Bloomberg Audio Studios, podcasts, radio news depending home sales here in the US seeing a surprise uptick in February as mortgage rates fell to their lowest since twenty twenty two. It's a good backdrop for the new HGTV show from the Property Brothers Joe and Jonathan Scott. That show is
called Property Brothers Under Pressure. It just premiered on Sunday, and it's a deeper look here, not just into the homes, but really into the home buyers themselves and how they navigate a competitive market and make budget conscious decisions for their new homes. I had a chance to sit down with them exclusively earlier today and talk about the state of the housing market and their journey to HGTV stardom. Take a listen.
Unlike anything we've ever done, because people always ask us, well, what happens when the cameras aren't rolling, what happens behind the scenes. We show it. We show it. You see our crew, you see us disagree, you see moments that the homeowners. You know. I think it's very relatable for everyone out there because there's so much pressure on everybody affordability crisis, like there is across the country here. The stories. We have fourteen episodes and they're all very different stories.
We have families have lost their house from the fires in la We have other families that are trying to pull two families together to live in one house because that's the only way they can afford. We have so many stories that will be very relatable for Americans watching, and we're trying to solve with really tight budgets. We're trying to solve what everybody out here is trying to solve to be able to get a home that they deserve.
We talk about the evolution of HGTV and just these types of programs that choose to be more about the homes themselves, and they are becoming a lot more about the people and what they're going through. And you know, here at Bloomberg, we've talked a lot about the affordability crisis in the housing market, and particularly out West, where
you guys do a lot of your work. I am curious if you've seen any sort of movement and maybe a sort of a future where you have real starter homes, real affordable starter homes for people in some of these markets.
There's definitely been a lot of movement unfortunate. It's in the wrong direction. We have, you know about a four million short house shortage of a healthy inventory right now and the challenges People don't seem to understand that we need affordable housing. Any successful city in the world that has embraced affordable housing, the cities have flourished and the costs have come down. But I love the idea that
people can live where they work. And I think some people here affordable housing, they think, well, that's going to be you know, drugs and crime and everything. Absolutely not. These are teachers and you know, nurses and police, you know, household workers, people who want to live in the same community that they work. And so that's our goals from a messaging standpoint, show people that it's okay, you don't
have to be a nimby. You don't have to stop projects that are being built, you know, in your neighborhood. On the flip side, we've invested in companies like modular Builders, So we're trying to find new technologies that will physically bring down the cost of construction and at the same time a hard time though, because there's a lot of time about rate cuts to help the you know, government trying to stimulate. What the problem is, you have no inventory.
Cut rates if you want, that gets people excited to buy, but there's nothing to buy, you're not really solving the problem. We need to find ways to incentivize make it possible for developers to really focus in. For example, I have
a real estate portfolio in Calgary in Canada. The government in Canada really incentivizes builders to do affordable housing, so it makes it worthwhile and I can keep rolling money from one project to the next to the next to actually make a difference down here, I don't have that same opportunity.
Where do you see potentially where those incentives come from. Obviously, in a city like New York, affordable housing has been a huge topic of conversation. It pretty much swayed our most recent mayoral election. I'm sure out west where you guys in oh guys are, whether it's California, Vegas, Vancouver, they're also seeing similar issues there. Are you seeing things at the state level or the local level that could potentially leave well.
One of the biggest things is I think federally there needs to be better policy that allow and incentivize builders and developers to pull out more cash. So for example, in Canada, if you create a certain amount of affordable housing units within your building that you can finance up to ninety five percent, whereas here not even close. And so a lot of builders are leaving forty percent of their cash in a building and that prevents them from
building forward. Also on the building side, if we're if you're using you know, say you're building a building for easy figures twenty million dollar building, if you do that as an affordable building using public funds for some of that construction, there's all this regulation that all of a sudden, the costs it's about forty percent more just to do
the exact same building. So I think we're getting tied up in you know, the manula, and we're not stepping back and looking at the fact that we haven't seen rapid enough growth to solve the problem when it comes to actually supplying inventory. And it's also adding density. There are different areas that are doing great things, but when you can add some more density, even in California, so for example, my house, I'm allowed to have two suites, I can have two ADUs, which is great because I
could read both those out and it's helping with the crisis. However, the backlog to get to that point one of my ADUs. It should have been approved in a week. I waited five months and there's such a backlog and the process is so archaic. We need to revitalize the process to get people moving to add density. This is one of the things where I'm hoping that AI is actually helpful because the bureaucracy behind trying to win through the planning process.
Anyone who's taken on a renovation knows how annoying it is to wait on your permits, wait for the city, also wait for the utilities to go through and process everything. I would love to see something that automates a lot of that, to make sure that the eyes are getting dotted and the teaser getting crossed. But you can actually get in and do the work. And as I say, this literally is right now in modern history, this is the absolute worst affordable housing market in history for first
time home buyers. First time home buyers are less than twenty five percent of the market right now, and that should be a lot higher. It's just not feasible for people to get into real estate like it used to be.
Obviously, you've had a presence, specifically on HGTV. Now for more than a decade, you've had a lot of iterations of your show and obviously shows that don't actually feature you two. How much does that change in terms of being able to produce a show like that at a reasonable cost, have whatever relationship you have with HGTV, and actually make it profitable.
Yeah, everyone, I mean so, we are one of the largest unscripted producers in North America. We have fifteen series that we produce, we host two of them. But we we have found a huge shift because what we used to have for budgets for our shows down here on AGTV or with other partners, we don't have that anymore. So we as producers have to get more creative, and sometimes that means going to Canada, green lighting with a copro out of Canada and then coming down with a
license or coprowing with the US down here. So we were really good at getting creative. But plus, our company stands out from other production companies because we are up in Toronto for our production base, so we can actually take advantage of a lot of tax incentives up in Canada that are great that a lot of US producers
can't well. And we're also seeing explosive growth in digital and other forms of media, you know, YouTube, everything else, So you know, trying this, We've always stayed a step ahead. We're always looking at where the industry is going right now, television, traditional television. I mean, what's the word imploding? Everything is everyone's uncertain. There's a lot of mergers happening, and so
things around are paused. But that's what I like is the fact that we're constantly looking at so there's enough opera tunity that we can still find placement.
As as some of the mergers, particularly a Warner Brothers being absorbed into Paramount, has that affected at all, maybe your outlook for what HUTV and Discovery ends up being.
Yeah, ammolutely, it's more of a pause. That's what is right now, because nobody wants to jump in a direction if they don't know who's going to own the company or what the focus is going to be. If you look at Netflix, they were only interested in studio science streaming. They weren't interested in linear cable. So Paramount's taking everything. So that does mean that we as were the largest
producer for HTTV for Warner Brothers on the unscripted. Now we'll have that opportunity to do the same with Paramount
Jonathan and Drew Scott there at the property of Brothers on the launch of their new program, but more importantly, an interesting conversation there about housing affordability, particularly in the markets that they're focused on, primarily out West and in Canada.