Latest / The Land Development Podcast with Ryan Glick / Industry News: Fed Raises Rates, States Bet on Factory-Built Housing, and Florida Speeds Up Permits - TLP190

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Industry News: Fed Raises Rates, States Bet on Factory-Built Housing, and Florida Speeds Up Permits - TLP190 · The Land Development Podcast with Ryan Glick

• 0:00
  SPEAKER_01: This is something that has fascinated me for a long time because it seems like it should work, right?
• 0:05
  SPEAKER_01: The premise seems like, okay, we need housing, let's build them in factories, let's make it more efficient, let's get them out to the job site, sit it in place, done.
• 0:12
  SPEAKER_01: Should work great.
• 0:14
  SPEAKER_01: But yet so many of these have failed.
• 0:17
  SPEAKER_01: And there's been billions of dollars invested.
• 0:20
  SPEAKER_01: Lots of people took a big swing at this and missed.
• 0:40
  SPEAKER_00: I am your host, Ryan Glick.
• 0:42
  SPEAKER_00: We have an industry news episode for you today, and joining me as always is Charles Covey.
• 0:47
  SPEAKER_00: How's it going, Charles?
• 0:48
  SPEAKER_01: Hey, Ryan.
• 0:48
  SPEAKER_00: Well, we've got, as always, three articles to get into here today, three different topics.
• 0:54
  SPEAKER_00: So we're going to start out with taking a look at the market after the Fed raised rates last week.
• 1:01
  SPEAKER_00: So it's something that uh wasn't necessarily unexpected with how things have turned, but definitely not something we were predicting a year ago.
• 1:09
  SPEAKER_00: Secondly, we're going to dig into some states who are betting on factory-built housing.
• 1:14
  SPEAKER_00: And then we're going to close out with a look at Florida's shot clock on permits as well as some other states who have implemented a similar shot clock style approach to help speed up their permitting.
• 1:25
  SPEAKER_00: So with that said, let's go ahead and get into our first article, which comes to us from the Federal Reserve.
• 1:31
  SPEAKER_00: The Fed raised rates and builders were already feeling it.
• 1:35
  SPEAKER_00: The Fed raised rates 25 basis points to a target range of 3.75% to 4%, first increase since July 2023, and the vote was unanimous at 12 to 0.
• 1:46
  SPEAKER_00: 16 of 18 Fed officials expect at least one more increase this year.
• 1:51
  SPEAKER_00: No rate cuts are penciled in until 2028.
• 1:54
  SPEAKER_00: Builder confidence fell three points to 32, the lowest since September 2025.
• 2:00
  SPEAKER_00: 38% of builders cut prices in September, up from 35% in August.
• 2:06
  SPEAKER_00: Existing home sales have now fallen three months in a row.
• 2:09
  SPEAKER_00: So I kind of overlapped the Fed news with a National Association of Home Builders uh article where it talks about the updated builder confidence and everything.
• 2:18
  SPEAKER_00: And so it feels like a, you know, a very negative thing that has happened here.
• 2:22
  SPEAKER_00: But what do you think, Charles?
• 2:24
  SPEAKER_00: How do you see this?
• 2:25
  SPEAKER_01: So fascinating to me that the episodes we recorded a year ago, very positive that, hey, you know, before midterms, they're gonna have to reduce the rates.
• 2:35
  SPEAKER_01: We're gonna get the new Fed chairman in, we're gonna get everything's gonna shift around, and you know, rates are gonna go down.
• 2:41
  SPEAKER_01: And we did not know that there was gonna be an Iran conflict and a significant global energy crisis as a result.
• 2:49
  SPEAKER_01: So that was not on the bingo card, and we completely would have said very different things had we known that to be coming true.
• 2:58
  SPEAKER_01: So a little frustrating for those of us in real estate that do things that require a lot of capital because that interest rate massively affects how much it costs to do what we do when we have to borrow big chunks of money to make projects move forward.
• 3:12
  SPEAKER_01: So I'm always wanting interest rates to go down.
• 3:15
  SPEAKER_01: Right now, energy is driving this more than anything else.
