2032: Shocking $275 Trillion Truth About Housing and Building Requirements & Its Global Effects! John Williams Part 1

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So I closed out last month on the real estate side, sold three houses, got two more under contract. It's been a long time coming. But all that stuff that Jason and the rest of the team and I have been working on since Jacksonville, all coming through. So all good stuff.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome, friends, romans and countrymen, to episode 2032. 2032. And thank you for joining me today. So we've got a great guest on today, a controversial guest, John Williams is on the show. I was invited to come on to his show a few weeks ago and we did a great show together. So check that out on his channel. That's this is John Williams and he's got some great insights into the market. I will say we do disagree on a few things, but overall we agree that the whole game is rigged and we better do something about it. Yes, we definitely better do something about the rigged game in which we're in. And also we both agree for sure that we cannot depend on the government or the powers that be. We've got to make our own plan, we've got to take care of ourselves and design our own future. One of my great mentors early in my life discovered him at age 17 was none other than the famous business philosopher Jim Rohn. And he said, if you don't have your own plan, you will by default fit into somebody else's plan. So that is definitely truer than ever today because, wow, there are just so many forces that are trying to attack us from every angle, whether it be the economy, personal finance, healthcare, big pharma. It's just unbelievable. This just, it's like an attack at every angle and we've got to fend them off. But you know, to Put things in context. Context. Many generations before us have felt this way too. It's just that now my sense of it is that the difference is that all of this stuff is much more sort of scalable and wide reaching due to technology. You know, for example, decades ago or hundreds of years ago, you know, all these powers were trying to catch all the marbles and take them away from you. But it was kind of different back then because, you know, you could just mind your own business, you could live in the countryside, live in a rural area, and you'd be largely independent, right? You'd grow your own food, your water would come out of a well. You were much more independent. Now that we've got this massively interdependent, interconnected world in which we live not only at the local, state and national level, but globally, of course, these supply chains, we've all seen the effects of that. One little tweak in this sort of just in time delivery environment can really mess things up badly. But of course the good side of that is that it makes prices lower, right? And it hides inflation. That would be there. And I could go down a rabbit hole and talk about this for hours on end. But let's get to today's episode. Couple things to share with you before John comes on. Great interview. He's gonna be here with us Wednesday as well, so be sure to catch that because we just talk about a wide ranging bunch of things. But I want to talk to you for a moment about self management or hybrid self management and about getting control. You know, I have long recommended this strategy. It's been about, oh, I guess 15 years that I've been recommending hybrid self management. And I am a self manager of my own portfolio. No, I do not have a bunch of assistants helping me with this. I pretty much do it myself. And you know, I kind of think there's a sort of a disease among rich people or wannabe rich people as well. They're sort of over delegators, right? And I, I don't know, I guess you could criticize me for not delegating enough. But when I delegate, I learn a lot less. You know, I'm just kind of that kind of person that at least with some things I like to roll up my sleeves and be engaged. Maybe it won't always be that way. It certainly hasn't always been that way in the past. But with technology I find that delegation is many times, not always, but many times just highly overrated. You can do things for yourself with a few mouse clicks or A couple of easy messages back and forth on one of these many great communication platforms that we have, where, you know, delegation actually makes it more cumbersome than it needs to be. When you can do things directly, do them easily and efficiently and cost effectively, I say do them directly, right? You know, that's not always the case. Sometimes it's better to have an intermediary party. But the Internet and technology have created this world of disintermediation where we can go directly to the source and make something happen very easily. But that said, I want to tell you about a big disaster that happened with one of my properties last week. Oh my God, I don't know, it made me rethink this whole self management thing. So here's what happened. This property has a cactus on it, and it was pretty big one. And it fell over, it fell down. And the tenant sent me a message and it had a picture, two pictures in fact, of this cactus that was now blocking the walkway into the house. Right? The little walkway up in the front yard. It's big. This thing must have weighed several hundred pounds, I guess. Anyway, I got four estimates, four quotes on the removal and cleanup of the cactus. And it's shocking, folks. It's just shocking to me. I have to laugh about this because it's so, so ridiculous. So the first one was twelve hundred dollars, and then there was one. And you know, I'm not looking at it right now, but I think it was like $800, another one like 700, and another one was 400. And then I reached out. I have a neighboring property where I hired a guy off of either thumbtack or taskrabbit, I'm not sure which one. I think taskrabbit. And he's now doing the gardening there regularly. Every two weeks he comes and mows the lawn. And I sent him a message and I said, hey, Connor, can you go remove this cactus? And he says, send me a picture. So I sent him the picture the tenant took. You know, this so far I've spent maybe, I don't know, two and a half minutes on this whole project. It's been two and a half minutes. Yes, I know, 100. And what's that, 150 seconds I've spent on this project so far? Okay, it gets worse. But wait, there's more. So then I thought, you know what, I have a handyman that I use there that's done some pretty big work for me on a house. He installed a sliding door where, you know, I got a quote from the former Property manager, which I self manage this property now install a sliding glass door. $9,000. I'm like, are you freaking kidding me? So I get my handyman guy to do it. Nineteen hundred dollars, same. I mean, the door is beautiful. It looks great. He did such a great job. And that was about a year and a half ago. Anyway, so I send him a message thinking, you know, he's just a handy guy. He can just get stuff done. I said, hey, can I pay you $200 to remove this cactus, Send them the pictures. And he says, well, I got to get a couple of guys, I got to rent a truck for that. And he says, 350. And I said, okay, fine. So literally within four hours, the cactus is removed. 