our
Speaker 1: most recent mayoral election. I'm sure out west where you
Speaker 1: guys in oh guys are, whether it's California, Vegas, Vancouver,
Speaker 1: they're also seeing similar issues there. Are you seeing things
Speaker 1: at the state level or the local level that could
Speaker 1: potentially leave well.
Speaker 2: One of the biggest things is I think federally there
Speaker 2: needs to be better policy that allow and incentivize builders
Speaker 2: and developers to pull out more cash. So for example,
Speaker 2: in Canada, if you create a certain amount of affordable
Speaker 2: housing units within your building that you can finance up
Speaker 2: to ninety five percent, whereas here not even close. And
Speaker 2: so a lot of builders are leaving forty percent of
Speaker 2: their cash in a building and that prevents them from
Speaker 2: building forward. Also on the building side, if we're if
Speaker 2: you're using you know, say you're building a building for
Speaker 2: easy figures twenty million dollar building, if you do that
Speaker 2: as an affordable building using public funds for some of
Speaker 2: that construction, there's all this regulation that all of a sudden,
Speaker 2: the costs it's about forty percent more just to do
Speaker 2: the exact same building. So I think we're getting tied
Speaker 2: up in you know, the manula, and we're not stepping
Speaker 2: back and looking at the fact that we haven't seen
Speaker 2: rapid enough growth to solve the problem when it comes
Speaker 2: to actually supplying inventory. And it's also adding density. There
Speaker 2: are different areas that are doing great things, but when
Speaker 2: you can add some more density, even in California, so
Speaker 2: for example, my house, I'm allowed to have two suites,
Speaker 2: I can have two ADUs, which is great because I
Speaker 2: could read both those out and it's helping with the crisis. However,
Speaker 2: the backlog to get to that point one of my ADUs.
Speaker 2: It should have been approved in a week. I waited
Speaker 2: five months and there's such a backlog and the process
Speaker 2: is so archaic. We need to revitalize the process to
Speaker 2: get people moving to add density. This is one of
Speaker 2: the things where I'm hoping that AI is actually helpful
Speaker 2: because the bureaucracy behind trying to win through the planning process.
Speaker 2: Anyone who's taken on a renovation knows how annoying it
Speaker 2: is to wait on your permits, wait for the city,
Speaker 2: also wait for the utilities to go through and process everything.
Speaker 2: I would love to see something that automates a lot
Speaker 2: of that, to make sure that the eyes are getting
Speaker 2: dotted and the teaser getting crossed. But you can actually
Speaker 2: get in and do the work. And as I say,
Speaker 2: this literally is right now in modern history, this is
Speaker 2: the absolute worst affordable housing market in history for first
Speaker 2: time home buyers. First time home buyers are less than
Speaker 2: twenty five percent of the market right now, and that
Speaker 2: should be a lot higher. It's just not feasible for
Speaker 2: people to get into real estate like it used to be.
Speaker 1: Obviously, you've had a presence, specifically on HGTV. Now for
Speaker 1: more than a decade, you've had a lot of iterations
Speaker 1: of your show and obviously shows that don't actually feature
Speaker 1: you two. How much does that change in terms of
Speaker 1: being able to produce a show like that at a
Speaker 1: reasonable cost, have whatever relationship you have with HGTV, and
Speaker 1: actually make it profitable.
Speaker 2: Yeah, everyone, I mean so, we are one of the
Speaker 2: largest unscripted producers in North America. We have fifteen series
Speaker 2: that we produce, we host two of them. But we
Speaker 2: we have found a huge shift because what we used
Speaker 2: to have for budgets for our shows down here on
Speaker 2: AGTV or with other partners, we don't have that anymore.
Speaker 2: So we as producers have to get more creative, and
Speaker 2: sometimes that means going to Canada, green lighting with a
Speaker 2: copro out of Canada and then coming down with a
Speaker 2: license or coprowing with the US down here. So we
Speaker 2: were really good at getting creative. But plus, our company
Speaker 2: stands out from other production companies because we are up
Speaker 2: in Toronto for our production base, so we can actually
Speaker 2: take advantage of a lot of tax incentives up in
Speaker 2: Canada that are great that a lot of US producers
Speaker 2: can't well. And we're also seeing explosive growth in digital
Speaker 2: and other forms of media, you know, YouTube, everything else,
Speaker 2: So you know, trying this, We've always stayed a step ahead.
Speaker 2: We're always looking at where the industry is going right now, television,
Speaker 2: traditional television. I mean, what's the word imploding? Everything is
Speaker 2: everyone's uncertain. There's a lot of mergers happening, and so
Speaker 2: things around are paused. But that's what I like is
Speaker 2: the fact that we're constantly looking at so there's enough
Speaker 2: opera tunity that we can still find placement.
Speaker 1: As as some of the mergers, particularly a Warner Brothers
Speaker 1: being absorbed into Paramount, has that affected at all, maybe
Speaker 1: your outlook for what HUTV and Discovery ends up being.
Speaker 2: Yeah, ammolutely, it's more of a pause. That's what is
Speaker 2: right now, because nobody wants to jump in a direction
Speaker 2: if they don't know who's going to own the company
Speaker 2: or what the focus is going to be. If you
Speaker 2: look at Netflix, they were only interested in studio science streaming.
Speaker 2: They weren't interested in linear cable. So Paramount's taking everything.
Speaker 2: So that does mean that we as were the largest
Speaker 2: producer for HTTV for Warner Brothers on the unscripted. Now
Speaker 2: we'll have that opportunity to do the same with Paramount
Speaker 1: Jonathan and Drew Scott there at the property of Brothers
Speaker 1: on the launch of their new program, but more importantly,
Speaker 1: an interesting conversation there about housing affordability, particularly in the
Speaker 1: markets that they're focused on, primarily out West and in Canada.