What’s Actually Stopping Us From Building Affordable Housing with Phil Ganz

I'm Leigh Thomas Brown. This is Real Talk with Leigh Thomas Brown and very interesting conversation that I would love to get your feedback on. Love to hear you in the comments. I've got Philip Gantz today from Next Wave Mortgage, and he is very wound up about homeowner associations, affordable housing, regulatory burden. So his energy is going to carry you through this conversation, and I'll see you on the other side.

Tell the audience who Philip is.

Hello, you been in and around real estate? Where are you located? Give us a thumbnail sketch. What you were saying before I remembered to hit record was all the places you've lived, right after I said there's probably not a perfect answer to affordable housing. So we'll just start from what people didn't hear, but now they heard it.

Yeah, I've been in real estate mortgages since May 7th, 2001. I've traveled the world and I've lived in multiple different states. I'm from Boston, Massachusetts. I've lived in Florida for the last 5 years. My family lives in California. I went to school in Ohio and I've been licensed in multiple different states, currently 11 states. So I know what will win in affordable housing. In my mind, I do have a solution. It's not always what people want to hear, but I'm here to tell the truth and only the truth.

Well, I'm anxious to hear what you think the solution is, because I don't think there can possibly be one solution when you consider places as different as Florida and California, which don't have the same population, the same geography, the same tax structure. So I'm super curious as to your big, bold idea, and I hope that all of my listeners are ready to share away. This episode and tell us what you think. So let's go, Philip, give me some ideas about where you see the market behaving, and especially since you're coming from the money side, which is of course the side that we don't hear that much in the affordable space, as much as we hear the elected officials and the realtors talking about it.

Well, they don't know much, you know, as much as this is all I do is affordable housing. So let's take this. The big mistake that people make is They say the United States. This is a terrible mistake. So what I'm going to do is I'm going to break it up into 50 states. Okay. And we're going to have the states compete against each other. And then you can have, you have winners and you got losers. This is not—

are you saying we're a constitutional republic? I mean, that's just crazy talk, Philip.

You got to look at it as all 50 states competing. This is not USA Hockey. Okay. This is the governors competing against every single state, right? They're in business to win, right? Some states win, some states lose. Lose, right? And when you look at affordable housing, the way I look at it is only this issue. We can only look at affordable housing. I'm not going to look at left versus right. I'm only going to look at the policies that win the data. Okay. And what we're going to look at are the states that are mopping up right now. So when you look at the winners, when you're looking at the teams, the states that are winning right now, Florida, Texas.

Why?

Let's talk about why they are And the Carolinas. Okay, we're going to look at the data right now. I'm going to pull up the data for you because you want the data. So the average home prices right now, Florida, $407,830. Texas, $309,450. Carolina, $340,000. South Carolina, $307,000.

Wait, wait, wait, which Carolina? North Carolina or South Carolina? Can't say Carolina. We're two different states now.

North Carolina's—

There you go.

So North Carolina is 340, 100. South Carolina is 307, 144.

Okay. Sounds right.

And this is important data. What does it show you? You know, when you look at the biggest builders and look, I'm not a friend of the builders because they're my competition, but what I tell people is this. I live in Martin County. Right above me is Port St. Lucie County. It's the fastest growing county and the biggest builders are in there right now. And I'm not going to get any of the builder business because they can offer rates as low as 3.99%. That makes housing payments very affordable. So if you see, oh wow, Florida at $400,000 and you see a builder Right. Just to go over the math, if I'm a builder and I offer you 4% on $100,000, that's $400 a month. And at 400— 4 of those, that's $1,600 plus taxes, plus insurance. I'm selling you a house at $2,500 out the door, brand new, 4-bed, 2-bathrooms, brand new. Right. That will come with a lower insurance cost that people complain about, right? That may come with a little bit higher taxes. But the builders in Florida and Texas, the two biggest builders, DR Horton and Pulte, are totally dominant. And I'm going to tell people why. Because they build within— and people in Boston or California will not understand this— but they go to the counties and they say, look, We're going to do these communities. They're called HOA communities. And we're going to— and the reason why they build in these communities is because they can get built on less land. Now, the land you would get is still pretty good, but it's less than maybe the requirement outside of the communities. So they can build 500 homes in an insane amount of time. And not that they would necessarily want to build 500 homes all at once.. But if you said to them, could you? Of course they could build it in 6 months if they wanted to. Right now, the reason why they may not want to do it is, yeah, they want affordability, but they don't want to tank the market either. Right? So they're playing a little bit of a game, but you can build a home. And the reason is because there's no waste of time. They can go to Florida, Texas, the Carolinas, north and south. And they can build very fast without taking years to build a home. And there's a value to time. So if you can build fast, then you can build affordable. And this is a big thing that California and Massachusetts miss out on. They want to take so long with all the government policies that it's not affordable for the builder to sit on land forever. They want to be in and out. They don't want to be here for 19 years waiting for the land price to mature. That's not their building. That's not their business model. So those 4 states are doing the best job of letting them build fast, furious, which is helping home prices tremendously.