350 bucks, the job is done. Not 1200, not 7 or 800, not even 400. Oh, Connor, the guy that does the lawn at the other. Yeah, he said $1,000. I got it done for 350 and I think I spent all of. Hmm, let me see. I did not talk to anyone directly, but I did trade some messages with the tenant, a couple other quotes. The gardener at the other property and then back to the tenant, and then my handyman that actually did the job. I think I spent maybe seven minutes. Oh my gosh. Self management, so difficult, so time consuming. Oh my God. Yeah. Get control, folks. Self manage your properties is much easier than you think. But do not do this if you have zero experience. You can do it remotely, no problem. I mean, this, this property where the cactus fell over, I've never seen the property in my life. I bought it sight unseen. Never been to the property, have not even driven by it, much less been inside the property performing great. I get my rent every month early. The tenant sends me the payment via Zell. Gosh, you know, like clockwork. I mean, look, it's today. I'm recording this on the 31st. She already paid the rent last week. Okay. Like, it's just folks, this is just quite easy. It's really not a big deal. Okay. What I think sort of throws people, the hybrid self management approach is the idea that it's always sort of they're taken by surprise, right? It's kind of like an interruption to their day. And it is, that it is. But if you just maintain your composure, realize this is just not a big deal. It's really quite easy. I mean, I didn't know the cactus was going to fall that day. Okay. I did not know this was going to happen. The tenant reported it. And so just with a couple of messages back and forth. Done. It's a snap. Like just no big deal. Get control of your properties, self manage them. Okay, so I wanted to share this with you because there's all kinds of people out there spreading the fear porn. I wish I had some bad news for you. I know my ratings would be so much higher if I had bad news. I'm sorry, I don't. Okay, so here's from CoreLogic. The article entitled US Mortgage Delinquency Rate drops to all time low in May, CoreLogic reports. Although 14 states posted small annual overall delinquency gains, mortgage performance remains solid. Like I've said a zillion times, if you want to have a real estate crash, you need desperate distressed sellers in mass. You need massive numbers, millions of them. We hardly have any of them now. Someday they will come. But remember, the higher the Fed raises the rates, the more valuable all of the existing mortgages become. 25% of the country at or below 3%. 65% of the country at or below 4%. 40% give or take of the country, no mortgage at all. How are they going to be distressed when they have such low payments or no payments at all? I mean, even with a job layoff, these mortgage rates are so low. Their unemployment check would probably cover their mortgage and leave quite a bit of money left over. Yes, that's the market we're in. And that's why inventory is so low, because these people don't want to sell their homes. Okay, let's dig into this Mortgage delinquency rate. The fear porn that isn't here. Okay, early stage delinquencies. These are 30 to 59 days past due. They were actually up slightly 1.3% from 1.1% in May of the prior year. Okay, so in a year they went up by 0.2%. Adverse delinquency, which is considered 60 to 89 days delinquent.4%. And that's up from May of last year, which is 0.3%. Nothing big here. Serious delinquencies, 1% they were down. These are the people that are more than 90 days past due. Okay. Including loans in foreclosure, the serious delinquencies went down to 1% now. Okay. Down from 1.3% a year ago and from a high in the COVID era, August of 2020, the high was 4.3%. Okay, so you get a comparison there and I wish I had the stats. I do not have them handy from The Great Recession 2008 stats to compare this. Unfortunately I do not have those handy because the compared to what? Question there would be like, oh my God, there's no delinquencies at all. Right. So this is just, just crazy. An all time low in delinquencies, the transition rate. This is the share of mortgage that transitioned from current to 30 days past due.6% and that is unchanged. It's the same amount. So anyway, it's at a historic low. And here's a chart if you're watching this on video where you can actually see visually what's going on. There's just no distress in the market. Nothing to speak of. I mean it's just like a non event, it's a nothing burger. Okay, let's look at inventory then we'll get to our guest, John Williams today. Okay, so these are the clickbait headlines, you know, the fake news Inventory skyrocketing. Yeah, it's up ever so slightly. Okay. 479,000 homes for sale in the US still in urgently low inventory level as we are now in the Jason months. July, August, September, October, November. J A S O N your host name. Okay, that's the only name in the calendar. You know, demand still exceeds supply by a wide margin and we just see really, really low inventory persisting in the marketplace. So sorry, can't give you any bad news. I wish I could. We shall see. I'm going to show you an interesting study on a future episode coming up here. Well, it's not a study, it's my own study of why rents are way too low and the upward pressure coming at the rental market, which is going to be extremely significant. So look for that episode coming up. Maybe I'll get to it Wednesday, maybe the following week. But you're going to be blown away by this because I have been putting together a whole study on this that's going to be really interesting for you. Okay, let's get to our guest, John Williams. Here we go. It is my pleasure to welcome my buddy John Williams to the show. You may be familiar with his great work. I've been following him for several years. He hosts the YouTube channel. This is John Williams. Welcome, John.