• 3:18
  SPEAKER_01: It would seem that the current administration would want this to go down because it doesn't look very good.
• 3:25
  SPEAKER_01: And it's certainly it's certainly made a lot of people upset.
• 3:30
  SPEAKER_01: I don't like paying high prices for diesel.
• 3:33
  SPEAKER_01: I don't like the higher interest rates.
• 3:35
  SPEAKER_01: I'm not a big fan of this whole situation, and I think that's probably a sentiment of a lot of people at the moment.
• 3:41
  SPEAKER_01: Unless something gives, though, unless we get a very significant shift in the global energy situation driven by the Iran conflict, then nothing's gonna move.
• 3:53
  SPEAKER_01: So I think at this point we'd have to say we're locked in at this rate or higher for 18 months at least.
• 4:01
  SPEAKER_01: Does that seem what does that look like what we're seeing, Ryan?
• 4:04
  SPEAKER_00: Seems like it.
• 4:05
  SPEAKER_00: I mean, you make a good point, too, is that we are we're a month and a half away from the midterms.
• 4:10
  SPEAKER_00: So what we see right now is what we're gonna get most likely when it comes to the midterms.
• 4:16
  SPEAKER_01: Right.
• 4:16
  SPEAKER_01: That's all all that has already been there's nothing could happen today that would affect rates before then.
• 4:23
  unknown: Right?
• 4:23
  SPEAKER_01: December is gonna be their next meeting.
• 4:25
  SPEAKER_01: Wait, no, they've got one in October.
• 4:27
  SPEAKER_01: I'm sorry.
• 4:28
  SPEAKER_01: So one in October, and I doesn't look like there's any information that would drive any change there, other than maybe a slight increase, and then we'll see what happens in December.
• 4:39
  SPEAKER_00: Exactly.
• 4:39
  SPEAKER_00: Well, that and that's kind of where I was going with it was I I wasn't sure if we should expect another rate increase in October.
• 4:46
  SPEAKER_00: I feel like there, if there's any pressure that this administration can put on the Fed ahead of midterms, they would be putting it in October to try to say, hey, you just raised rates in September.
• 4:55
  SPEAKER_00: Let's like, let's keep it steady.
• 4:57
  SPEAKER_00: You can raise them in December once we get past the midterms.
• 4:59
  SPEAKER_00: But I guess that'll be also very telling to see who's actually in control when it comes time for that decision.
• 5:05
  SPEAKER_00: And if the decision is made to raise rates again in October, maybe there's not as much pressure coming in from the Trump administration to tell them to keep them steady.
• 5:14
  SPEAKER_00: But yeah, I I think, I mean, I feel like, you know, we're talking about builder confidence here.
• 5:19
  SPEAKER_00: I think even the consumer sentiment, this is something that we always talk about, or you've always talked about, how the you know, interest rates for you know 30-year fixed interest rates, they're always predictive based on where they think rates are gonna go.
• 5:34
  SPEAKER_00: So generally when there's a change in the Fed rate, it doesn't necessarily immediately change the interest rates on mortgages because they usually have already adjusted ahead of that time with the expectation.
• 5:45
  SPEAKER_00: I don't know if the expectation was that they were gonna raise rates this past week, but I have seen, you know, basically articles talking about get used to the 7 plus percent mortgage, and now we're kind of going back that other direction when we're hoping we're gonna start getting down into the fives and maybe level off somewhere in fives where that becomes the new normal of what rates consumers should expect.
• 6:08
  SPEAKER_00: But yeah, I think we're in for a little bit of a bumpy ride here over the next uh, like you said, 12 to 18 months.
• 6:13
  SPEAKER_01: Yeah, something that we're gonna have to explore a little bit and track is we talked about pent-up demand.
• 6:19
  SPEAKER_01: And we've talked about this over the last 18 months, 12 months for sure.
• 6:24
  SPEAKER_01: That people were waiting, okay, we'll just I'll wait.
• 6:26
  SPEAKER_01: I'm gonna sit tight, wait till rates go down.
• 6:28
  SPEAKER_01: Maybe I'm in a lower rate now, no reason to move.