But it also has a detrimental impact on a lot of communities when you take what was formerly green space and turn it into a sea of cookie-cutter houses on tiny lots. And that's part of the challenge we run into now, where a lot of areas are pushing back on those big mega builder neighborhoods because we've grown so quickly that the infrastructure hasn't caught up.

Look, that's obviously part of the problem. What we discover is that the government starts creating all these extra layers, doing it for the birds. But let's take a step back. Who benefits from more government? Let me tell you, the government. No one except for the government, right? So they start creating and causing all these issues. Well, let me tell you, having the bonus of affordability, starting legacy at an early age, stopping the age of people home ownership. To you in your 40s far outweighs than the, these green people. And I'm pro-environment. I want to tell everyone this. There is no one pro-environment. I lived in Key Largo. I love the environment. But when people use it as a weapon to, to make themselves rich, you know, this, as you make government, you need more lobbyists, you need more surveys, you know, you want to solve things. And I will tell you what you need to do. You need to be able to build quick, build fast, and more importantly, be able to build to the moon. And this is the reality. If you can build up and put more housing straight up, yes, they will tell you about the environmental impact, right? But you will make homes more affordable because it's a simple math equation. If the supply is greater than demand, home prices go down. This is just the math. So if I can make supply faster than demand, your home prices go down. And the more quickly I can do it, you're like, has there ever been a case study on this? Of course. Let's look at Austin, Texas. Right? So the prices in Austin, Texas had like tripled during COVID because Texas just allows people to build. What happens? Right. Home prices went back down. Right.

One of the issues we've seen with the whole idea of building up is that the one building that collapsed in Florida was that 2022. Put a huge damper on any kind of financing for condos nationally, unless there are insane outfits done to buildings. But what are you seeing on the lending side to get more realistic about options for people in condos? Because I do think it's wonderful if you're a 55+ and you've got an elevator, why not have a condo if you don't need a yard anymore, but they can't buy it right now because the financing structure is so messed up.

Look, it's only messed up because they're fixing the prior issues, right? You have to look forward when you make policies, right?

But I don't agree with fixing the prior issues because that assumes that every building was built with the same faults that that one building was. And I think that's where the craziness has set in. One building falls down, totally sucks. People lost their money, got hurt. That's terrible. But every condo building in the country wasn't built by that same guy on that same situation. So they're all being punished for one building's faults.

You're absolutely right, but I'll tell you a story, right? Well, I'll tell you a quick story that I was once married and my wife owned a condo, right? And my wife banned me and my neighbors didn't want me to attend the condo board meetings. You say, why? Why would you not want Phil Ganz to attend? And I will tell you why. Because I am the justice of truth. I will tell you, you are not saving enough money. I will tell you, you are wasting money. And that is the bottom line, is that this is a deeper dive of unaffordability. Right. And this is what has to be done. There's condos. You're right. There has to be stricter rules in place. Of how to run associations. The reality is, is that a lot of people, when you look at the associations, they want to get on the boards, not because they're the most qualified. They want to get on the boards for self-enrichment. Some of the most unqualified people ever are running these boards. And there definitely needs to be certification, just like you'd become a real estate agent. Just like you become a mortgage professional, would I create a board where you actually have to get licensed? Absolutely right. There definitely has to be some sort of national certification on this. In fact, the biggest cost in any HOA single family is what? Landscaping, right? This is very competitive. And when you start asking it, I'll tell you this, I started asking really hard questions to my HOA association. My wife, you know, owns our condominium and I'm not on the title, but I asked really hard questions. Why are we overpaying 40% compared to our neighbors when we have less homes than our neighboring homes? So we should be paying, you know, more per unit. You know, the craziest thing. And essentially the people running it were not as well qualified as me. And to ask the hard questions, like, what happened? I got a cease and desist. That's what happens. Not like that stops me, but I, you know, I'm, that's what they do. They, they try to hammer you, right? Because the reality is this. No, I just put it on the email. You ask people realistic questions. I actually got a quote from the neighboring people from the same, the same people. And you're like, no way. And you ask any, any landscaper why or how it works, right? Obviously, you know, it's, it's a little bit when you look at these HOA communities overall pay to play, and I'm not insinuating anything like that, but it's the same. There is a little bit of pay to play with some of these contracts that are being handed out. So I do think there needs to be a little regulation on there. And in Florida, they've implemented some new rules. I'm hoping there's some where government can come in to put in more of these regulations to monitor HOA communities, get people licensed, and hold individuals accountable. That's what you would do to fix that issue.

So what you're saying is we should remove regulatory burden from building and add it to HOA.

For building. Correct.

A better offset of regulatory burden.

That's exactly what I would do.

All right.

