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- [00:01]
Ben Keyes
This message comes from Lagavulin single malt Scotch Whiskey.
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Tanya Mosley
Wherever your curiosity takes you, there will.
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Ben Keyes
Always be more to uncover and savor. Discover new flavor notes beyond the smoke.
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Tanya Mosley
Lagavulin.
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Ben Keyes
Please drink responsibly.
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Tanya Mosley
Diageo New York, New York. This is FRESH AIR. I'm Tanya Moseley. As we head into 2025, housing is still one of the most important issues on the minds of millions of Americans. The dream of owning or even renting a place is in peril. People are paying $1 million for starter homes. New construction is moving at a snail's pace. And the latest data shows that in 2023, home sales were the slowest in three decades. Many homeowners aren't selling or upgrading because the market for getting into another house is just too high. Renters aren't catching a break either. On average, they're spending 30% of their income on housing. And that stat includes people who live in places that had the reputation of being more affordable, like the Midwest and the South. Changes to our climate are also redrawing real estate maps, impacting where people can live and what they can afford. President Elect Donald Trump says some of his plans to tackle the crisis include regulations on construction, opening up federal land for housing and mass deportation. How feasible are these ideas? And why is this such a dire moment in the housing crisis? Well, our guest today to talk about all of this is Ben Keyes. He's the Rowan Family foundation professor of real estate and finance at the University of Pennsylvania's Wharton School. He is also a research associate at the National Bureau of Economic Research. And, Ben Keys, welcome to FRESH air.
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Ben Keyes
Yeah, thanks so much for having me.
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Tanya Mosley
You know, Ben, one of the more frustrating issues right now is that there just isn't enough affordable housing. And from my understanding, like so much of this current housing crisis, this can be traced back to the financial crisis of 2008. It's like a snowball effect.
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Ben Keyes
That's right. I mean, I think we can characterize the current state of the housing market as being deeply unaffordable. It's a very expensive market right now. High home prices and high interest rates making, you know, entering the housing market or moving up the property ladder very challenging. And I think you can trace back some of these issues back to the financial crisis of 2008, where we saw a collapse in construction. And so we just stopped building houses. We stopped building apartments for a few years there and an even longer, I would say, structural change in our ability to build and our willingness to build. And so those Two factors have really driven a shortage of housing, and now we're seeing estimates of as much as 4 million houses that were short. If you think about where we need to be as a grow population and growing household formation, can you delve a.
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Tanya Mosley
Little bit deeper into that? Because why, 17 years later, if demand is high, people are working, they're looking for places to live. What are some of the factors that continue to keep home builders from just building more housing?
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Ben Keyes
It is a bit of a puzzle, right? I think we can separate out the factors into three main areas. One is the high cost of materials and labor. And we've seen an inflationary episode where we have a very high cost of building materials. We are also in a very tight labor market, so there are not a lot of laborers who are available to build. So that's one category. Another category is related to financing. It is very challenging to finance many of these large building projects, and it's not always as easy as it might seem to obtain financing, especially multifamily financing. So building apartment buildings, the financing there is quite challenging. And then the third is related to zoning and land use restrictions and other policies that create a lot of hoops to jump through and make it challenging for developers who would like to build at the scale where they would like to build. And so each of those three factors, financing, construction, and zoning, are all putting downward pressure on the ability to create more houses and more housing units where people would like to live.
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Tanya Mosley
You know, President Elect Trump, he's been talking about some of the ways he plans to help remedy this crisis, and one of them is proposing tariffs on imports, which include construction materials. How could that impact housing costs as it relates, I guess, to the price of building materials?
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Ben Keyes
Yeah, well, I think this ties back to one of the fundamental misunderstandings of how tariffs work. But basically, if we're going to r the costs of construction materials, that's going to raise the cost of building a home. Now, a lot of the materials that are used for construction are domestic, so we do have a lot of those in the U.S. but we also import a number of construction materials, like lumber for things that would be covered under NAFTA from Canada. But the simple math is that if we are going to impose additional tariffs on building materials, it's going to be more expensive to build rather than less expensive to build. So that's going to only make the affordability problem worse.