• 6:31
  SPEAKER_01: Well, so now that pent-up demand's not coming.
• 6:34
  SPEAKER_01: It's gonna stay pent up because the reason it was pent up is only intensifying not getting better.
• 6:39
  SPEAKER_01: That would be my assumption.
• 6:41
  SPEAKER_01: Maybe at some point people are like, eh, whatever, I guess it just is what it is.
• 6:45
  SPEAKER_01: If I want to move, I just have to pay the higher rate.
• 6:47
  SPEAKER_01: Maybe that's the case.
• 6:48
  SPEAKER_01: But I think you couple the rate situation with the fact that a lot of people are feeling pressure in a lot of places and expenses are higher than they were, and it doesn't feel like there's a lot of extra money going around, maybe that causes that pent-up demand to stay that way.
• 7:04
  SPEAKER_00: Don't you think that this is just going to lead to rents increasing now?
• 7:08
  SPEAKER_01: Well, certainly.
• 7:09
  SPEAKER_01: Yeah, certainly.
• 7:10
  SPEAKER_01: Because you in in some cases, not in every case, but in in a lot of cases, rents compete against the option to buy.
• 7:17
  SPEAKER_01: And as the option to buy keeps going up, there's no reason for rents to stay the same to a certain point, right?
• 7:22
  SPEAKER_01: So they will chase that up.
• 7:24
  SPEAKER_00: Yeah, so we'll we'll keep an eye on this.
• 7:25
  SPEAKER_00: And of course, as we get to toward the October meeting, we'll we'll see what the Fed decides to do there.
• 7:31
  SPEAKER_00: And then, of course, we're going to be talking about the midterms heading into that here at the beginning of November.
• 7:35
  SPEAKER_00: So with that said, let's go ahead and shift into the next segment, which is from the comments.
• 7:40
  SPEAKER_00: So I have a couple of them here today.
• 7:41
  SPEAKER_00: First one comes from David Hughes on LinkedIn.
• 7:44
  SPEAKER_00: This is in response to a short on there a clip that was from Niv Davidovich's episode where he talked about the challenges of doing projects out in Los Angeles.
• 7:56
  SPEAKER_00: Uh, David's comment reads That's been my experience working in LA with all the ongoing infrastructure projects required to move people around the metro area.
• 8:05
  SPEAKER_00: I don't see how all these fiefdoms will successfully host the 2028 Summer Olympics.
• 8:10
  SPEAKER_00: The right hand doesn't even acknowledge the left hand, and vice versa.
• 8:14
  SPEAKER_00: So obviously a lot of challenges out there based on, and I've heard from other people too, talking about trying to do projects out there in LA and just the challenges they face with all the different departments that don't talk to each other.
• 8:25
  SPEAKER_00: Next one comes to us from Instagram.
• 8:29
  SPEAKER_00: This is a comment from Martin E.
• 8:32
  SPEAKER_00: Tessier93, and this is on one of the clips from Jay Knight's episode a few weeks back.
• 8:39
  SPEAKER_00: Insane prices need to fall.
• 8:41
  SPEAKER_00: Where I live in California, houses in 2019 was worth around$500,000 to$600,000.
• 8:48
  SPEAKER_00: Now it's$900,000 to a million or even more.
• 8:50
  SPEAKER_00: It's insane because nothing about the houses have changed, just Airbnb and corporations buying.
• 8:56
  SPEAKER_00: I thought this was interesting because it's uh also another comment about California and just some of the increases in prices that have happened out there.
• 9:03
  SPEAKER_00: I don't know if what he's saying here is a fact that everything's an Airbnb or corporation, but that's maybe his perception.
• 9:12
  SPEAKER_00: All right.
• 9:12
  SPEAKER_00: Well, let's go ahead and move on to our second article.
• 9:15
  SPEAKER_00: Uh, we have several sources for this one that we used.
• 9:17
  SPEAKER_00: Uh the first one is going to be related to the California state legislature.
• 9:22
  SPEAKER_00: Headline reads California bets big on factory built housing months after its flagship factory died.
• 9:29
  SPEAKER_00: So from this, we're going to take a look at a few different bills that are in flight in the state of California.