Hey, thanks a lot for having me on, Jason.

It's good to have you. So you were showing me a really interesting website the other day that talked about the building requirements into the future in terms of how much housing we need, how many buildings we need in general, the regulations put on new construction that are pretty darn heavy, that basically have the effect of creating more homelessness or at least moving people down the ladder in terms of what they can afford to buy. Do you want to start off by maybe sharing that on the screen and we'll talk about that a little bit.

I think a lot of people, they don't know what's about to happen and they're soon going to find out. I'm going to blow your mind with some of this information.

So it really was quite mind blowing.

So let's just first start with like credibility, right? Let's, let's kind of like understand who's actually funding it to. Just so we all kind of like understand what's actually happening. UK Government, Ministry of Foreign affairs of Denmark, Federal Ministry of the Environmental, Nature, Conservation of and Nuclear Safety. Right. You have ikea, l', Oreal Oak Foundation, Hewlett Foundation, George at Open Society, everybody.

Know George Soros, his group FedEx.

You obviously have right here Google. Yeah. But then you have some really interesting players like Hillary, Hillary Clinton.

Remember some of these, some people only hear this on audio. So we do have to say, okay, so you have the Clinton Foundation.

Yeah. And you have the World Bank. When you click on leaders leadership, you look at the board of directors, you have Michael Bloomberg, right?

Yeah.

So you look at Bloomberg and you look at some of these players and you look at the amount of money and authority they have behind them. They're, I believe, someone you should consider paying close attention to. And you look at, you click on our cities and you might think, oh, it's not going to happen. I live in Texas or I live in Florida. Look at this map. These are all the locations that have already signed on to these pledges.

Yeah, it's basically all of the key places around the world. That's what he's showing us.

Yeah, yeah. So for America, so far there's 187 cities. But the ones that are signed on for a bulk of the pledges, we have Miami, we have New Orleans, we have Houston, we have Austin, we have Phoenix, we have la, San Francisco, Portland, Seattle, you have Chicago.

Vancouver, Canada.