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Tanya Mosley
Ben, one of the more controversial ideas that Trump has spoken about is how he plans to deport 11 million or so undocumented immigrants and how that will free up housing. Is there a link between the undocumented and housing affordability besides it being a numbers game?
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Ben Keyes
Well, first, I think the impact of a policy like that would have impacts that are so devastating to many communities in the country that the effects on housing affordability feels second order or even third order. But I don't think that there is a strong connection between this idea of removing immigrants from our country and making housing more affordable. And there's a couple of reasons for this. One is that immigrants and undocumented immigrants make up a large fraction of the construction workforce. So it's been estimated by Pew that 14% of the construction workforce are undocumented immigrants. And so it is going to make labor costs more expensive to build, and that's going to drive up the cost of housing. The trade off there, from a housing market standpoint, we're talking about this in a very narrow sense, is that there will be fewer people in this sort of numbers game of supply and demand. But if we think about the types of housing that immigrants and undocumented immigrants tend to locate in, they tend to be renters and they tend to locate in low income neighborhoods. Now, of course, that's not uniformly true, but that's where they are concentrated. And so if we're thinking about the high cost of homeownership, removing undocumented immigrants from the pool of potential home buyers is simply not going to move the needle on affordability. As we're thinking about the big picture, you know, this incoming administration has sort of framed tariffs and removing immigrants as a panacea for all of our problems. And neither of those things are going to make a dent into our housing affordability crisis.
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Tanya Mosley
One of the other things that President Elect Trump has talked about is opening swaths of federal land for large scale housing construction. And he's calling these areas freedom cities. The Biden administration was doing sort of an impact or research study on this. And Kamala Harris also talked about this as well in generalities. So I just want to get to the bottom of like, is there some value there in looking at federal land as a potential solution? Maybe not in the way of building new cities on federal land, but is there a way to use that land to help offset some of the challenges that we're seeing?
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Ben Keyes
So I think there's two pieces where we might see some headway. One is related to federal land that's in urban areas. That's already where the jobs are and where we already have high demand. So one example of this is an assessment that The Biden administration did with the U.S. postal Service. And looking at the location of post offices, whether there's additional space for redeveloping some of those spaces. Right. Why have a one story post office when you could have a five story post office with four stories of apartment units up above? And so that's been an initiative that's going on. There is federal land in cities. There are a number of federal buildings and the USPS is one that has quite a large footprint. When we're thinking about this federal land out west, I'm pretty skeptical that we're going to see cities spring up out of whole cloth. That just takes an enormous amount of coordination and effort and it would need a significant amount of private buy in to, to locate firms there. You could potentially see those having some uses for energy generation. So solar farms, wind farms, other kinds of things that do require that space and where there may be more desirability out west. And so thinking about ways to encourage our energy transition on that federal land seems promising. But as a solution to our affordability crisis, I just don't see it.
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Tanya Mosley
Well, that's so interesting about the post office. The post office idea.
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Ben Keyes
Yeah, it's a fun, it's a fun one. And I think, you know, the nice thing about that is, you know, when you start walking around cities, when you put on your housing hat and you think about where could more people live, you start to see opportunities everywhere. You see buildings that are, that are small for their space. You see areas with big side yards. You see old office buildings that could be converted to residential. And so when you put those glasses on of how do we reach housing abundance in these places where the jobs are located, you start to see opportunities everywhere.
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Tanya Mosley
I know, I now can't unsee it. As you were talking about the post office, I started going through my neighborhood and thinking about all of the other areas where there could be housing.
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Ben Keyes
Yeah, there's a, there's a neat example of this. It's not housing necessarily, but there's a, in West Philly, near Penn's campus there, there's a McDonald's on the corner and, and they basically tore down the McDonald's. That was a one story traditional McDonald's with the usual McDonald's roof and everything. Difficult to put apartments or additional use up above that. Well, they tore that McDonald's down and now there's a building there with McDonald's on the first floor. And so the McDonald's has returned. The retail is still present, but now we're using the space above the McDonald's more efficiently. And those are the kinds of smart opportunities that we're going to need to see happen at a scale we haven't operated at in decades.