• 9:34
  SPEAKER_00: We're also going to look at the rest of the country and what's going on there related to factory built housing.
• 9:40
  SPEAKER_00: So, first with California, uh, five factory-built housing bills are sitting on the California governor's desk right now.
• 9:45
  SPEAKER_00: He has until September 30th to sign or veto all of them.
• 9:49
  SPEAKER_00: One bill stops cities demanding building standards above the state code.
• 9:53
  SPEAKER_00: One lets developers use state inspectors instead of waiting on local ones.
• 9:57
  SPEAKER_00: One creates a state backstop to make a project whole if the factory fails.
• 10:02
  SPEAKER_00: Meanwhile, the best known modular factory in the country just sold itself off to creditors.
• 10:07
  SPEAKER_00: Harbinger, formerly factory OS, cut about 280 jobs and closed in June.
• 10:12
  SPEAKER_00: And then looking around the rest of the country, Colorado took the opposite approach here.
• 10:17
  SPEAKER_00: Over$70 million of state money has gone into off-site construction.
• 10:21
  SPEAKER_00: 17 housing factories have been set up through those programs.
• 10:25
  SPEAKER_00: One more was scheduled to open in the spring of 2026.
• 10:28
  SPEAKER_00: At full output, the state projects 7,300 homes per year.
• 10:33
  SPEAKER_00: Fading West in Buena Vista has built about 500 homes since 2021.
• 10:38
  SPEAKER_00: That plant can frame a house in seven working days.
• 10:42
  SPEAKER_00: So I thought this was an interesting topic for a couple different reasons.
• 10:45
  SPEAKER_00: We've had a few people on the show recently, more specifically talking about mobile home parks.
• 10:52
  SPEAKER_00: So I know there's a couple different types of these uh manufactured homes that we're talking about here.
• 10:59
  SPEAKER_00: But because that seems to be kind of a a trend that's getting more attention, I wanted to at least bring this up and see what some states are doing and if this is something that is going to help with our housing shortage or the cost of housing and everything.
• 11:14
  SPEAKER_00: So uh what are your thoughts on this, Charles?
• 11:16
  SPEAKER_00: Do you think, you know, I know we've talked about this before, but do you think this is something that's going to pick up steam, or is it just something that's gonna continue to be kind of a small percentage of what we see in the housing market?
• 11:25
  SPEAKER_01: This is something that has fascinated me for a long time because it seems like it should work, right?
• 11:30
  SPEAKER_01: The premise seems like, okay, we need housing, let's build them in factories, let's make it more efficient, let's get them out to the job site, sit it in place, done.
• 11:38
  SPEAKER_01: Should work great.
• 11:40
  SPEAKER_01: But yet so many of these have failed.
• 11:42
  SPEAKER_01: And there's been billions of dollars invested.
• 11:46
  SPEAKER_01: Lots of people took a big swing at this and missed.
• 11:49
  SPEAKER_01: And so it it's it seems frustrating, right?
• 11:51
  SPEAKER_01: How could this be that this just continues to not work?
• 11:54
  SPEAKER_01: And a big element, a big element was it's hard to finance them because they don't fit in the typical box of site built, stick home or mobile home, which is a specific category.
• 12:06
  SPEAKER_01: And it was kind of in the middle, and it was some needed to be some more definition in order for lenders to be able to play in that space.
• 12:13
  SPEAKER_01: Now that's been fixed recently with the uh the Road to Housing Act, and they passed the the rules that now it doesn't have to have a chassis in order to qualify under that manufactured housing financing ability.
• 12:25
  SPEAKER_01: That could be major, right?
• 12:26
  SPEAKER_01: It could be major.
• 12:28
  SPEAKER_01: I think that the the mobile home manufacturers obviously have figured this out.
• 12:31
  SPEAKER_01: They're building a hundred thousand plus, maybe a hundred and ten thousand plus units a year and making a pl plenty of money doing it and building a house for 50% of what it costs to do a site-built stick-built home.
• 12:44
  SPEAKER_01: So something must be working.
• 12:46
  SPEAKER_01: They're selling them, it's working.