Yeah, you have all throughout Canada. Boston, New York city, Philly, Washington, D.C. okay. And so if you click around at some of these locations, I mean it's really shocking. Like if you click on Los Angeles and you click on View City Profile, then you click on accelerators, you look at all these pledges that they have to reduce cars, reduce carbon emissions, upgrading all these building standards, it's really shocking. Like we pledge to enact regulations and or planning policies to ensure new buildings operate in net zero carbon by 2030. And it says we commit to owning, occupying and developing only assets that are net zero carbon by 2030. And so everything is going to be soon about updating and issuing mandatory property upgrades on a lot of old buildings. If you click on what we do, you go to energy of buildings. It says the buildings that we live and work in cause nearly 60% of emissions in C40 cities on average and up to 80% in some cities from energy used to power, heat or cool. The construction materials and or building sector are also responsible for almost a third of global resource consumption. The need for buildings and infrastructure will only intensify by 2025. We will need to build 1 billion homes. I don't know how the hell they do that. I don't think they will.

Now. Now. Hey, we got to stop right there. Okay, so the need. The website says the need for buildings and infrastructure will only intensify by 2025, folks. That's in a year and a half. Okay, we will need to build 1 billion with a B new homes. That. That's. There's no way that can be achieved. First of all, okay, that, that's like an impossible goal. I mean, there's 8 billion people on the earth. We're not going to build a billion homes in a year and a half. And this is obviously worldwide, not. Not just us. So to give a comparison, the housing stock in the United States, I mean, it depends what stats you look at, but it's somewhere around 140 million units. Okay, that's the number to give you a comparison. So a billion is like an insane number. It's a giant number. But what this really tells you is that this group, and there are many other groups like it, John, are pushing the cost of construction through the roof. So they're just laying on regulation after regulation after regulation. Some of them are virtually impossible and can't even be achieved today. And what's interesting to me is that groups like this act as though we in the US and everyone else around the world just has sort of like unlimited amounts of money to fund and pay for this. Where does the money come from for these? Construction costs are already very high. Right? Yeah.

McKinsey. McKinsey said the cost to do for net zero transition 275 trillion between 2021 and 2050.

Okay, let's give them the. Compared to what? That. So $275 trillion with a T. So the GDP of the United States is about 23, 24 trillion a year. The GDP of the entire planet ear all humans working for one year is just over a hundred trillion dollars. So this is a $275 trillion expense, according to Mackenzie.

Wow. So when people ask, how is this going to get funded? Well, wealth is going to be stripped from the citizens. That's how it's going to get funded. There's going to be new taxes to the likes of which we've never seen before. There's going to be new costs the likes of which we've never seen before. There's going to be unlimited money printing. So it's going to be something big.

And so what you mean there is new inflation? Right. When you say unlimited money burning, they're.

Going to print it, they're going to tax it, they're going to steal it. So they go on to say about 60% of buildings that will exist by 2050 haven't been built yet. This means construction, constructing a city the size of Stockholm or Milan every week until 2050, or the city size of Singapore or New York every month.

C40, let's just reiterate that. So this means that the demand for construction is build a new city the size of New York or Singapore every month until 2050. So for the next 26 years, they say we need to build all of that. That is absolutely shocking numbers. And folks, what you might be thinking is there's no way there's that much demand for new buildings and new homes. But what I predict, and John, I have a feeling you're going to have some thoughts about this, is that they are going to try to condemn a lot of the properties that currently exist under the guise of being green, because these properties aren't good enough. They're going to offer buyouts. They're going to say eminent domain. I mean, in the United States, you know, people have rights, fortunately. Well, you know, whatever rights are left. But, you know, the government has to acquire properties through eminent domain and they have to pay you for the properties. Right. So what if they just go all out and AOC has her fantasy come true and they just take all of these older homes and they just basically say, look, you're forced to sell them to the government and we are going to build new homes that are net zero and carbon neutral in their place. Who's going to be able to afford these property? This is just like. It's a. It's a complete fantasy, this whole thing.

Yeah, it's going to happen, though. But it's not going to happen. I believe on their timeline, I think.

Some of it will happen for sure.