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Tanya Mosley
Is there an example elsewhere in the world where they've been successful in building density? It changes, really our perception of the American dream to live in high density areas. You know, that no longer is the big story house with the front yard and the backyard and all of that in the driveway, but it is what you're talking about. Sounds like something I might see in Japan, for instance.
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Ben Keyes
Yeah, you hit the nail on the head. Certainly we've seen this kind of development in a place like Tokyo, which has kept housing relatively affordable by building intensively in the city. And that has required a forcefulness that we are not comfortable with in the US in many cases, when it comes to having community oversight over what gets built, a zoning code that requires a lot of hoops to jump through. And so there are a number of ways in which a city like Tokyo has cut the red tape and recognize that some historic buildings can coexist next to large apartment towers. And so I think that's maybe an extreme example where the pendulum has swung in the direction of development. But we just need to loosen the gears. And so looking to a city like Tokyo as an example is potentially a promising one.
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Tanya Mosley
I want to talk a little bit more about some of the things that President Elect Trump has said he will do to help help offset some of the challenges we're seeing in the housing markets. And one of the things he says he will do is to bring down mortgage rates to make home buying more affordable. We know the President doesn't set mortgage rates or interest rates, but we do know that his policies can affect the rates. And I'm just wondering from you, what do you think he could do to influence mortgage rates?
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Ben Keyes
Well, we know that the President can affect mortgage rates, but I'm not sure that he knows that the President can affect mortgage rates. This is something that is very challenging for the executive office to influence. Mortgage rates are set usually off of the 10 year treasury rate. And the 10 year treasury rate is determined by the bond market. It's determined by the willingness of long term bondholders to demand a certain return in exchange for the bond. Part of the reason that we're seeing high mortgage rates is a high 10 year treasury rate. And that's because those bond investors are anticipating inflation. They're anticipating that this new administration is going to keep the Tax Cuts and Jobs act in place. That's going to continue to worsen our federal deficit, that there's probably more and bigger tax cuts on the horizon and that the tariff policies that have been proposed would likely be inflationary. And so, you know, it's largely inflation expectations over a longer time horizon that are driving that 10 year treasury rate and ultimately driving the mortgage rate. And so because mortgages are these very long duration products, the President has very little scope for directly influencing mortgage rates. And when we think about the policies that they could implement, keeping inflation down and having a very disciplined fiscal policy is probably the main thing that they could do directly.
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Tanya Mosley
I'm just curious because I know that you study the impacts of climate change, how climate change is attributing to the rise in costs for homeowners.
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Ben Keyes
I think there's a very direct line to be drawn between rising climate risks and the costs of home ownership in the form of property insurance. And property insurance to me is the most direct way where we're seeing, you know, the effects of climate change on Americans pocketbooks. And in just the last three years, 2020 to 2023, my research with Phil Mulder has shown that property insurance has gone up BY over over 33% on average in the US and over 50% in the areas of the country most exposed to climate risk. And so property insurance over 50% in the riskiest zip codes. And that's, you know, the places that you might, that might come to mind are places like Florida and the Gulf coast, wildfire zones in California, but also some surprises like parts of Oklahoma where they're hit with a lot of hailstorms and tornadoes. And there we've seen big run ups in property insurance costs. And so what this has done is it's made the sort of predictability of home ownership a little bit less predictable. Usually when you think of buying a house, you say, well, I'm kind of locking in my costs, I'm taking on a fixed rate mortgage and I have a predictable path of my expenses. And what's happening in property insurance markets is unraveling that. And we're seeing these big increases. And I worry a lot for homeowners who had bought on a fixed income or were sort of constrained in how much they could afford. And now they're seeing their insurance costs rise sharply. And so this is a reflection of climate change and our changing climate, which is inducing more frequent and more severe disasters. But it's also a function of mobility patterns. And where we've moved in this country over the last really 50 years, we've been moving into the danger Zones we've been moving into harm's way. The population of Florida has quadrupled since 1970. And when you look at the reports of the insurers and then the reinsurers, which is the industry that insures the insurance companies, they point especially to the larger concentration of residents in risky areas as being the main contributor to rising insurance premiums.
