What Can be Done About The Housing Crisis?

Let's talk a little bit about the housing crisis. Now. The housing crisis is not just affecting workforce housing these days. It's affecting doctors. In many cities in the nation, including here in Utah, many physicians literally can't afford the median house in the community. So when are you going to fix the physician housing crisis? Or at least do you have any thoughts on what else can be done about the crisis besides build, build, build, build more housing?

Yeah, we can spend a lot of time on this. I mean, the shortest answer is what you just said. Build, build more housing. If there was more housing, housing prices wouldn't be going up at the level they are. Rents wouldn't be going up as quick as they are, which you could argue wouldn't be great things for our investment strategy if we could solve this problem fully. Fortunately for that side, but unfortunately for most markets around the country, we're nowhere near being able to solve this problem. And the problem's only getting bigger. And this most recent crisis of the increased interest rates, that's slowing construction, slowing development, is only exacerbating the challenge. The other big thing is we need private public partnership. So in order to create more attainable housing to bring costs down, we need zoning changes, we need more municipalities focused on allowing denser housing, allowing things like manufactured housing, like that example I just showed of one of the loans we did recently. We need more incentives on attracting developers to build, lowering the friction cost, the time it takes to get through projects, because a big part of the cost of developing is the heavy cost of capital to go through the slow process of getting the project into construction. So it's going to take public private partnership to really solve these problems and create more housing, bring down the cost of housing, the cost of fees and expenses that go to local municipalities and in the nicer neighborhoods, the wealthier communities, those costs become really exorbitant. The number of people who have their hands out to get paid by the developer in order to get that project off the ground to be able to provide kind of that mid level housing that probably you're talking about. For many physicians looking for a nice, depending where you're in the country, four or five, six, seven hundred thousand dollars home. So much money goes into the cost just to get the land to the point of being able to build a home in many parts of the country.

Yeah, I know there's a lot of docs in some cities that would love to find a $700,000 home, but agreed, the empty lots cost more than $700,000.

Exactly.

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