>> The 21st Century Road to Housing Act is bipartisan legislation meant to make housing more affordable for Americans.

It's already passed the U.S.

House and Senate and is just awaiting approval from President Donald Trump.

He, though, has so far refused to sign it.

Instead pushing for an unrelated voter ID bill called the Save America Act.

The housing bill would automatically go into effect July 10th, even without the president's signature or he could choose to veto it to break down what the bill could potentially mean for Illinois residents.

We're joined by David Boyd, president of the Real Estate Development group, Chicago neighborhood initiatives, Jeff Smith, executive director of the Institute for Housing Studies at DePaul University, Andorra CEO Mendez president and CEO of Woodstock Institute, nonprofit whose mission is to advance economic justice and racial equity within financial systems.

Gentlemen, welcome back.

Thanks for joining Let's start with the main provisions that are outlined in this bill.

It would increase the housing supply by mandating that the Department of Housing and Urban Development offer guidance to local communities on how to reform zoning and land use policies that would help reduce barriers to housing development, provide grants and loans to support the development of new housing or the improvement of already existing properties and increasing the limit for public welfare investment for certain banks.

Jeff, to you first.

Do you think these provisions are step in the right direction to fix the housing supply shortage?

Yeah, I mean, I think, you know, one of the key factors of the housing crisis is lack of supply.

I mean, we've tracked The mismatch between supply and demand.

>> Since the Great Recession and development stopped really around 15 years ago as it recovered, supply of housing generally recover in the same way.

On top of that, the type of housing that's needed in terms the changing demographics.

And one out also created a mismatch of spoke supply demand.

So this bill certainly attempts to address that issue.

Rossi over.

Do you think of this legislation?

If an attempt it's being described as one of the aggressive housing bills that we've seen in a long time.

But I think that simply because of the fact that the bar is really low, we haven't really had a federal housing bill here in decades since improvement permanency of the low-income housing tax credit.

So overall.

It is constrained by what the federal government is limited in what it can and can't do with regard to supply and demand and housing at the end of the day, it have to work through the local machinery of zoning building of construction, of labor, of the willingness of neighbors to feed their communities.

Change.

And that is a bit of a fragmented environment from which the federal government is hoping its nudges and the incentives that are in this bill might be able overcome that.

But that is yet to be seen will have to wait and see.

>> So as we know, Chicago itself is in the midst of an affordable and supply crisis.

David, what are the barriers that local developer space when building more housing developments?

>> Yeah, I think major challenge right now is construction costs.

And so if you look at the cost to build a new home, you're talking about, you know, anywhere from 400 to $600,000 a unit.

While the you know, the median home price is 400,000.

And so you've got, as Jeff described, this mismatch between what it cost to build and what you can sell or rent for.

And I think that's why you prices going up, whether it's home prices or rents.

It's a supply and demand issue.

And we just as a city have not been building just a few data points.

If you look at your Congo last year, the city permitted about 4200 units across the entire city of new residential housing this year.

It's expected to be even lower than that.

It will be one.

$3800.

3800 unit range.

Whereas, you know, Wall Street Journal article over the weekend, New York bill, 38,000 units of new Housing last year.

So 4,000 compared to 30 New York City, New York City, correct?

Bill, 38,000 and they're pace to do that again this year.

>> So how does how does the city of Chicago counter Well, I think that I think the city's got to do a number of things.

One it's got a look at the cost to belittle.

Lot of it is regulatory.

When you look at the cost of permits, the cost of >> of hiring zoning attorneys to the cost of labor.

All of those adding to the cost of the home on the home builders estimate that 20% of housing costs are directly related to government regulation.

And so you've got to find ways to strip down that regulation to drive down the cost.

>> Jeff, we know that a large portion, as we've said, lot of the mismatches between supply and demand.

But that hasn't always been the case.

How did we get here?

>> Yeah, I mean, to get you back to the Great Recession, you really saw that crisis effect demand for housing, which collapse because the crisis was really driven by and economic crisis.

Houston housing, you saw the mortgage lenders, the folks who finance housing stop doing that because they were Donatella portfolios.

New side development staff as well because builders also responding to that crisis.

Once the market started to recover on 2012, you saw them and grow.

But you can supply grow with it.

And then the pandemic hit and that continue kind exacerbate that mismatch of supply and demand by new drivers related preferences for people on the live exacerbated by like fighting interest rates and the fight against inflation, which locked in a lot of existing homeowners that prevented regular turnover.

You might see in the housing market.

So so when you add these, you know, these crises out on top of each other in the various government intervention, that you're creating the sort of ongoing crisis where the building and the development supplies really not matching the growing and the change in demand for housing the Chicago nationally.

>> co, you've said that we collectively need to start thinking about housing as a human right versus an asset or a commodity on.

How do we change that thinking and what has what has that thinking done to the market so far?

>> challenger and one of the things that isn't set out loud very often is the fact that people view their shelter is a commodity as an asset.