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Tanya Mosley
What could municipalities and states do to offset that? I mean, I'm just thinking about zoning issues and things like that that could help stave off that increase in people moving into places that are these danger zones.
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Ben Keyes
Yeah, I think this is one of the challenges where the incentives are especially misaligned. Local governments generally want to have more of a tax base. They want to see more properties in their municipality and that means that they are willing to allow development on swamps and marshes and other sorts of risky areas. You see the development into the. Into the wildfire risky areas. So, you know, I think that there's some misaligned incentives at a municipal level. What you then have at the state level is potentially more room for some discipline there to impose tighter rules and restrictions. But at the end of the day, we're operating in a world of a housing shortage. And so anything that we do to raise housing costs is going to be unpopular. And restricting the areas where people can build and increasing the material quality that they're going to use is going to raise those costs even further. And so that's the tension that we're facing right now in the context of the housing shortage makes all these issues quite tricky. There's one bright spot on making these climate related adaptations that I think is going to be a model for a lot of places. And this is Alabama's effort to fortify the roofs in hurricane exposed parts of the state. There's been a large program in Alabama to provide grants at the state level and a recognition that doing this ex ante is far cheaper than replacing all of these roofs ex post. And so providing grants to help homeowners afford upgrading the quality of their roofs, it's been supported by the insurance industry. They offer discounts on the insurance premiums thereafter if you've gone through this fortification process. And so I think there's a number of these pilot programs which are still for the most part quite small, but are quite successful. And I think we're going to see more of these play out across the country. Insurance markets are regulated at the state level and so that sort of creates those 50 different laboratories that we hear so much about for, for different states to be able to try out new and different things.
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Tanya Mosley
Our guest today is housing expert Ben Keyes. We'll continue our conversation after a short break. I'm Tanya Mosley and this is FRESH air.
- [20:22]
Eric Glass
This message comes from Capital One offering commercial solutions you can bank on. Now more than ever, your business faces unique challenges and opportunities. That's why Capital One offers a comprehensive suite of financial services, all tailored to your short and long term goals, backed by the strength and stability of a top 10 commercial bank. Their dedicated experts work with you to build lasting success. Explore the possibilities@capitalone.com commercial a member FDIC. This message comes from Carvana. Whether you need weeks to research the perfect car or know exactly what you want, Carvana makes car buying easy. Choose from Carvana's massive inventory using customizable search tools. However you buy, buy your car with Carvana. This is Eric Glass on this American Life. We specialize in compelling stories from everyday life.
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Ben Keyes
I was like, wow, you've literally just died and came back and the first.
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Eric Glass
Thing you asked is do you need any money? Real life stories, really good ones in your podcast feed this American Life.
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Tanya Mosley
I want to talk a little bit more about some of the challenges with housing. I think that we all have either heard the stories or seen firsthand the increase in homelessness. One of the interesting things we saw in November is that several states voted on housing affordability measures and many of them passed. For instance, Los Angeles and Denver passed an increase in sales tax to cover affordable housing and to help reduce homelessness. I mean, homelessness in general is it feels like such an intractable issue even before the housing crisis. And so I'm wondering from you, are these types of measures, of course, they feel like a step in the right direction. But what are your thoughts about them having true impact?
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Ben Keyes
I think some of these will have true impact. I think they are big enough potentially to create enough units to make housing first be a major element of a reduction in homelessness. And certainly, you know, the Biden administration has tried to align efforts at a number of different levels. One of the challenges with homelessness is that it is ultimately a very local problem because people are mobile. And so, you know, they're going to move around to locations where they're going to find a better quality of life. And what form that takes for those on the streets might be quite different. But this is one of the challenges. Why you need state and federal coordination. You can't simply have programs that are a one off program in one city. And so seeing things that are more broad based is an important element of this, I think it fits into a broader network of support that needs to be provided, whether that's drug treatment, whether that's mental illness help, whether that's just related to food insecurity and job training and other needs. But in terms of what we've seen in the homelessness space, housing comes first. And solving that problem first seems to be the way in which better solutions follow.