• 12:48
  SPEAKER_01: Not the same product, right?
• 12:49
  SPEAKER_01: It's not supposed to be the same product.
• 12:51
  SPEAKER_01: Of course, for half the price, you don't get the exact same thing.
• 12:53
  SPEAKER_01: It feels a little bit different, it lives a little bit different, it lasts a little bit different.
• 12:58
  SPEAKER_01: So a lot of the modular stuff that we're thinking about in this conversation is trying to be in the middle.
• 13:04
  SPEAKER_01: So not the mobile home scenario that maybe isn't the quality level, but certainly not that high-priced uh site-built home, something in the middle.
• 13:13
  SPEAKER_01: So if one is you know if the if the mobile home is 50% less, maybe this other one is 25 or 30% less.
• 13:20
  SPEAKER_01: Still could be value.
• 13:21
  SPEAKER_01: And you could create a lot of speed and efficiency on top of that value, which it is a big deal.
• 13:26
  SPEAKER_01: So it seems like it should work.
• 13:28
  SPEAKER_01: It's not working.
• 13:30
  SPEAKER_01: The financing may be a big element.
• 13:31
  SPEAKER_01: So let's see how that plays out.
• 13:33
  SPEAKER_01: I think that it's not quite done yet because they passed the they passed the law in July.
• 13:38
  SPEAKER_01: Uh Fannie Mae doesn't have their guidelines yet.
• 13:41
  SPEAKER_01: So they're still waiting on rewriting the guidelines to know what all is gonna fit inside this box and what all are their qualifications.
• 13:49
  SPEAKER_01: So it is sorting itself out, and I think the financing could, in theory, be a big part of it.
• 13:55
  SPEAKER_01: I hope it works.
• 13:56
  SPEAKER_01: I think it's a good thing for everybody.
• 13:57
  SPEAKER_01: Affordable housing is definitely needed.
• 13:59
  SPEAKER_01: We need it here in Texas, desperately.
• 14:01
  SPEAKER_01: So it could work, but I'm concerned.
• 14:05
  SPEAKER_00: Yeah, one thing that I am interested to see how it plays out is the stigma around some of these factory-built homes, mainly because I think a lot of times they're associated with, and I and I've talked about this before with guests on the podcast around the whole trailer park concept and when people think of these units.
• 14:21
  SPEAKER_00: And I wonder if that is more of a generational thing.
• 14:25
  SPEAKER_00: And so what I'm interested to see how it plays out is does the next generation continue to see it the same way, especially if depend and I suppose a lot of times it depends on where is this home placed eventually, whether it's a modular home or a, you know, a mobile home, where is it placed?
• 14:42
  SPEAKER_00: And depending on that, maybe it's more so the location versus the the home itself.
• 14:48
  SPEAKER_00: But I I think there's a I still think there's a stigma that a lot of the developers in this asset class are battling with consumers, trying to get them to open up and be open to these specific homes because I mean we still see movies and everything like that that has, you know, that shows crime and in trailer parks and things like that, right?
• 15:07
  SPEAKER_00: So there's still this, it's still being pumped into the people, right?
• 15:11
  SPEAKER_00: To have this certain view of what those look like.
• 15:14
  SPEAKER_00: And that's a hard thing to change.
• 15:16
  SPEAKER_01: Well, the the trailer park mentality certainly exists, and some of that's completely justified.
• 15:23
  SPEAKER_01: You go across the south, and there are there are these communities, and the houses are falling apart, and there's cars on blocks, and you know, you got the guy walking around in his wife beater, smoking a cigarette, you know, you got the Joe Dirt mullet.
• 15:36
  SPEAKER_01: Like that's a stereotype that exists for a reason.
• 15:39
  SPEAKER_01: Those are real.
• 15:41
  SPEAKER_01: But that's not the only thing that exists amongst that asset class.
• 15:45
  SPEAKER_01: And if you go to some of the ones that have been developed in Texas, some of the ones that we're working on, these are beautiful communities.
• 15:51
  SPEAKER_01: They have parks, trails, amenity centers, swimming pools, landscaping.