They set these huge lofty goals and Be like, oh, look, we missed the target or we're not going to make it. Right. And then so they continue to do this. They set these big lofty targets and like, all right, well let's just hit this soft target. And then people are like, okay, that's not that hard. And before you know it, that target gets bigger and bigger. And then, yeah, they don't hit their exact mark in terms of like timing, but they get what they want and they're going to enforce it by law or authority or whatever they have to do. It's already happening. Like look at New York City, for example.

Local, which is we got to build a new New York City once a month for the next 27 years.

Look at this article here. Local Law 97. They said that the loony law spells financial ruin for many of the city's 3,700co op buildings, which is home to 800,000 apartments. It requires buildings of more than 25,000 square feet to switch to electric heat or replace. There are boilers cut down on emissions. Right. But look, it says the Real Estate Board of New York estimates that affected buildings will face 200 million in penalties if they don't comply, rising to 900 million. This is annually by 2030.

Wow.

And so this is currently 5500, if my memory serves me correct. 5500 buildings now and then it rises to like 15,000.

And by the way, we're looking at, just for reference, we're looking at the New York Post website right now. Okay. This is the New York Post. And John, you know the old saying we both like to use. Money always goes where it's treated best. I can see a flight out of left wing cities like New York City, that the flight will just accelerate with stuff like this.

Yeah, yeah. I mean it's going to get very interesting. Like the fines are going to only just continue to increase. It says the law requires larger buildings to cut their carbon by 40% by 2030 and 80% by 2050.

I mean, 2030, how can you make it? If you've got a building in New York City and you've got six and a half years to cut your carbon emissions by 40%. I mean, how do you do that? That would cost an absolute fortune to comply with that.

Yeah, read that right there, that I highlighted.

Yeah. Fines for non compliance can reach $1 million a year. So these co ops in New York City, these apartment buildings, these condo complexes, they will just go bankrupt and people will flee. The association fees will. Or the co op fees will just skyrocket through the roof. There will be massive special assessments and people will put their units on the market and they'll move to red states that don't have these ridiculous requirements. They'll all keep moving to Florida.

Even. This stuff is happening in Florida.

Yeah, I know, I know. I'm just saying it's to a lesser degree. This is a global phenomenon, folks. You know, there's nowhere to hide. There really isn't. But you know, it's always a matter of degree and you know, it's much worse in blue states and especially in far left cities, it's just dramatically worse.

Yeah. So here's, here's my take. I think that currently red seats are a hell of a lot better, there's no doubt about it. And they will probably be better in the short term. Next five years, seven years, 10 years, they're probably going to be a lot better than being in LA or New York City, there's no doubt about it. But if you look at the trend, that's what, what's actually happening, politicians are slowly buckling and buckling and buckling to more compliance towards policies that were 10 or 15 years ago radical in places like California. But now you're starting to see these things starting to pop up here, like the discussion of rent control and the discussion of affordable housing and all these discussions popping up now. Ten years ago nobody talked about any of that.

No question. Yeah.

So it's like you're seeing trends and I think we should pay attention to these trends, but you're seeing insanity in New York and LA and all over California. Like, look at this. And city residents in condo and co op buildings. The law will eventually have more than 12,000 buildings with 832,000 plus units and collectively staring at fines of $900 million a year. So yeah, I mean, it's crazy. It's interesting to kind of watch. But if you look at this, it says C40 sports cities and implementing ambitious building energy efficiency initiatives and catalyzing the cleaning up of the energy supply in line with the 1.5 climate mitigation, but implementing and enforcing building energy regulations in mandatory performance standards for existing buildings. So what does that mean? It means that you're going to come out of pocket to do these standards and if you don't, you're going to get, you're going to get hit. Including measures to reduce embodied emissions in buildings and benchmarking. You know what's interesting is like they come in and you know this company will come in and give a survey and they'll tell you what your emissions are, right. Oh, if it's legitimate or if it's not legitimate. And they give you this thing, here's a checklist of all the things you have to do to your property.

Right.

