BiggerPockets Real Estate Podcast - BiggerNews: Will Lower Rates Remove America’s “Golden Handcuffs”? w/NYT’s Rukmini Callimachi

Episode Date: October 4, 2024

For years, we’ve been told that lower mortgage rates could reignite homebuyer demand and help improve affordability so first-time homebuyers (or even rookie landlords) can finally buy their first property. But, with mortgage interest rates lowering right before our eyes, we’re noticing something peculiar—affordability isn’t improving. Home prices are staying stagnant, if not rising. Thanks to America’s “golden handcuffs,” we’re still in a housing market standoff, but there might be some solutions to fix it. We’re bringing on The New York Times’ Rukmini Callimachi, a real estate correspondent, to shed light on the vast affordability crisis affecting America. With homes “unmanageably expensive,” regardless of whether you’re renting or buying, we need solutions that don’t just spark up demand (like lowering mortgage rates). There’s one glaring problem plaguing the property market, but why won’t anybody fix it? Today, we're cracking this discussion wide open, speaking on the solutions that could ACTUALLY increase affordability in the future, the rising homelessness problem affecting working Americans and students, and how NIMBYism (not in my backyard) could be forcefully put to stop as communities struggle to build enough housing. If you want to get in (or get back in) the real estate game, whether as an investor, house hacker, or first-time homebuyer, these solutions could directly affect you! In This Episode We Cover: Housing inventory update and the “golden handcuffs” keeping housing constrained  Why homebuyers are stuck and the magic interest rate that could unlock demand  The root of our housing problems and what we must do NOW to fix it  Growing homelessness (even among working adults) and why housing costs have gotten too high  Modular home building and how this new type of construction could change the housing market forever  And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! On the Market Grab Dave’s Book, “Real Estate by the Numbers” Find Investor-Friendly Lenders See Dave at BPCON2024 in Cancun! Cheaper, Faster, and Better for Investors: Modular Homes Make a Comeback Read More from Rukmini Interest Rates Have Dropped, but Homeowners Are Not Moving Connect with Dave 00:00 Intro 02:35 America’s “Golden Handcuffs” 06:52 Homebuyers Are Stuck 11:30 Affordability Solutions 23:55 Growing Homelessness 26:14 Construction MUST Change 29:56 Let’s Get DENSE Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1026 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Mortgage rates are starting to come down, which is, of course, encouraging, but affordability actually isn't starting to budge yet. And that's creating this massive, massive logjam in the American housing market. One estimate actually says that as many as 800,000 moves didn't happen last year because of this golden handcuffs effect that's going on. It's affecting everyone, from homeowners to renters to real estate investors like us. So what can we do about this huge problem. There is unfortunately no perfect solution, but there are some interesting options that we're going to be digging into today. Happy Friday, everyone. It's Dave here, and I'm back for another bigger news episode. And today we're talking with New York Times real estate correspondent

Rukmini Kalamaki. And she spends a lot of her time talking to some of the foremost economists and experts on the real estate market. And she has some amazing takeaways about what's going on with affordability, its root causes, the lack of supply that's going on, and what some potential solutions are. In today's episode, we're going to talk about the relationship between interest rates, home sales, and affordability, how we even got to this point in the first place, which is, spoiler, lack of housing supply, and we'll talk about some of the more creative solutions to the supply side of the housing crisis. If you want the latest on modular housing and ADU zoning, stick around for that conversation, which we'll be having at the end as well.

All right, let's get to Rukmini. Rukmini, thank you so much for joining us today. It's my pleasure to be here, Dave. Thank you. Let's start by having you. Just tell us a little bit about yourself and the topics you cover for the New York Times. Yes, I cover real estate for the New York Times. I've been a journalist for 25 years, and I spent a bulk of that overseas in Africa,

in West Africa as a correspondent and later a bureau chief for the Associated Press. From there, I got into terrorism reporting. So for about seven years, I was covering ISIS and Al-Qaeda for The Times, and I now cover real estate and housing. Wow, that's quite a career, and hopefully a little less stressful covering real estate than some of your previous positions. Oh, you'll be amazed at how many opinions people have about real estate. Oh, I'm very familiar with that. They'll feel strongly about it. They do, yeah.