• 15:58
  SPEAKER_01: It can be a very nice asset class.
• 16:00
  SPEAKER_01: And that's where the money is going.
• 16:02
  SPEAKER_01: That's where the institutional buyers want to spend their money.
• 16:04
  SPEAKER_01: In a 500 unit or larger park with great amenities that's beautiful, that people want to go to, that is a draw.
• 16:11
  SPEAKER_01: It it in itself has enough momentum to draw people to it.
• 16:17
  SPEAKER_01: Not the not the 20 unit park that you know this guy owns that he barely takes care of, and you know, it's the cheapest place in town to live.
• 16:25
  SPEAKER_01: But that's not that's not what is being developed currently.
• 16:28
  SPEAKER_01: And so I think that there is certainly a lot of effort and a lot of a lot of good results changing that stigma, but it's slow.
• 16:35
  SPEAKER_01: And I think the stigma still does exist.
• 16:37
  SPEAKER_01: And I think that that's going to continue for a while.
• 16:40
  SPEAKER_01: But there's a certain portion of the population that, stigma or no, they have to be in that particular asset class because they can't afford to go to the next asset class up.
• 16:49
  SPEAKER_01: And so I think that's a that's a big component here of from a pricing standpoint.
• 16:54
  SPEAKER_01: Some people need to be there, and that's what fits their budget.
• 16:57
  SPEAKER_00: Yeah, what's interesting, one last thing I'll add on this is that, you know, the the concept of the modular homes obviously goes back a ways.
• 17:04
  SPEAKER_00: And so I think it's maybe picking up some steam today, because even my parents back in gosh, it would have been 19 and late 90s, they bought a modular home.
• 17:17
  SPEAKER_00: So we had these semi showing up to this acre and a half, two acre lot and basically pieced together four different pieces into this two-story home that all were built inside of, you know, indoors, right?
• 17:30
  SPEAKER_00: Inside of a factory, and it was just shipped to the site and then put together there.
• 17:33
  SPEAKER_00: And they lived in that house for a number of years.
• 17:35
  SPEAKER_00: So this has obviously been a thing for a while.
• 17:38
  SPEAKER_00: And uh, yeah, it'll be we'll we'll keep an eye on this and see how this changes and if if the percentage of overall housing increases at all in this asset class, um, because it still remains a pretty small percentage overall, uh, but we'll keep an eye on it as we go forward here.
• 17:53
  SPEAKER_00: All right, well, let's go ahead and move into our last article.
• 17:56
  SPEAKER_00: Uh, this one comes to us from the Florida Senate, and we have a few other sources that we've used with this one as well, since we're going to take a look at Texas and some other states.
• 18:05
  SPEAKER_00: Headline reads: Florida put a shot clock on permits, and missing it means automatic approval.
• 18:11
  SPEAKER_00: So, specifically from Florida, Florida's permit reform has been live since July 1st.
• 18:16
  SPEAKER_00: Hire a private provider, and the building department gets 10 business days.
• 18:20
  SPEAKER_00: Single trade work on a one or two family home drops to five business days.
• 18:24
  SPEAKER_00: Miss the deadline, and the permit is deemed approved automatically.
• 18:28
  SPEAKER_00: Use a private provider for the full scope, and commercial permit fees drop 50%.
• 18:33
  SPEAKER_00: Partial scope still gets a 25% fee cut, and residential work under$7,500 no longer needs a building permit at all.
• 18:42
  SPEAKER_00: All right, so how about the rest of the country?
• 18:43
  SPEAKER_00: What who else has things like this going on?
• 18:46
  SPEAKER_00: So 18 states now force cities to act by a deadline or lose the decision.
• 18:51
  SPEAKER_00: Texas has run the toughest version since 2019 at 30 days on plats.
• 18:56
  SPEAKER_00: Georgia gives 45 days on an initial permit review.
• 19:00
  SPEAKER_00: Wyoming passed its own 30-day rule in March, and it was also live since July 1st.
• 19:05
  SPEAKER_00: Arizona now fines a city$5,000 every time it stalls a home permit.
