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Study Hall: Why America Has A Housing Crisis · Earn Your Leisure

• 0:00
  Speaker 1: An illegal alien from Guatemala charged with raping a child
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  Speaker 1: in Massachusetts. An MS thirteen gang member from Al Salvador
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  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
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  Speaker 1: filming and selling child pornography in Michigan. These are just
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  Speaker 1: some of the heinous migrant criminals caught because of President
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  Speaker 1: Donald J. Trump's leadership. I'm Christy nom the United States
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  Speaker 1: Secretary of Homeland Security. Under President Trump, attempted illegal border
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  Speaker 1: crossings are at the lowest levels ever recorded, and over
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  Speaker 1: one hundred thousand illegal aliens have been arrested. If you
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  Speaker 1: are here illegally, your next you will be fined nearly
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  Speaker 1: one thousand dollars a day, imprisoned, and deported. You will
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  Speaker 1: never return. But if you register using our CBP home
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  Speaker 1: app and leave now, you could be allowed to return legally.
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  Speaker 1: Do what's right, leave now. Under President Trump, America's laws,
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  Speaker 1: border and families will be protected.
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  Speaker 2: Sponsored by the United States Department of Homeland Security. So
• 1:01
  Speaker 2: all right, let's talk about this.
• 1:04
  Speaker 3: There is a housing shortage in America, right, So what
• 1:10
  Speaker 3: does that mean for the average person and how does
• 1:14
  Speaker 3: that affect the real estate market over the next five years?
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  Speaker 4: Well, that means that, you know, it's like anything else
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  Speaker 4: supplying demand. The supply is low, the demand is high,
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  Speaker 4: So that's why rents go up.
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  Speaker 2: So so why is there a housing shortage? Though?
• 1:28
  Speaker 4: Man, there's been so much politicization of housing in real estate,
• 1:33
  Speaker 4: and it's difficult to build. Like you look at some
• 1:36
  Speaker 4: of the markets where's most pronounced New York, California. There's
• 1:40
  Speaker 4: this thing called Nimby. You have heard of Nimby. Not
• 1:43
  Speaker 4: in my backyard. People say, yeah, we need affordable housma,
• 1:46
  Speaker 4: don't build them, don't build them on my street, right,
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  Speaker 4: And so what that does is it disturbs the real
• 1:54
  Speaker 4: estate market for that particular city and we just buy
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  Speaker 4: and large have not built enough moderate and middle income
• 2:02
  Speaker 4: or affordable housing. So you know, millionaires don't have any problem.
• 2:06
  Speaker 4: They could buy whatever they want to buy right or
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  Speaker 4: live wherever they want to live. We're talking about the
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  Speaker 4: rank and file public workers, you know, teachers, ambulance drivers,
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  Speaker 4: sanitation sanitation workers, the rank and file public who have
• 2:20
  Speaker 4: good jobs, they work hard. But there's been such an
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  Speaker 4: escalation in the cost of rents because of the supply
• 2:27
  Speaker 4: and demand disruption that these rents are off the table.
• 2:31
  Speaker 4: I mean, if four million units of housing hit the
• 2:35
  Speaker 4: market tomorrow, all rents would drop, but it takes years
• 2:38
  Speaker 4: and years to build it. That's why you know, we
• 2:42
  Speaker 4: have this condition because it's hard to just increase the
• 2:45
  Speaker 4: supply quickly. You have to have an alignment of politics
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  Speaker 4: of market forces like real estate excuse mean, like interest rates.
• 2:55
  Speaker 4: You know, interest rates are out of control right now,
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  Speaker 4: so it makes it very hard to build. Sometimes you
• 3:00
  Speaker 4: have construction costs going off the rails, like everyone heard
• 3:03
  Speaker 4: about you know, what was going on with supply chain disruptions.
• 3:08
  Speaker 2: You know last year.
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  Speaker 4: So you have all these things that can throw that
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  Speaker 4: equation off and make it hard to produce housing. So
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  Speaker 4: you know, right now it's come to a critical point,
• 3:17
  Speaker 4: and you know, particularly elected officials have to get off
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  Speaker 4: of the rubric where they want to you know, almost
• 3:25
  Speaker 4: politicize housing, make all real estate developers evil, all real
• 3:29
  Speaker 4: estate is bad.
• 3:30
  Speaker 2: We have a lot of that narrative coming out.
