The Prof G Pod with Scott Galloway
00:35:36 · Scott Galloway
[00:35:36] S1: I appreciate how measured you are. You know, my sense of rent control makes absolutely no fucking sense and does the exact opposite of its intent, what its intended outcome. My rent control story is when I was your age or Kyla's age, even younger, my friend said there's a place, a rent control place, I was living in LA that's just come up for rent in Santa Monica. Let's go fill out an application. We went down and there was a line of about 25 people outside waiting to fill out applications for this rent control house. The person had died. The same people had been in there for like thirty years. You know, they weren't gonna leave. And the broker, whoever was taking applications were like, this is ridiculous. And said, well, you have a good shot. The two of us were going to move in together, me and my friend Lidos, because you're an investment banker and you work in finance. And okay, rent control is meant to help anyone but us. Yeah, right. We were making, I was working at Morgan Stanley. He was working at Great Western. We were there just to arbitrage this weirdness called rent control. And the reason why we might've gotten, we didn't. But the reason why we might've, we had a shot at getting it was because we were quite frankly, these white yuppies that didn't need rent control. It was it was exactly, it was doing exactly what it was not supposed to be doing. And the section eight thing, I hadn't heard that. I think that is actually really interesting. And I'm trying to think everything, nothing's perfect. Right? I was immediately starting to discourage people to not report the full income or are they not as ambitious, but you're gonna, you're right. Anything is gonna have a certain, you know, a certain externality. If there was one program each of you had a magic wand around that you think could help young people or accelerate the, you know, the launch, if you will, as it relates to housing, what would that one program be? Kyla, I'll begin with you.
00:37:38 · Kyla Scanlon, Aziz Sunderji, Scott Galloway
[00:37:38] S2: So I think that if there was one policy, and I'm sort of curious for Aziza's thoughts on this because I think you might disagree, zoning, I think, is a really big issue. Like, there's all sorts of headaches with, sidewalk and just how... Where the house can be, yard size. So I think that really complicates the housing picture, just like where you can build, what you can build. And I just... Whenever I talk to housing experts, like, that's one thing that they always advocate for is we just have to change some zoning laws. We have to change the regulations, and that'll free up a lot of space for builders to build. But Aziz, do you disagree with that? [00:38:15] S3: No. No. No. Not not at all. I don't know why why you think I disagree. [00:38:18] S2: Oh, sorry. Okay. Yeah. [00:38:21] S3: No. I I I am, like, all for changing zoning regulation. I just don't I just don't think it's the only thing. It's the it's the very start of the process. Right? Like, we have to we have to make building legal. Otherwise, you can't build. Right? Like, it seems fairly straightforward, but I just don't think it's enough. It's just not nearly enough. One thing I would I would point out... Can can I can I read you guys something from the New York Times? [00:38:45] S1: Of course.
00:38:46 · Aziz Sunderji
[00:38:46] S3: Okay. Here we go. This is the season... Okay. The the the article is called high rents. This is the season of the year when the people of New York break out in loud complaints about the rise of rents, the scarcity of houses, and the impossibility of making both ends meet while landlords demand such exorbitant rates for their tenements. So that last word might give you a clue about when this is from. This is from 1856. So aside from the word tenements, you could kind of just copy and paste that onto The New York Times today, and it would read pretty accurately. So my point is that this is like... This is a big this is a big crisis. It's happening around the world, especially in these big productive cities where the economic opportunities are, and it's been happening for a long time. So I think we should stay very humble about our ability to influence this. I think if I could choose one thing that is driving it that we don't talk about enough, it's income inequality. You know, the fact is that you have some people, like Scott, as you were working at a bank, and when I moved to New York, was also working at an investment bank. They come to the city and they earn these high salaries, and they're competing with everybody else, teachers and, you know, all kinds of people who don't earn high incomes for the same parcels of land. Housing is a positional good. We're all competing for it. And I think inequality is a huge engine explaining the fact that we've been in a housing crisis around the world and clearly for like hundreds of years. So I... You know, it's... I I don't know if there's any, like, silver bullet for it. I I honestly don't have a good answer to your question, Scott. I think it's it's a whole bunch of different things in tandem. It's it's zoning reform. We have to build out infrastructure so that so that, you know, people can commute from further out in reasonable times. Kids are coming out of school with more debt. A lot of people are, like, completely debt laden. And I I... My worry is that this is all gonna get worse because, Scott, you were talking about how, you know, eventually the people who own these homes will die and pass them on. And maybe it'll be late. Maybe it's when we're all, like, 60. Or when I'm 80 and Kyla's 60. But, you know, when that happens, it's not going to be an even distribution.