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Tanya Mosley
You've mentioned how Minneapolis is a place that has reduced zoning and building barriers and prices have kind of like slow there. It hasn't risen as fast as other places. And I actually looked it up and found that the vacancy rate There is about 4%, which is the lowest of any major US city. What are they getting? Right?
- [24:08]
Ben Keyes
Yeah. Minneapolis reacted responsibly to a local housing crisis. They were seeing this lack of affordability and a lack of units, and they took meaningful steps to make it easier to build in the city of Minneapolis. And I think this is something that is going to be used as a model around the country. We're hearing from a number of cities that they're looking into this in much more detail. Again, this isn't about building skyscrapers on every corner. It's about sensible densification, especially around transit, where we can reduce dependence on cars. And so this is relaxing single family zoning and lot sizes, so allowing for things like duplexes or four unit, very small multifamily developments. This is related to parking requirements and some of the other things that might be required in a. In an apartment building that take up a lot of additional space where units would otherwise be useful. So there's a number of things along those lines that I think when combined with transit oriented development. So developing near where public transit is available can greatly relax some of these affordability constraints. And we've seen this play out in Minneapolis already. And it's an early stage because building takes time. Acquiring land, acquiring financing, and actually getting the buildings built is very time consuming. And so I think we're still in the very early days of measuring the consequences in a city like Minneapolis. But thus far, we've seen prices grow more slowly in Minneapolis than in many other cities. And I think that that is something that we should keep a close eye on and potentially think of those steps as a model for other local governments who say, we want to do something about this that isn't necessarily drastic. It's not going to change the fabric of our city or the culture of our city, but it's going to allow more development to happen, bring more people into our cities. And allow them to afford living there so that they're not simply fleeing to less expensive markets.
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Tanya Mosley
How much does NIMBYism, you know, not in my backyard, factor into the potential changes of zoning in these communities that could build density in this way?
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Ben Keyes
It's huge. It's huge. I think we see a lot of people who move into a neighborhood and then refuse to think about how their house was built. So at some point, your home was built in that neighborhood. And it's sort of this idea that, well, the current number of houses in our community is the exact right number, even as our nation's population grows and grows. And so I think there's a tension there now. Some of the concerns and complaints are quite valid. When we think about traffic, when we think about congestion, when we think about scarce numbers of seats in the local public school, those are all reasonable concerns, but they're solvable problems. When you look at the NIMBYism movement, one of the challenges is related to who has voice in our communities. And when you look at the zoning meetings where these proposals are discussed, they're often held early in the evening on a weeknight when people with young families can't necessarily attend, and when the only attendees are those who currently live in the community, not those who would benefit by moving into the community. And so there's a real tension there. And I think we've seen over the last few years a softening of those positions, a recognition that it's not just about my house, but about my children's houses and my grandchildren's houses and where they're going to live. We're seeing these initiatives in a number of different cities, and even states passing, that is, are seeking to override some of the strongest NIMBYIST urges. And you can see where they're coming from. But in the long run, that type of position just isn't tenable as a nation if we are going to address the affordability crisis.
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Tanya Mosley
You mentioned Alabama and Minneapolis as a city that are bright spots. Are there other examples of community housing experiments or new approaches that. That have worked well?
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Ben Keyes
We have to be excited about what's happening in New York City, which just recently is dedicating itself to adding 500,000 units over the next 10 years. It's an incredibly ambitious goal. New York hasn't built like that since the 1960s, but in many ways, that's what we need. We need a return to a period where people are comfortable with the messiness of construction happening around them as we find ways to accommodate so many missing housing units. So I'm excited about that plan. I want to see it move forward into some more specifics. But I think there is a renewed support for development, and this is growing out of a movement, a recognition that is a long time coming. And so I think where we see some bright spots is the fact that, you know, city governments that are in many cases the critical choke point for development, looking for ways to cut red tape to improve their zoning code to make life simpler for developers and ultimately get units built. And so I'm excited to see what happens in New York, and that will be a test case going forward if they can hit that ambitious target.