It's a big part of American culture, real estate. And so I think people do do have strong opinions and for good reason. And that's why I have a job. So I'm very grateful for it. Yes. So let's just talk a little bit about one of your more recent pieces where you're talking about the relationship between mortgage rates and home prices. And we, this might be familiar to some of our audience, but we always have new people joining

this show. So can you just tell us briefly how those trends have evolved over the last few years? Well, I think the biggest takeaway right now is that, according to data from federal sources, six out of 10 American homeowners who have a mortgage have rates that are under 4%. If you're like me, you have rates in the 2%. Oh, twos. Those are rare. That's impressive. Well, I think a lot of people refinanced in the twos in the lead up to the pandemic. What that means is that there's what economists are now calling a rate-law.

effect or a golden handcuff effect where people do not want or or cannot afford, you know, to sell their home because they would be hit with, I was just checking the rates on Freddie Mac. And as of this morning, we're down to 6.09% for the mortgage rate, which is lower than it was in the fall, where it was close to 8%. But if you're one of the majority of homeowners who has rates under 4%, why would you want to give up that rate? The second thing that's happened is that there's been such a dramatic increase in home prices that if all things, you know, were equal and I was just to move across the street, put the rate aside, my home here, I bought it for roughly half the cost of what a very similar looking home across the street would cost. So people are being

hit by these two forces, both the very high cost of homes and the fact that they would now be entering a rate that is for the majority of people several points higher than they currently have. And that's created a gridlock where people don't want to sell. And because there's no churn in the market, it's created all sorts of secondary effects where people can't move, people can't buy, and affordability is at an all-time low. Thank you for providing that context. And I just want to provide one other point that this is a major reason, not just why transaction volumes down, which it is a gridlock. We've actually seen total number of homes sold.

It's dropped like 50% since the peak of the pandemic. It's well below what it normally is. And so in addition, you know, this is really impacting the whole industry, you know, especially people like agents and lenders, property managers, people who live off transaction volume are obviously feeling this. But it's also a major reason why prices are not moving so much. Is that correct, Rick Meaney? I think that's right.

And a couple of data points that I collected recently when I was writing the most recent piece. In the period of fall 2022 to sort of third quarter of 2023, 800,000 moves were deferred. 800,000 families, households basically put off moving. So this movement that you tend to have in the industry is just not occurring. people are deferring kind of the move up that you traditionally go through when you get married, have a kid, have a second kid. That family that, you know, pre-pandemic had maybe a one-year-old, now has a five-year-old and maybe

a second baby, and they still have only a single bathroom. They would perhaps have liked to move into something bigger and they just can't. Another data point, since we're on track in 2024 to have the least home sales since 1995, But the country has 70 million more people since then. Wow. So it's just we're really scraping the bottom of the barrel as a result of these conflicting forces. That's a stat I had never heard before that the 800,000 moves had been deferred. Yes.

What is the source for that? Just out of personal curiosity. Oh, it's a paper published last month, actually, by the National Bureau of Economic Research. Oh, okay. It was Lance Lambert at Resi Club, who I think does a really good job of advancing some of this data, pointed it out to me. And it's concordant with everything that we are seeing anecdotally. Well, the reason I'm asking, it's a really interesting stat because there's ways to measure demand that's on the sideline. But that's a new one for me.

Because as an investor or an economist, I'm just curious, if their demand is just permanently lost or is there, Are people just waiting until conditions change? And at least the wording you use that it's deferred means that all these people still intend to move, that they still want to. And is the idea then that they're just waiting until affordability gets restored and then they'll move? So the economist that I served and I spoke to seven for this one piece, they seem to all agree that rates need to get into the mid to low fives for things to start to move. know, in in some shape or form, right? And that's still a long ways away. That's 2025 if, you know, if predictions are on point. And what we don't know is even if rates come down, will the prices of homes continue to rise? There's this kind of Sisyphian battle that's happening for people

who are sitting on the sidelines right now. Imagine first-time buyers. They may be waiting for the rate to come down. But every month that they wait, the home price index is going up. I was speaking to an expert at Harvard at their housing center and who calculated the numbers for me, who said that back when I published this piece, which was a few weeks ago, yes, the rate had dropped more than a point since it's high back then. But he said that in order to get back to where the home prices were, you'd have to rewind the clock to around January of 2024. So, yeah, you have these sort of conflicting forces. And just want to define this for everyone because we're talking a lot about affordability

basically means how easy is it for the average American to buy the average price home? And it's sort of this three-legged stool. There's three components that go into affordability. Home prices, pretty obvious. Mortgage rates also pretty obvious because most people use debt. And then the third one is real wage growth. So that's basically how quickly wages or income are growing. And so basically how easily someone can afford the price point at a given interest rate.