Therefore, there's an incentive to think about it.

terms of how much is it worth and how much of this is it going to appreciate so for those that already are blessed enough to be able to have a home.

They have a singular focus of seeing the value of that home.

Go up there for the mismatch between supply and demand works in their favor, all of us and they have an appreciating asset.

Irrespective whether or not it creates a problem or teachers of their kids can't afford to live.

There.

Policemen, firemen, are driving to affordability in our 2 hours away from that neighborhood.

So there needs to be a shift in mindset about what it means to actually have a community that thriving think a little bit between the balance of yes your home and is an asset.

Really sort of like holding stock?

No, it's not.

It's much more important than that.

So their their needs to be much more of a community conversation about what's needed in terms of creating a healthy fabric where, yes, you can experience some sort of shelter appreciation but you can't view it as your retirement.

You can't necessarily treat it as the tighter supply is the better for me.

But the worst for everybody else.

That's just not something that we're ready to really have an honest conversation about that can't be addressed through legislation, even though this country has a very long history of trying to legislate moral behavior.

That's really something about values and what we feel we need to do as a member of constructive and productive society, right.

That would require sort of a whole shift up what we call the American dream, right, which is home ownership being able to work to have that home?

>> Ok, let's do a little Median price for a home in Chicago's $375,000.

The income, as we've sort of like the mismatch and what it cost to build versus what it you know, what you can sell it for the income needed to purchase a home of that amount.

Is $95,000 and the median household income in Chicago?

$77,000.

David, what needs to happen to make homeownership attainable for middle income residents?

Yeah, I think it's it's again.

It's a combination of bringing those costs down.

I think certainly the current interest rate environment isn't helping when you've got interest rates of 6, 7%.

>> But I think there also needs to be more creativity around the housing types that were were approaching.

So things like manufactured housing, modular housing.

You know, we don't have the big home builders here in Cook County in the city of Chicago.

These are the people that are building America and there are literally not in our city.

And so we've got to find incentives to get national home builders.

The build its scale that build a pace that we don't have here in Chicago.

So I think it's it's a combination creating a lot more supply when you create more supply, you you you push prices down, whether that's apartments where that's new homes.

But we've got to be committed to to driving more supply.

And then I think when you created models, whether that's relaxing the building code or thinking about different housing types, all that's needed, if we're going to housing become more affordable again.

>> Jeff, if this housing act is going to affect what kind of material changes might we see?

>> I mean, think it'll probably take a while for any anything to really manifest itself in terms of day-to-day affordability because it requires, you know, the bill to be enacted one to the snack that requires local governments to adopt changes to their building, code zoning, et cetera, cars, builders, to actually build stuff.

Those that those house house and hit the market and then in the market to respond.

So realistically.

The timeline for it to actually affect the day-to-day house prices that we see are probably in a few years down the line.

But but theoretically, it is addressing a kind of fundamental and foundational challenge that we need to address.

It is building more housing.

So so big picture.

It's probably worthwhile effort, but it may not be an immediate return.

Also require some patience.

David, you're part of a group called Reclaiming Chicago.

The goal is to build 1000 new homes on the West side, thousands outside in some cases, communities that have not seen that new construction in decades.

>> How significant is it for community like Roseland, for example, to see that development?

Yeah, I think there are 3 kind of key elements here.

One is obviously creating affordable options for local residents.

The second is building that generational wealth with the racial wealth gap.

Can begin to solve some of those issues around equity?

>> And then finally, I would say one of them may be under looked his repopulation.

I mean, a place like Rose and we've lost 60 70,000 people.

We've got to bring back residents if we're going to have quality retail, if we're going to have Colin skills and build that kind of community that feel was talking about.

So we've got we've got to really focus on building new housing around affordability, density generational wealth building for the chicken and the egg thing, right.

Like if you build it, then have people who move into it.

But yeah, that'll help your retail.

It'll help your schools.

Actually, crime goes down when neighborhoods repopulate.

So all of these social issues will not fundamental housing at to that kind of community.

There's been an effort co and some unit municipalities across the U.S.

to build more government housing.

How can people benefit from the government getting involved and housing supply?

>> Well, lot of that have to me.

It's a bit of an indictment of the private market simply not being able to do to solve the problem.

But it's also a bit of an indictment of government itself.

When you insert politics and a housing >> usually good things don't happen.

You may have a good idea.

But at last for a political election cycle and when you think about some of the bests initiatives I've seen around the country envision Utah, which is a 50 year plan that started in the 1990's, Minneapolis 2040, which is equally a longstanding initiative, which has already shown tremendous benefit in terms of development of housing.

What they did was they actually tried to make it.

I'm not sure of this is the right way putting it.

But politician proof so that way somebody knew that comes in as the mayor of the head of that area politically doesn't just discarded out of hand because it belonged to the previous administration of it.

And that idea 5 years ago, it's a good idea.

Now the house and as a result, now what you're seeing that with some of appellate ease that are taking this in the up privately and really building it on their crime.