00:40:58 · Aziz Sunderji, Scott Galloway, Kyla Scanlon, Scott Galloway
It's not going to be like sprinkled across the population according to need. It's going to engender [00:41:03] S1: exactly It's dynastic wealth. It's going [00:41:05] S2: to make [00:41:05] S1: things worse. [00:41:06] S3: Yeah. It's going to just reinforce the inequality lines that we have already in society. So I I... To be honest, I don't have a good solution, but I think it's gonna require a whole bunch of different approaches. [00:41:17] S1: We'll be right back. [00:41:21] S0: Support for the show comes from Yahoo Scout. All day, every day, we're making decisions. From the big ones, like, should [00:41:26] S1: I move cities? To the [00:41:27] S0: smaller ones, like, where do I get lunch? Sometimes we need a little help. That's where Yahoo Scout comes in. [00:41:32] S1: It's the [00:41:33] S0: new AI powered answer engine that you can confidently turn to for life's questions, both big and small. Yahoo Scout doesn't simply tell you what to do. It gives you reliable information with context and sources so you can make the most informed decisions tailored to your life. So if you're just starting your career, Yahoo Scout can help you research your industry, prepare for interviews, learn how to manage your finances, and more. I've been using Yahoo's personal finance page as my starting page on the Internet. I've started using Yahoo Scout. I find the interface very user friendly and approachable, and I think the answers, quite frankly, are just a little bit cleaner, more organized, and sort of easier to absorb. Start exploring today at scout.com.
00:41:33 · Scott Galloway, Scott Galloway
[00:41:33] S0: new AI powered answer engine that you can confidently turn to for life's questions, both big and small. Yahoo Scout doesn't simply tell you what to do. It gives you reliable information with context and sources so you can make the most informed decisions tailored to your life. So if you're just starting your career, Yahoo Scout can help you research your industry, prepare for interviews, learn how to manage your finances, and more. I've been using Yahoo's personal finance page as my starting page on the Internet. I've started using Yahoo Scout. I find the interface very user friendly and approachable, and I think the answers, quite frankly, are just a little bit cleaner, more organized, and sort of easier to absorb. Start exploring today at scout.com. [00:42:19] S1: We're back with more from Aziz and Kyla. Let's move on to listener q and a. We asked our audience to submit their questions ahead of time on housing. First question, what about home sizes? Wouldn't it be easier just to build more if we built smaller? Kyla, I'll start with you.
00:42:19 · Scott Galloway, Kyla Scanlon
[00:42:19] S1: We're back with more from Aziz and Kyla. Let's move on to listener q and a. We asked our audience to submit their questions ahead of time on housing. First question, what about home sizes? Wouldn't it be easier just to build more if we built smaller? Kyla, I'll start with you. [00:42:35] S2: I mean, we have a lot of issues building starter homes. I think, you know, there's a lot of demand in the market, to Aziz's point about wealth inequality for these gigantic homes. And so you see, like, a lot of big old homes being built, whereas the starter home is is having a little bit of a struggle in terms of being built because to Zees's point also about a builder's rate of return, they make a little bit more money when they build bigger. And so we could certainly build more starter homes, and that's definitely, I think, what the market needs is cheap places for people to start building equity, but the builders' incentives are a bit misaligned to that.