And so what Rick Meena is saying and makes sense is that unfortunately, it's sort of like this whack-a-ball situation where even though we're having mortgage rates start to come down, which would help affordability, it would improve affordability. But at the same time, home prices have been going up, depending on who you ask, like four or five percent. year-over-year, which is pretty considerable. If you think about 5% on the average home, that's $420,000, that's another $20,000 that you're paying, even though mortgage rates go down. So unfortunately, it sounds like affordability, although it's probably trending in a decent direction, I would imagine, hasn't really improved all that much. It really hasn't. And I think that,

I think it's getting to the point where the federal government may need to step in in a more robust way. We're seeing now that it's, this is the first election in my lifetime when housing has actually become an issue that is being debated, you know, on, you know, in front of millions of viewers on television. That speaks to the fact that this is a real stressor, I think, for people. First time, want to be home buyers are not able to buy. And then on the flip side, you're saying, you know, people can't move. And then beyond all that, you're seeing seniors who are on a fixed income. who are being squeezed by every force from rising taxes to rising insurance. The shelter and the roof of our heads has just become unmanageably expensive for a lot of the

country. Put aside the homelessness crisis, but just for, I think, the average American, it's become something that is, you know, really shrinking people's wallets. And that extends beyond homeownership, too, because homeownership is expensive, but rent is expensive, too. Actually, previously this year, is the first time I think. at least the I've seen data, that the nation as a whole was quote-unquote rent-burdened, which means that more than the average American was spending more than 30 percent.

That's like the line that personal finance experts economists say should spend 30 percent or less if you're disposable income on housing. And we were over that. It's actually since come down, which is a positive sign. But this is obviously happening across the whole country in the spectrum of homeownership to renters. And Rick Bedia, you said you've talked to a lot of people. Does anyone have a solution for this? Look, a lot of people seem to be falling down on the same thing, which is, of course, rates have to come down.

That's one thing. But beyond all that, this is really a supply problem. There's just not enough housing. Our country has not built enough housing stock going all the way back to 2008, you know, the housing crash. I'm sure you know this very well, Dave. But on that front, you have so many forces. that are getting in the way. Excessive zoning in so many places where people want to live.

I was talking to an affordable housing project coordinator on a planning commission. And this is in California where there's been emergency mandates, you know, that this has to be built. And there are now such excessive rules about parking at an affordable housing development. Where, for example, for every studio in this building that has maybe 60 units, for every studio, you have to have, one spot for every one bedroom. You have to have 1.5 spots for every two bedrooms, you know, like this this huge amount of parking, which makes the project that is already so expensive, that much more expensive, and makes it very hard, you know, to pencil out. But variations of that are happening all over major metro areas where people want to live. It's difficult, it's onerous

to get new projects built. And so builders, they're going for what makes sense, you know, financially. And what makes sense is going for the higher price point, you know, making a bigger house rather than making, you know, those small ranches you imagine from, you know, the 1970s, which would be a good starter home, you know, for somebody. Yeah. I see this more, I see solutions coming up, at least ones that seem more credible or are actually getting enacted on a local level or even on a state level. And some of those things can work. I mean, the parking thing is totally true. You know, there's these crazy. ratios that you have to form. And it's total digression here, but there's all this data that shows that adding parking doesn't actually increase the availability of parking. I see. It just, yeah.

Yeah, there's this thing called in economics called like induced demand where it's kind of like, if you build it, they will come. If you build more parking, more people will buy cars. And so it doesn't actually help. Same thing. Why a widening a freeway doesn't work? Because it just gets more people to drive. So anyway, that's a whole other time.

topic. It's time for a break, and afterward, we'll have more of my conversation with Rukmini Kalamaki from the New York Times. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late-night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there, in the dark, thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport, while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network.

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standpoint, when you're talking to these economists, does anyone have ideas that could work on a national level? I mean, I don't know if these will work or not, but what I'm hearing from economists is that what happens is you have all of these, you know, valorous kind of recommendations from, you know, reducing zoning around transit to building more, et cetera. And then what happens is that they get clogged down at the level of the Q&A session at Open Micke Night in some little zip code, you know, somewhere. And that's where it gets killed, right? It's the NIMBY, right? Yeah.

And it's the, you know, I've been watching some of these public comments for a different story that I'm working on. And it's so funny how many people stand up at the open mic and begin, I am not against affordable housing. I am, you know, like this list of things they're not against. but, but, but they just don't want another building, another development, anything in their backyard. Nobody wants anything to be built anywhere where they live. And so some of the economists that I've been speaking to, including at Freddie Mac, etc., are saying that there may need to be a larger mandate where the state and the federal government steps in and goes, you know what, that's it, this, you have to build.