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Tanya Mosley
Our guest today is housing expert Ben Keyes. We'll continue our conversation after a short break. I'm Tanya Mosley, and this is FRESH AIR. From the online trends that dominated 2024.
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Eric Glass
On the spectrum of brat to demure.
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Ben Keyes
Where are you right now?
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Tanya Mosley
To spicy TikTok viral reads, these romance fantasy books about dragons. NPR kept you up to speed on pop culture all year long. Give back to the news source that just hits different by donating today@donate.NPR.org and thank you. Hi, I'm Laurel Wamsley, and I cover personal finance for npr. That means I report on some of the questions that might keep you or your loved ones at night, like, will I ever be able to buy a home? What about retirement? As interest rates drop, where should I put my money? Economic headlines can be confusing, but NPR is here to help you make sense of them. To support this coverage, please give today@donate.NPR.org hi, it's Marielle Segarra from Life. Kid. There's a first time for everything, including giving to npr. Whether you're a brand new listener or a longtime fan, please join the community of NPR Network supporters today. Make your gift@donate.NPR.org and thank you. You know, there's been lots of reporting lately about what's being called the Silver tsunami, that those 55 and older with no children and have these houses with like extra bedrooms could eventually flood the housing market with their homes and help make homes more affordable. What does the data say, though, on that making a meaningful impact over the coming years, especially in some of the more expensive markets?
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Ben Keyes
Yeah, the Silver Tsunami sort of sounds like a low budget marvel superhero. I think the generally in the housing market, things move quite slowly. And so what we're talking about is a generation essentially turning over its housing to the next generation. And that's unlikely to cause a flood of housing or or some dramatic glut of Housing. I think ultimately it comes back to the question of are the houses near where the jobs are? And if the houses are near where the jobs are, then that can be very desirable and would be something that would relax some of the pressure on these high cost markets. But when you look into the data, and Zillow had a nice report on this recently, a lot of those mismatched houses where you have older homeowners with a lot of extra bedrooms, a lot of those are located in, in some of the Rust Belt cities, your Detroits and your Buffaloes and cities like that. And so that's not necessarily where the jobs are being created. And so what you need to find is that kind of alignment. I think there's also sort of a taste alignment that, you know, we'll see how that plays out. If younger generations are interested in the same McMansions in the suburbs and the exurbs, or if, you know, now that they've spent more time living in denser environments because they can't afford to move into the suburbs, whether they're now looking for those town home row home experiences. And so I think there may be a question there about tastes as well. So I think it is going to be a very gradual process. I don't expect anything like a tsunami. I think it's going to be a much more gradual process where homes will be passed down over time. The other thing that happens when homeowners age in place is they tend to cut back on the upgrades and the repairs to the house. Usually much older homeowners are not the ones who are upgrading the kitchens and renovating the spaces. And so, so there's often some large fixed costs that are necessary to bring those properties up to the level of the neighborhood. And so I think that's one more way in which this isn't going to be an immediate solution. That said, there are a lot of people who will ultimately move into those homes. And so there's going to be a process where we'll see that generation turn over their home ownership stake to a younger generation and that is going to create opportunities, communities.
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Tanya Mosley
I'm really interested in something you mentioned about the Rust Belt and the situation there in Detroit in particular. We know like 10, 15, 20 years ago, I can't believe it's been that long. But you know, there were all those stories about, oh, you can buy a home for $10,000, 15, $20,000, even families saying, we'll pass down our homes to you. But as you said, if there aren't jobs there, that will Bring people to those areas that may not have as big of an impact. There were also those stories that, like, rumors that Chinese investors were coming in and buying blocks and blocks of homes because they were 10, $15,000. I'm wondering what's the reality of a place like that today? That Detroit has now seen a resurgence. There's growth there. The cost of housing is now rising and almost at pace with some other areas. What are you seeing in a place like Detroit?
