The Prof G Pod with Scott Galloway
00:16:05 · Scott Galloway
[00:16:05] S1: We'll be right back after a quick break.
00:16:11 · Scott Galloway
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00:17:55 · Scott Galloway
[00:17:55] S1: I wanna try and get to the core of the problem and get your thoughts on where I have it wrong and and whatever nuance you wanna add. But every market has a demand side and a supply side. Let's talk about the supply side. The US completed about 2,100,000 homes, privately owned homes in '73, 1973 when the population was roughly two eleven, so millions, approximately 1% ratio of houses built to population. In 2024, The US completed about 1,600,000 with a population of more than three forty million. If I'm doing my math right, that's about 0.5%. So the ratio of new homes being built to population has been cut in half. Duplexes, triplexes, fourplexes accounted for 7% of new homes in 1979 versus 1.1 in 2025. And then to make things worse, it feels like the programs are all on the demand side, low and trying to keep interest rates artificially low or lower than they should be. First time home buyers tax credit, low income housing tax credit, which puts more money in the home in the pockets of buyers. But without an increase in supply, all that does is take prices up. It feels as if there's just a basic understanding of the economics. And then we cosplay concern with programs that ultimately just take prices up. Your thoughts. I'll start with you, Kala.
00:19:18 · Kyla Scanlon, Scott Galloway
[00:19:18] S2: Yeah. I mean, I think that's... I I interviewed Wally Ediemo a few years ago now, who is the deputy secretary of the treasury in the Biden administration under Janet Yellen. And that was one thing that he really talked about is that it's very hard to do much about supply, so all you really can do is the demand side. So the financing side, that's what a lot of... It's a little simpler to pass policy on mortgage rates and support for first time homebuyers than it is to fix zoning laws, for example. And so I think for a lot of big governments in these cities, you know, they're just looking towards the demand side subsidies. But it... Of course, if there's not enough supply and then everybody has a little bit more money to spend, home prices are gonna go up. [00:20:00] S1: Susan, any thoughts?
00:20:01 · Aziz Sunderji
[00:20:01] S3: Yeah. So it's it's hard to it's hard to boost supply, as Kylie said. If this is not just a US thing, it's hard to boost supply in any big dense city. The conversation in... Especially for the past maybe five years or so has really centered on zoning. The sort of conventional story is that, you know, NIMBYs took over, and they captured local governments, and they're standing in the way of more home building because they don't want, you know, the the value of their homes to fall, and they don't want their neighborhoods to change. And there's definitely a ton of truth in that. I think that that is true, and you're seeing moves to move... To to to shift governance from the local level up to higher levels of government that oversee the broad population and can make decisions that help everybody, not just those in certain neighborhoods that don't wanna change. But what I think is kind of lost in in that conversation is that there are all kinds of reasons it's hard to build, and it's it's not just zoning regulation. You know, like in New York City, this is a very, very dense place. We have a lot of regulation. Some of that is because they don't want places to change. I live on the Upper West Side in a in a in a big building. The rent's too high. People don't want that that neighborhood to change. A lot of it is landmarked. So that's that's part of the issue. But the other one is that this is just a very, very dense place. And, yeah, for example, if you look at permitting times, how long does it take to get a permit through to to build an apartment building? It correlates very closely with density because it's very tough to build in a dense spot. You have to... You know, here in in in Manhattan, there's almost no vacant land. If you're building a new building, you're knocking down the existing building, which is very expensive. And then you're gonna build high, presumably higher than the the building you're knocking down. It's very expensive to build high. Like, a a 12 story building costs, like, 40% more on a price per square foot basis than a three story building. And then there's the thick enough regulations, some of which are NIMBYism and some of which are just the regulations that you need in a big dense place. So, yeah, I mean, to your question, Scott, I think supply is where we should be focusing.
00:22:11 · Aziz Sunderji, Kyla Scanlon
It's a really tough thing to address, but I I think we need to take it on not just through zoning, but also other measures that can help builders build homes more cheaply. [00:22:21] S2: So, Aziz, I was at a housing conference in New Hampshire, and I was talking about housing. Right? And somebody came up to me, and he was a local builder, and he was like, it's the sewage systems. Like, we just don't... If we build more houses, the sewage is gonna explode out of the pipes. And so I'm curious how you think about the underlying infrastructure of the cities too. Like, are we even able to support more build out with the public services?