• 19:09
  SPEAKER_00: And new research on 1.1 million permits says delays explain 30 to 43% of the gap between fast and slow cities.
• 19:18
  SPEAKER_00: And last thing here is just some bullets on what Texas has learned.
• 19:23
  SPEAKER_00: So, since Texas has had this around since 2019, what are some of the things that they've learned when implementing this first?
• 19:29
  SPEAKER_00: And then also some of the things that they changed when uh they passed a new bill in 2023.
• 19:35
  SPEAKER_00: So Texas passed the strictest shot clock in the country in 2019, 30 days on a plat, 15 on a resubmittal, automatic approval if missed.
• 19:44
  SPEAKER_00: Four years later, the legislature had to go back and fix it.
• 19:48
  SPEAKER_00: The 2023 rewrite pulled site plans and construction documents back out.
• 19:52
  SPEAKER_00: Cities got the right to take multiple 30-day extensions instead of one.
• 19:56
  SPEAKER_00: In exchange, cities must publish the full list of what they require, and they can no longer demand studies, state law does not authorize.
• 20:05
  SPEAKER_00: So it sounds like, and maybe this is what we always talk about in the show, it sounds like things tend to go pretty far one direction and then they kind of come back to the middle to a certain degree.
• 20:14
  SPEAKER_00: I'm guessing on the development side, maybe there's some things here that could still be improved in the state of Texas.
• 20:19
  SPEAKER_00: But what are your thoughts on Florida implementing this this year?
• 20:22
  SPEAKER_00: And it looks like some other states are following suit with what Texas did several years ago.
• 20:27
  SPEAKER_01: What's funny about this is that, and it's probably not shocking, is that the the cities hate this situation.
• 20:34
  SPEAKER_01: I mean, they just bitch and moan about this so much.
• 20:37
  SPEAKER_01: They're like, oh my gosh, it's just so difficult for us.
• 20:40
  SPEAKER_01: I mean, just suck it up, guys.
• 20:42
  SPEAKER_01: Like, come on.
• 20:43
  SPEAKER_01: This is like just figure it out.
• 20:45
  SPEAKER_01: In in our world, when we have to build something or create something, that's what we do.
• 20:49
  SPEAKER_01: We get hard stuff thrown at us all the time.
• 20:51
  SPEAKER_01: We have to just figure it out.
• 20:52
  SPEAKER_01: So the the feedback I hear from cities on this, they're they're not all this way, to be f to be fair.
• 21:00
  SPEAKER_01: But there is a certain amount of complaining that I find funny.
• 21:04
  SPEAKER_01: But they are having to figure it out.
• 21:05
  SPEAKER_01: There's no choice.
• 21:06
  SPEAKER_01: It's not like they can they can't not do it.
• 21:09
  SPEAKER_01: There are penalties here.
• 21:10
  SPEAKER_01: And where we're seeing this, there there's some information I found.
• 21:14
  SPEAKER_01: So in 2024, there was a memo from City of Dallas reporting that post-the 2022 changes and the other items that they had uh enacted, the median issuance time for permits had dropped to 112 days.
• 21:32
  SPEAKER_01: And apparently that's was their lowest ever at that point.
• 21:36
  SPEAKER_01: Now I still think 112 days sounds like a long time for as simple over review as they often have to do.
• 21:42
  SPEAKER_01: But maybe AI and some other things will help that.
• 21:45
  SPEAKER_01: For sure, there's a lot of opportunity for cities to chase that number down.
• 21:49
  SPEAKER_01: 112 days being the best they had ever done still seems like a long time.
• 21:54
  SPEAKER_01: The city of Dallas is not known for being fast at this.
• 21:58
  SPEAKER_01: And I think that.
• 22:00
  SPEAKER_01: But this coupled with a lot of the AI solutions, if the cities will be forward thinking and enact them, a lot of this stuff can happen fast.
• 22:07
  SPEAKER_01: Now, part of part of the Texas one, there's two two elements to the Texas shot clock.
• 22:12
  SPEAKER_01: You've got the the platting portion and then you've got the permit and inspection portion.