You're seeing that in California where you have this emergent, measure that's going on. But even there, I was looking at this one affordable project in Southern California. And immediately, the neighbors file a lawsuit claiming that it's going to create more traffic. And then the lawsuit has to work its way through the legal system. By the way, it's worked its way through the legal system. The price of the, you know, the price of the two by four has gone up. So the price of the project is no longer accurate. And anyway, it's this endless loop where it seems that communities are just not able to solve it on their own. But Dave, I'm actually curious to know what you think are some solutions because I'm still

myself learning about this. Yeah, I don't have any sort of silver bullet. But I do think some of the common things that I've heard about are upzoning, which is increasing the density that is allowed for our listeners. A lot of what you hear, especially in big cities all over the country, so many, so much of the physical land in area is zoned for just. single-family homes. And if you could just zone it for for multifamily, people would build on that property. You also see in states like, I know in Washington state, but I think in Michigan and

Colorado, it's getting popular, this idea that you could adding 80Us where you can build secondary units. But personally, I think that's nice. It's kind of a stopgap, like the quantity of homes that need to be built, not going to be fixed by 80Us. So I think those types of things. And personally, this is a pie in the sky idea. So here's my, my proposal. I'd love to hear Jace the sky and sky. Actually, I have two, I have two pie in the sky proposals for you. One is having municipalities make it easier to build modular and prefabricated homes. And technology has really improved a lot around prefab homes. They're nice. Like it's not, you know, old school kind of trailer looking homes. Like they could be really, really nice homes.

but the permitting process is the same in most places for a prefab home that it is for a custom-built home. Whereas why can't, and I think there are examples of this. I think in Seattle there's some examples of this where the city will just say, like, we're going to work with the manufacturer and pre-approve everything, or deny, but whatever, we're going to pre-inspect all of these different plans, and then people could just build them. And I know it doesn't sound like a lot, but permanent costs are very high. high. And even more importantly, when you are planning to build something, if the permits

take three, six, nine months, which they can, those are holding costs. You're paying a mortgage. You're paying insurance. You're paying taxes. That's tens of thousands of dollars that gets added to the price of construction. And so that's either going to get tacked on to the project or people are going to choose not to develop because it's too expensive. Right. Right. That's so interesting, Dave. There was a recent study out of the Harvard Joint Center on Housing a couple months. ago. And I might be misquoting this data point, but if I remember it correctly, they said that 11% of municipalities around the country have only single family zoning, only. What? Yes. So you're thinking of like, you know, the Westchester counties, you know,

these very fancy bedroom communities outside of, outside of New York, where that is the only type of housing that is allowed. You can't even build an apartment building with nice condos. And I'm starting to look at the history of zoning to try to understand how we got here. You know, this is, just a little bit of homework I've done. But I was told that the very first zoning ordinance that was passed was actually in New York City about, you know, like at the turn of the century or so. And it involved a building complaining about the fact that another building was being built in front of it, so therefore blocking the view. Okay. Okay. So that's like one type of thing. You then fast forward some years. And then in the

the middle of the country, you had a big decision that ended up going to the Supreme Court, which involved the separation of areas. So this is an area where people reside, and this is an area where industry is done. Bactries, etc. Well, that seems to make sense, you know. But from there, you have this proliferation of rules where you end up with communities that can only build single family homes on a one acre plot, you know? On a one acre, you can have dozens of people living in one acre. You can have hundreds of people living in one acre if you were serious about affordable house. Yeah. So among the interesting things I've been reading about, so on on ADUs, I'll give my community here, another bedroom community of Manhattan, an ADU ordinance was passed.

Great. Okay. So you can build ADUs, but they didn't change the parking rules. And so for example, in my house, I have a driveway. Both my husband and I drive to work. We have two cars. And there's no room for a third car, right? So I can build an ADU allegedly on my lot. I have a deep lot, but then where's that person going to park? They're going to Uber everywhere, right? Yeah. You're like, I mean, it's just like it hasn't been thought through. Right. Yeah. I think that's a good example, though. We hear that those types of things all the time where the intention is good, but the practicality, either for the homeowner or from who I talk to developers, you know, it just becomes impractical. It's like these, these rules and the,