How do people do that? When most people are, you know. Sure. There's a lot of people that own properties outright. No doubt. There's a lot of people also that refinance the hell out of their properties at 2, 3% mortgages. And they took that money and they reinvested it. Now they have a bunch of properties with very little equity. And they're looking at this like, okay, well how do I come out of pocket to do all these new energy upgrades? And then you look at Blackstone and just raised $30 billion to invest in real estate. I think they have a plan. And that plan is going to be to buy up a lot of distressed property.

Yeah. And Blackstone and all of the big institutional players will, you know, they'll be able to afford the cost of compliance. Right. Because they have big scalability. So that's the way it is. Now, if you look at Wall street, if you look at Mark Zuckerberg going in front of Congress saying, please regulate us, and then you look at OpenAI going in front, Sam Altman going in front of Congress saying, please we need to regulate AI well, the reason they want these regulations is so they can build a moat around their business because only the big players can afford to comply with the regulations. And then if the regulations are too stringent on them, they'll say, well, you know, they'll just go lobby and pay off the politicians and bribe them and get them lightened a little bit. But that's how they create a moat. And the example, John, I always use is Wall street and banking. Because if you look at Wall street and you compare Wall street to sort of the rest of the world, there is so little startup culture on Wall Street. I mean, what startup is competing with Goldman Sachs? Like nobody, Right? Because they've got this giant moat of regulations protecting them from competition. That's essentially what happens. It's called regulatory capture and rent seeking, you know, and that's what these big players do. It's just a whole different game for them. But on the way into that, if Blackstone, for example, needs to buy up a whole bunch more properties, individual mom and pop investors might really profit from that because on the way into that, they can peel off and sell. Right. As Blackstone has to do quick roll ups. And you know, we've certainly seen a Lot of investors profit from selling their properties to hedge funds and you know, and big institutional players. So yeah, interesting.

It'll be interesting to kind of see how this thing kind of plays out. I do think that it's going to get very beyond people's wildest expectations the next five or 10 years. A lot of people on Twitter, I'm on Twitter all the time, like scrolling see what people are saying about real estate. And everybody thinks that the world is going to go back to 2017 and 2018, 2019. I don't think so. Like, I think that the haves and have nots, it will never, the gap will never be greater over the next decade or so. Then it's up to people to make smart decisions, like well informed decisions. Really doing the research, making smart investments. You don't want to sit in a bunch of cash because at the end of the day they're going to print the hell out of it. So you have to kind of have those options. You got to have a good business that's making money. You have to have some good investments, you have some cash and kind of be able to pivot, you know, because who knows how this is all going to play out, but they're going to be incentivizing and implementing citywide actions towards decarbonization. I actually saw this other thing. I'm going to show it to you. So Ithaca, New York is the first city to fully decarbonize.

That's where Cornell University is. Right? Aren't they in Ithaca?

Sure. But look at this. So Ithaca, New York becomes first US city to become 100% decarbonization buildings and urban climate change milestone. Right. But you scroll down here, you know, well, what does this actually mean? Well, hedge funds are actually me lending money and basically putting liens on properties of property owners so they can issue these upgrades. Right. They're going to be tapping into private investments for climate projects and it's going to be about 2 trillion a year. Right. But look at this. It says many more cities will follow Ithaca. But local governments are best positioned to lead on buildings. Local governments are in a good place to tackle building issues because many existing policy structures, given the majority of the oversight in the regulating buildings. A big reason why cities have really emerged as leaders on decarbonization, particularly with buildings, is traditionally land use and development has been more in the realm of state and local governments. They set building codes, they have the levers. Senior Policy Council, U.S. green Buildings Council. These cities are feeling the local impacts from climate too and becoming more Tangible, motivating. They are feeling the impacts and knowing that they have the levers to use. Right. What does that mean? Cities across the board, relative to state and federal, are being more proactive on clean energy, building efficiency, and mostly because we have that grassroots connection to residents, we're responding with the request of the community. So this, you know, they are going to be using those levers. They're going to be using the levers to issue these green upgrades.