• 22:17
  SPEAKER_01: And what I think needs to be done more often is this element that is coupled with a permit portion, where if the city fails to issue an approval, a conditional approval or a disapproval, like they fail to respond within 15 days after the deadline, then the applicant can bring in a private qualified licensed reviewer or inspector instead and do it themselves.
• 22:40
  SPEAKER_01: And and then that third party's approval is binding.
• 22:44
  SPEAKER_01: I think we should do this across everything.
• 22:46
  SPEAKER_01: And I've just I've had to live with these issues.
• 22:48
  SPEAKER_01: If you're not in a city and you're in a county and they don't have the same shot clock, because this is mostly a city thing, they don't have the same shot clock, and they can just drag it out for four or five, six months to review one thing.
• 22:59
  SPEAKER_01: And then they're gonna send you back a comment, and that's gonna be four or five, six months for them to respond to that comment.
• 23:04
  SPEAKER_01: And it's just absolutely ridiculous.
• 23:06
  SPEAKER_01: Whereas if they don't respond in a certain time frame, I will happily go hire my own third party engineer.
• 23:14
  SPEAKER_01: I mean, if an engineer is got a stamp from the state, it means they're qualified to review, right?
• 23:20
  SPEAKER_01: So whether they work for the city, or whether they're a subcontractor of the city, as is often the case, or whether they're a subcontractor of me, it's still a licensed engineer.
• 23:28
  SPEAKER_01: So it shouldn't in theory matter who's doing the work.
• 23:30
  SPEAKER_01: And I'm happy to pay.
• 23:32
  SPEAKER_01: So if developers are willing to pay for the engineer to do it, and the city doesn't have to even deal with it, that's a big win, right?
• 23:40
  SPEAKER_01: If we have a good licensing process and all the engineers are as good as they should be, then why don't you let that sort itself out?
• 23:46
  SPEAKER_01: Because most of us would happily pay for that engineering review, whatever it costs, in order to speed up that time frame.
• 23:52
  SPEAKER_01: So more of that is definitely needed because I think that is probably the way to do it, probably to handle all of this, pull more of it away from the city, then there's nothing for them to complain about.
• 24:01
  SPEAKER_01: Let the private sector do what it does.
• 24:03
  SPEAKER_01: Let let business owners and operators do you let the free market function as it should, and things will happen much faster.
• 24:11
  SPEAKER_00: Yeah, and I should have mentioned, I didn't include it in here, but I know we have a lot of you that are members of the Georgia Residential Land Development Council.
• 24:18
  SPEAKER_00: And so, and you listen in, and I know you have done, you've had a lot of good things happening down there in Georgia.
• 24:23
  SPEAKER_00: And specifically, there was a final plat reform that that group was responsible for in the state of Georgia that um they're saying is going to save two and a half to 4% off the price of their new homes, which I think a lot of that had to do with the carry costs that developers were facing because of how long things were taking to get for final plats to be approved and everything.
• 24:42
  SPEAKER_00: So there's a lot happening around the country.
• 24:44
  SPEAKER_00: And I think for any of you developers listening in, you know, get involved with some of these groups within your local states and communities who are, you know, advocating for some of these changes and everything.
• 24:53
  SPEAKER_00: And, you know, we're seeing things happen around the country for those who are actually getting involved to make things happen.
• 24:58
  SPEAKER_00: So it's good to see.
• 24:59
  SPEAKER_00: Well, Charles, any final thoughts before we wrap up today?
• 25:02
  SPEAKER_01: Well, I really I love this conversation about the private sector doing more.
• 25:08
  SPEAKER_01: And I think if we're we talk about this all the time about the entitlement process and how slow and laborious it is, and most of that could go away by bringing in people that are qualified, but that are in the private sector.
• 25:21
  SPEAKER_01: So I think that's probably where the biggest changes could happen the quickest if we could get more laws passed to let the private sector handle a lot of that review.
• 25:30
  SPEAKER_00: All right, guys.
• 25:31
  SPEAKER_00: Well, that is all for this episode.
• 25:34
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• 25:36
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• 25:38
  SPEAKER_00: Otherwise, we will see you all back here tomorrow for our next interview episode.