layers of bureaucracy, it just makes it the risk reward profile for real estate developers is really tough in these types of market. It is so, so, so risky. And there's so many hurdles to go through. A lot of people are just saying it's not worth it. And I don't blame them. Yeah. Another interesting example, I think in Austin, where they're doing something called, they call it AB units. So imagine a house and then something that looks like an in-law or an ADU. But the two houses, they basically create a zigzag down the middle of the property. And they create two deeds. So you're literally, it's not just that one is kind of grandfathered into the other. It's that you have two deeds with two water meters, two addresses,

and they're allowing that kind of subdivision. This is to your point of upzoning, where you're allowing the actual lot to be cleaved into and creating basically something smaller out of it. This is forbidden in so many communities, you know, because it's, you know, I mean, like you're really creating density there. But they're allowing it in Austin. And some real estate agents there told me that this seems to be helping, you know, in terms of creating a little bit more supply than before. Yeah. And for everyone listening, you know, a lot of our audience is real estate investors. And just to be candid, like real estate investors often benefit from a lack of supply because if you, if you're an existing investor who owns a lot of property that push it and there's a lack of

supply and excess demand, it pushes up prices and that can help investors. But at least my personal belief is like the best thing for investors and homeowners is to get back to a state where like we have a predictable housing market, where prices go up at three or four percent a year. That's what it was for most of, you know, American history. And you know what? investing in real estate was still good then. And that was a period where people could choose housing. They could afford a home if they wanted to. They could afford rent. And it made the whole economy go

better. We had more transaction volume. And I think that part is really important for our audience to remember is that we're sitting right now, even if prices are going up a little bit, at half the normal transaction volume. And that hurts the entire industry. And it hurts the broader American economy. And so I think that's why it's so important to figure out a long-term solution to this, where we get reliable, affordable housing back into the American housing work. Yes, yes. And on the very flip side of this, what's happening with homelessness is just, it is actually quite shocking. Some months ago, I did a story about working Americans who are living in their cars. I discovered that there are now dozens of parking lots all over the country that have been set aside

for what they call the mobile homeless. So basically somebody who's homeless, but who still has a car, right? So there's parking lots that are being set aside a community college in Santa Clara, California for homeless students. You know, these are students, the dean was telling me that some of these students are like straight A students. They just don't have anywhere to live. It's terrible. Yeah, it's really kind of shocking, especially to me as somebody who, you know, is an immigrant, grant. You know, we, we came here because America is the dream. And it's, it's a little bit striking how bad things have gotten. And it's not happening as badly in other places. Like in other states or in other countries, you know, like in, you know, like in my native Romania,

where, where a doctor in a village can make a salary of $500 a month, you know, like it's a very, like, low-income place. You don't see homelessness, you know? You don't. Yeah. So what has gone wrong here that we're ending up with so many people, you know, in in these real dire straits? And then, you know, just a notch above and a notch above, middle income, middle class people that are so cost burdened as a result of their, of their shelter. Yeah, it's clearly a real problem. And hopefully we can start working on some long-term solutions here. Because unfortunately, at least my belief, is a lot of the things that are being proposed are banned. You know, it's like maybe it will help in the short run, but it's basic economics. Like, you just need more supply. That's the answer. Everyone agrees.

Like, both sides of the odds, everyone agrees. More supply. It's just nobody wants it, you know, facing their house. And so at that point, it becomes for the greater good. And it seems like a greater force needs to step in and make it happen. All right. Time for a quick break. Stick with us.

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That's Dominion Financial. Check them out at biggerpockets.com slash dominion. Again, that's biggerpockets.com slash dominion. Thanks for staying with us. We're back with more from Brooke Meaney. Do you want to hear my last hairbrain idea for how to improve supply? I'd love to, yes. And I'm still a student of the speed sale. I'm actually interested in learning about it. So there's not a real suggestion here. It's just sort of a rant. But I gave this rant on our sister podcast on the market the other day. But here's the fundamental problem with housing supply is that construction has fundamentally not changed for literally centuries.

Like if you went to, if you went back in time and looked at someone building a house in the 1700s, there'd be a guy up on a ladder hammering wood with nails, putting on a roof. And it's the same thing today. I don't know how you fix it. I don't know how you have robots or whatever. But like someone needs to solve this problem. And like, I am half joking, but I also think there are examples of this that have worked in the United States. Like, the government passed a bipartisan. Yes, it's possible, Bill, to bring chip manufacturing to the United States because it's an important national priority.