Bingo.

You mentioned before, of course, the builders do have built-in lenders and sometimes they allow an outside quote, but it's almost impossible to compete because they have that in. Since a lot of my audience is not in real estate, but does shop for homes, why don't you help them understand how the builder's in-house lender operates and some good questions they could ask as they're trying to figure out if they use the their Horton lender, or if they use you because their realtor recommended you?

You know, when it comes to most of the clients from the builders, the incentive is built into the price. This is just true. So like, it's very hard even if I want. And I'll give you an example. I own Next Wave Mortgage. I'm one of the owners. So even if I do a loan for free, it's actually less expensive for an owner of a mortgage company to just not end up using DR Horton. This is just the reality because you're like, well, what do you think the incentive really is? The incentive is probably they build in anywhere from 5 to 10% of the cost. And that's what I would tell people is that you're better off a lot of times to just go with the builders. Now, I would say this, they're like, well, Phil, this sounds like bad news for you. No, because when you go refinance or you go to resell, exactly, that will help us out, you know? And that's what affordability is. I'm looking to win overall, you know? And I'll tell you this, that my dad works at University of San Francisco, and at one time they were offering interest rates of 1%. This is not allowed anymore because the IRS says if it's less than 2% of the going rate, then that's considered a gift, right? This is why my dad said he felt bad. He's like, should I take the 1%? I'm like, even if I do it for free, I can't compete. So of course I said, dad, go for the 1%. You know, why wouldn't you go for the 1%? And that's actually the reason why D.R. Horton, Pulte just put it at 2% of the going rate. If it was less than 2%, that'd be considered a gift. So they actually do this.

Okay. So as we wrap up our episode here, my audience loves a good story. You've been in and around the business for a long time. What's the craziest thing you've ever seen in mortgage world?

Well, I'll tell you the craziest thing of 2026. I helped out an affordable client. They were buying from this old lady. This old lady had a son. The son locked the door. So as you know, that to do an appraisal, you have to like go in every room, right? So we basically couldn't get into this one room. So we told the realtor, we can't close. So look, the realtor undid the lock, appraiser went in, we got our appraisal done. Well, that's where the story starts. The seller locked the door, so eventually they unlocked it. Son comes back and was very upset that the mom had sold the home and called the police and said the mom was senile, which she wasn't, not senile at all. Perfectly fine. Did the police actually talk to the mom? Mom's like, I'm fine. This is such a ridiculous story. So then the son was upset, you know, and then in the middle of the night stole all the steps for the home. And like, basically, like, what do you do about steps? We got new steps. Yeah, they removed the steps from the home.

Like the entrance steps?

Yeah. Was it a straight house?

Were they Not attached to the house?

It was attached. I don't know how someone does this in the middle of the night. This is a great story. So we don't, like, know how you remove all these steps, but imagine you're able to do it. They obviously, like, and the guy was, like, threatening the buyers and threatening them. But the buyers, this woman, I will tell you, was not someone to be intimidated. Luckily, her wife was in the construction business and replacing the steps. Also, when the son showed up, you know, they also had the construction crew show up. And so look, they basically had like 30 people outside the house and they were not going to be intimidated by anyone. So sometimes you have to have might fight might. And I think it was going to end very bad for the son. That wanted to try to intimidate that. But just because, you know, you're an outlaw doesn't mean you're going to intimidate this woman, because this woman was married to a woman that also had very tough friends. And I thought this was going to be like an episode on Amazon where two motorcycle gangs fight each other. And that's what it was over this hole. And that's literally what it was going to turn into of how many people were on this lawn. When you have 60 people show up about the, you know, fight for a home. But the reality is, is that the woman had a right to sell a home. She was clearly fine. She was only like 74 years old that also had a job. So there was more to the story. She was totally capable. And like the son just didn't want to, like, he was upset that he had free rent and at the age of 38, he might have to get a job. Right. This is like a big thing, you know? And I just, you know, this was a crazy story that involved a lot of different people. And for me, this— I'm happy that it got settled, like, calmly at the end. But she lost her steps and the guy's clothes got returned by the police. But that was definitely the story that probably almost ended up on the news.

You know, of the, of, of that, you know, uh, high club over stairs is always good to have a friend or a partner that's able to build stairs. So you don't have to get intimidated by that situation. Phil, if somebody wants to reach out to you and get information on your mortgage company or talk more about regulations and all these really kind of boring issues on paper, but that are wildly important to our entire fabric of our communities, how can they reach you?

You can call or text 617-529-9317.

Thank you so much. And by the way, friends, if you're listening to this on your headphones, don't worry, because all of his contact information will be in the show notes for this episode. So reach out and talk about this, because if we start talking about the regulation overload in all our communities, we could actually take some steps to make things better. Phil, thank you so much for coming on the show and giving us some perspective. All right guys, make sure you hit the bell to subscribe, and we'll see you next time.