• 3:32
  Speaker 4: Of certain communities in certain cities, but it doesn't help
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  Speaker 4: to do anything because people still cannot find good housing
• 3:40
  Speaker 4: and the only way to get it is to build it. Right,
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  Speaker 4: we have to ubzone. A lot of communities don't want
• 3:45
  Speaker 4: to go through rezonings and up zone, they say all that,
• 3:48
  Speaker 4: we don't want that high building here. Well, okay, that's
• 3:52
  Speaker 4: your opinion, but we have people sleeping in shelters, right,
• 3:54
  Speaker 4: we have people who really need housing. And I firmly
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  Speaker 4: believe that housing security from most families is financial security,
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  Speaker 4: because if people have a roof over the head, there's
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  Speaker 4: more money they have to dedicate to healthcare, the education,
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  Speaker 4: the other well being of the family, taking care of
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  Speaker 4: the elderly, everything else the families have to deal with.
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  Speaker 4: But if sixty seventy percent of your income is used
• 4:17
  Speaker 4: to pay rent, cuts out a lot of options what
• 4:19
  Speaker 4: you could do otherwise.
• 4:21
  Speaker 5: When you talk about up zone, and I was immediately
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  Speaker 5: thinking a city I used to work in the newer show.
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  Speaker 5: We're seeing a lot of towers go up there, and
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  Speaker 5: I'm wondering, when when you're building units and you're adding
• 4:31
  Speaker 5: that to the portfolio, what's the allocation that has to
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  Speaker 5: be affordable housing? And obviously your expertise in the field,
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  Speaker 5: are you seeing people just meaning the minimum or people
• 4:41
  Speaker 5: exceeding the amount? If there is a certain allocation you
• 4:43
  Speaker 5: have to have.
• 4:43
  Speaker 4: Well, first of all, let me say this the.
• 4:46
  Speaker 2: Earners, what's up.
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• 6:37
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 6:40
  Speaker 1: in Massachusetts. An MS thirteen gang member from El Salvador
• 6:45
  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
• 6:49
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 6:53
  Speaker 1: some of the heinous migrant criminals caught because of President
• 6:57
  Speaker 1: Donald J. Trump's leadership. I'm Christine nom United States Secretary
• 7:01
  Speaker 1: of Homeland Security. Under President Trump, attempted illegal border crossings
• 7:06
  Speaker 1: are at the lowest levels ever recorded, and over one
• 7:09
  Speaker 1: hundred thousand illegal aliens have been arrested. If you are
• 7:12
  Speaker 1: here illegally, your next you will be fine nearly one
• 7:16
  Speaker 1: thousand dollars a day. Imprisoned and deported, you will never return.
• 7:21
  Speaker 1: But if you register using our CBP home app and
• 7:24
  Speaker 1: leave now, you could be allowed to return legally. Do
• 7:27
  Speaker 1: what's right, leave now. Under President Trump, America's laws, border
• 7:33
  Speaker 1: and families will be protected.
• 7:35
  Speaker 4: Sponsored by the United States Department of Homeland Security, Eric
• 7:37
  Speaker 4: new Roshell in that administration has done it absolutely correctly.
• 7:41
  Speaker 4: They have embraced real estate development, and they've used market
• 7:46
  Speaker 4: forces and capitalist forces and real estate developers to help
• 7:50
  Speaker 4: bring that city into the modern era and the wave
• 7:52
  Speaker 4: of development that there is impressive, right. But in other
• 7:59
  Speaker 4: areas it's not so easy because you have a lot
• 8:01
  Speaker 4: of different opinions, a lot of you know, just fights
• 8:03
  Speaker 4: over what should be built, could be built. We don't
• 8:06
  Speaker 4: want that tower here, I think. To answer your second question, generally,
• 8:13
  Speaker 4: depending different municipalities had different requirements about how much affordable
• 8:16
  Speaker 4: housing should be built, and usually what happens is it's
• 8:20
  Speaker 4: tied to some type of tax abatement or some type
• 8:22
  Speaker 4: of government funding that will be provided to the project
• 8:25
  Speaker 4: to build it. We had a scenario recently in Harlem.
• 8:28
  Speaker 2: Right, we're very active. We do a lot. And a city.
• 8:32
  Speaker 4: Council person turned down a developer on one hundred and
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  Speaker 4: forty fifth Street who bought land and only was required
• 8:40
  Speaker 4: to do twenty percent affordable housing, but he wanted to
• 8:42
  Speaker 4: ubzone the project and do nine hundred units. He went
• 8:48
  Speaker 4: as far as fifty percent affordable housing. She still voted
• 8:52
  Speaker 4: it down. Well, wow, politics, So you think about that's
• 8:57
  Speaker 4: the wrong move, right, I mean, that's four hundred and
• 8:59
  Speaker 4: fifth the families who are not going to have clean, decent,
• 9:04
  Speaker 4: energy efficient affordable housing for themselves. Right, it's a it's
• 9:07
  Speaker 4: an absolute loss. But we see too much of that
• 9:10
  Speaker 4: these days. So let me ask you this, well, two questions.