Like, can't we fund research on construction technology the same way the Trump administration put together Operation Warp Speed and they were able to accelerate a vaccine? Like, why can't we, if this is a national crisis, it is. It seems like everyone agrees to it. How do we invest in, like, technology that's going to make this better for the future and create an American advantage in our economy? Like, if the American economy can come up with the solution, it's going to be incredible for the economy for generations to come. I have no idea how to do this, but that's my rant about it.

It's a good rant, but what I would point out is that, you know, I get press releases and I've, you know, spoken to various experts who have sent me to the websites and to speak to people who are doing really innovative things, you know, the modular construction that you mentioned, a colleague of mine is just now reporting on 3D printers where entire houses are being made with 3D printers. I think the technology is actually there. The problems they don't have anywhere to put it, right?

You go back to, you have to have a piece of land to put this down on. And that's where suddenly the entire system gets fried, you know? Permits, regulations, parking, you know, screaming neighbors, open mic night, and then nobody wants to get involved, and then another project, you know, falls apart. Yes. I also, I love how you call community meetings open mic night. I'm going to start calling up that. That's a great way to term it. But I've actually, on our other podcasts, I interviewed a 3D printing company. Yeah. And it's super cool. The technology is pretty amazing. And it's still emerging, but even the early signs are pretty incredible. But they

were describing the same thing, that to get a 3D printer in an urban infill lot, which for everyone just means, like, if you bought like a random plot in the middle of a city, like, it's, it's super expensive. What you need is track sort of like the way big developers, big subdivisions, but those require huge investments. Like, those are nationally publicly traded company that can buy 10 acres, you know, and sit on it for 15 years. Like, startups can't do that. So it'll be interesting. maybe these like toll brothers, these types of like huge companies start buying up these technologies. I don't know. But they were also saying like a lot of the places where they're permitted to build are places

that no one wants to live. So I'm hoping that will change. But there are encouraging things. But yeah, let's just, I don't know. Someone needs to spend a lot of time on this. And it feels like we could like within a few years, we could really have a better construction industry. But maybe I'm just overly optimistic about this.

You know, an economist pointed out to me that the most iconic neighborhoods in America, think of, you know, the village in Manhattan, think of like Chinatown in San Francisco, think of, you know, just think of the most beautiful places in America in terms of neighborhoods, the French border in New Orleans. They're all dense. It's people living on top of each other. And yet in the regulation landscape that we've ended up in, it's very, very hard. to build anything like that anywhere in America anymore. So I really do think there's a regulation arm, a zoning arm of this, that has become unhelpful, that has become a source of problems as opposed to a source of solutions. Yeah, that's definitely true. There needs to be some reduction of bureaucracy and red tape to make this happen. You're seeing it with the lack of the ability to have workers in a lot of, you know, think of all of the resorts, you know, in America.

I've seen stories here and there about, you know, in the beach communities near New York, in Florida, the workers can't live there. And therefore, they're having a hard time staffing, the coffee shop, you know, changing the linens, you know, like the, basically, if you're not able to have multiple income levels live together, then you end up in a situation where the system can't run at all. Yeah, it's not a sustainable economy. Yeah. Yeah.

I mean, I just noticed. I used to live in Denver and I ski a lot. And you see that in ski towns too, you know, people who work at the resorts and who, they are the heart of that economy. You know, if you don't have people working at the ski resort, you don't have that town. And they can't afford to live there. If you don't have the ski instructor in Aspen, it's no fun to go to Aspen. Right, exactly.

So I know that there's a couple of ski resorts that are building workforce housing, which I think is an interesting idea. I don't know enough about it, but they're like building units that they rent to their employees at a subsidized like pretty cheap rate. So I think it was a test. It was just like 60 units, you know, which is not nothing, but yeah, I assume these resorts have hundreds of employees. One real estate source told me that in, in Arizona, in the Sedona area, that the hotel chains, the Hyattes, the Hilton's, those guys, that they were getting involved in lobbying for affordable housing because they can't change the linens, you know, in their hotels.

if their workers can't live nearby. Yeah. Well, I mean, hopefully that continues for whatever the purpose, you know, their motivations. But, you know, when big businesses like that start lobbying, maybe people will start listening. Right. Well, Rick Meaty, thank you so much for joining us today. Is there anything else from your reporting and research that you think our audience should know? I think we've covered it, Dave.

Thank you so much for having me on. Well, thank you, too. Rick Meena. We'll put her contact information and links to all of her reporting. below. And thank you all so much for listening. We appreciate you and we'll see you soon for another episode of the Bigger Pockets Podcast. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday.

I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, K, copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.w.w.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising from

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