You know what I can see happening too is I can see the government funding a lot of this through new loan programs, through increasing FHA limits, VA limits, liberalizing them. Because, you know, the FHA has a program that I was familiar with years ago. I don't use it, so I'm not. I don't know if it even still exists. But it was called 203B. I think that was the program. And basically what it did is it gave you money to, if you're acquiring a property, it also gave you money to fix up the property. Right. And so they will do that, and then that'll incentivize property owners to fix up their properties. Right. But it's just like student loans, right? So what happens when you do that? Is it, of course, raises the price of the properties and it enriches a whole bunch of vendors who sell all of the solar panels and the. Everything you need to become net zero. Right. And then the government has to print a bunch of fake money out of thin air because money is lent into existence. Right. And so that creates a whole bunch of inflation. I mean, it's just such a vicious cycle. And it always begs the question, how long can they keep kicking this can down the road? I don't know, maybe another hundred years. But it can't go on forever.

Yes, I was really curious about that question myself. Like, how are they going to push this? Like, how is it going to work? So I went on Miami Day.gov because I'm not far from Miami. I'm like, let's see if there's any companies that are cooperating with Miami dade.gov because Miami is following the same building regulations that New York is, they're just slightly behind. But if you go to miamidade.gov and you look at their emission goals by 2030 and 2035, same as new York, which is absolutely crazy. The same decarbonization pledges. And you're like, how the hell does that make any sense? There's no way. But it is true. So I went on miami date.gov I looked at Their partners. I found a company called Self Solar Energy Loan Fund, and they get direct loans from the White House, the federal government, saying for between 0 and 1% interest, they get this basically free money and they lend it out to the general public at 5 to 6% interest and they make the spread. And that's the model. So, like, people need to do these upgrades. You're a developer, you need the upgrade. They give them the money. They just like start basically handing out money at 5 to 6%. But there's other companies like Pace and these other ones where they'll actually put a lien on your property and you can't sell the property until the lien is paid. Yeah, right.

Of course not. Because you can't sell the property until your mortgage is paid either. It's the same idea.

No, no, I mean, so like with. Yeah, I understand. I get what you're saying. But there's like prepayment penalties and stuff like that to where it's like when you. If you have a $300,000 mortgage and you say, I was 400 grand, you're going to make the 100 gross. Right. With Pace's model, you have that number, but there's also like a balloon or there's like some additional fee that you have to pay to try to get out from underneath of that obligation.

Right? Yeah, yeah. So essentially what they did with Obamacare is this. It was the first time ever that the Supreme Court upheld forcing people to spend money that is after tax dollars. Right? That was the first time that ever happened. And that's why it's unconstitutional, because the government is not supposed to direct how you spend money after you pay your taxes. And that's what Obamacare did. And I think we're going down the same road with this because they will likely say, look, property owner, you have to spend money on this. We'll give you a loan to make you an indentured servant. Just like, you know, you almost got to go to college anymore. Right. And get a ridiculous loan to do that. And that's what'll happen. And it'll just push the cost up for everybody. It'll just create more inflation for everybody. It'll increase homelessness. People will be living in smaller, lesser houses than they would have otherwise been able to afford because of these rules. It's just shocking. It really is.

I thought this too. I thought this is interesting. It's happening in California right now, and a lot of people don't know this, but California has this goal of getting CNBC is talking about it. So on California.gov but they want to build 2.5 million homes by 2030. Right. So it's like they have a population of 40 million. They have 14.21 million homes and they want to add 2.5. So they want to basically add 17%, 18% of inventory. Right.

Number, yeah.

So it's like, how the hell would they do that? Well, the easiest way for them to do that, I believe is, is likely going to be not just adus and little, like small, little wins like that for them.

Accessory dwelling units.

Yeah, yeah. It's going to be massive property repositions of either commercial or residential, even things like storage, like they're going to start converting things to housing. Question I have is like, okay, if they, if they move, even if they don't bring 2.5 million, let's say they bring a million. If they start to do something to where they impact supply at that type of level. And the average investor bought deals in California in the last five years at a 5% return and they increase supply 10%. And then insurance and taxes are continuing to rise and utility bills are going to continue to rise during this, like green energy transition.

Right.

Any of these deals make sense. So unless you own that property and you got a really good cost basis on it, like a lot of people with a lot of leverage are going to get smacked in California. So that's why the next couple of years is like, strategy is going to be so important.

And we'll be back with a lot more on this topic with this guest on our next episode.

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