• 9:13
  Speaker 4: How do real estate developers get paid?
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  Speaker 2: Last answer, well, so what I mean by that? You get
• 9:20
  Speaker 2: paid like twice? Though?
• 9:21
  Speaker 4: Right, Well, no real estate developers take all the risks,
• 9:24
  Speaker 4: So what we do? What do you mean twice?
• 9:25
  Speaker 2: So you get all?
• 9:26
  Speaker 3: Right, Well you can explain it better than me, obviously,
• 9:27
  Speaker 3: but from my understanding, you you get a part of
• 9:33
  Speaker 3: the development fee, yes, right, and then you have if
• 9:37
  Speaker 3: you have equity in it, then you can get that
• 9:40
  Speaker 3: as some level of conversation as well.
• 9:43
  Speaker 4: Right, So the equity, the equity that you would invest
• 9:45
  Speaker 4: would just be returned to you.
• 9:46
  Speaker 2: Right.
• 9:46
  Speaker 4: The equity is so when you do a project. Let's say,
• 9:49
  Speaker 4: you know, when you buy a house, right, you know,
• 9:51
  Speaker 4: you go to the bank and the bank says, okay, uh,
• 9:55
  Speaker 4: you know I want to buy this house. I'll say okay,
• 9:57
  Speaker 4: mister Livingston. You know you have to put down twenty percent.
• 10:00
  Speaker 4: That's your equity. Same thing when you do a development deal.
• 10:03
  Speaker 4: The bank is going to give you one hundred percent
• 10:05
  Speaker 4: of the deal. You have to bring some equity. Usually,
• 10:08
  Speaker 4: depending on how large the project is, you get into
• 10:11
  Speaker 4: a scenario where the equity is coming from a third
• 10:15
  Speaker 4: party investor, a limited partner, which is usually a real
• 10:20
  Speaker 4: estate private equity fund. It could be an insurance company
• 10:24
  Speaker 4: or some just an investor that has a lot of
• 10:26
  Speaker 4: capital and they have to invest it because they need
• 10:28
  Speaker 4: to generate returns on their capital to pay pensioneers or
• 10:33
  Speaker 4: to pay out insurance claims. Whatever it is. So the
• 10:37
  Speaker 4: equity gets returned. But to answer your question specifically, a
• 10:40
  Speaker 4: real estate developer will get fees, right, So you get
• 10:43
  Speaker 4: a developer fee. You could get distributions based off of
• 10:48
  Speaker 4: refinancing the project because let's say you know, like.
• 10:52
  Speaker 2: You have a project, you do it.
• 10:54
  Speaker 4: After ten years or whatever, rents go up, you have
• 10:58
  Speaker 4: one level of debt you've been paying down that you
• 11:00
  Speaker 4: could refinance, put a new mortgage on, take some capital out.
• 11:04
  Speaker 4: But more regularly, what happens is once you put the
• 11:07
  Speaker 4: building into service, every month is cash flow. Remember NI,
• 11:11
  Speaker 4: you have your NI, you pay your debt. What remains
• 11:14
  Speaker 4: is cash flow that can be distributed to partners.
• 11:22
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 11:26
  Speaker 1: in Massachusetts. An MS thirteen gang member from Al Salvador
• 11:30
  Speaker 1: accused of murdering a Texas. Man of Venezuelan charged with
• 11:34
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 11:38
  Speaker 1: some of the heinous migrant criminals caught because of President
• 11:42
  Speaker 1: Donald J. Trump's leadership. I'm Christy nom the United States
• 11:46
  Speaker 1: Secretary of Homeland Security. Under President Trump, attempted illegal border
• 11:50
  Speaker 1: crossings are at the lowest levels ever recorded, and over
• 11:54
  Speaker 1: one hundred thousand illegal aliens have been arrested. If you
• 11:57
  Speaker 1: were here illegally, your net next you will be fine
• 12:01
  Speaker 1: nearly one thousand dollars a day, imprisoned and deported you
• 12:05
  Speaker 1: will never return. But if you register using our CBP
• 12:09
  Speaker 1: home app and leave now, you could be allowed to
• 12:12
  Speaker 1: return legally. Do what's right. Leave now. Under President Trump
• 12:17
  Speaker 1: America's laws, border and families will be protected.
• 12:20
  Speaker 2: Sponsored by the United States Department of Homeland Security,