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Ben Keyes
I think you've captured it well. Detroit's a city that was declining for basically 50 years, a really prolonged period of losing population. And that's very challenging for the built environment. You have a street grid, you have houses built that are not able to be moved. And so as the population of a community shrinks, you are then faced with. With all of the challenges of urban decline, where you're trying to right size the city, right size, the services that are provided, which schools should stay open, all these kinds of challenges. And, you know, in that case, the housing market adjusts at the speed of depreciation. It adjusted the speed at which these properties ultimately lose their value and reach that kind of floor of, you know, please take this property off of our hands. At this point, we are seeing some of these upticks, as you're describing, in rent growth. We're seeing a resurgence in a number of different ways. We're seeing jobs returning to Detroit in certain ways at the same time. The land bank in Detroit, so the city government owns about 20% of all of the parcels in the city of Detroit. And so what that means is, you know, they're taking these parcels off the market, and at some point there will be opportunities to redeploy those parcels for sale and for development. You alluded to the sort of investor strategy in a place like Detroit that would have been a very poor strategy for a very long time, as you had to wait decades in many cases for some of these neighborhoods to turn around. And some neighborhoods still have not turned around or are now much depopulated relatives to where they were before. And so as an investment strategy, you're really looking for that type of upswing where you're buying low and selling high. And I think then there are going to be those targets of opportunity where you have neighborhoods that sort of meet that profile, where there's potentially some job growth there. Potentially you're near a good school district or near public transportation that's going to get you where you want to go. So I think that's where those opportunities come up and that's usually a sign of. Of a community where there's at least the potential for some upswing.
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Tanya Mosley
You know, I thought it was really interesting when my producer Monique asked you for bright spots, one of the things you said was the market is very bright for boomers who bought a long time ago and have built tremendous wealth through the market. I mean, that doesn't feel very bright for millennials or really anyone else.
- [36:59]
Ben Keyes
No, it doesn't. But if we take a step back and we think about the state of the housing market, in a sense, we've traded stability for a lack of affordability. And so what we've done in the housing market by under building housing, we've kept supply scarce, and that's increased housing values. We've also, during the recent Covid period, kept people in their homes. We avoided having the foreclosure crisis that we went through during the global financial crisis. And in doing so, what we've done is we've allowed a great deal of home equity to build up for the baby boomer generation. For older homeowners who own their homes, many of them own their homes outright with no mortgage attached. And just looking at the numbers, there's an enormous amount of housing wealth that we've built up in the US we have about $35 trillion in home equity in the United States, and that is disproportionately held by older homeowners who have owned the homes a much longer period of time. And so for those groups, the house represents, in many cases, their largest asset. And that is a great success story for those generations. And it's provided a great deal of economic stability for older families, but it comes at a price, and it comes at the price of affordability and access for the younger generations.
- [38:22]
Tanya Mosley
What advice would you give for those who are debating whether they should buy a home right now or just wait and see?
- [38:29]
Ben Keyes
So first, do your homework and figure out the cost of housing in the market that you're looking in, both for owning and for renting. I think it makes a lot of sense to continue to rent in markets where prices are high and interest rates are high. In many cases right now, you'd be better off putting your savings into something that's delivering a safe, predictable return that might be more safe and predictable than returns on housing. So from an investment standpoint, investing elsewhere is very sensible. And then I think as you're approaching the decision to buy a house, think long term, because there are large fixed costs to buying a house in terms of transaction taxes, in terms of broker fees, title insurance and other costs that need to be rolled into that cost. When you're doing an apples to apples comparison, the right comparison isn't just comparing the mortgage payment to the monthly rent. And then on top of that, there's a challenge with rising insurance costs and property taxes. And so you need to take a view on can I afford the property insurance, flood insurance, wind insurance, other supplemental insurance policies in a few years when those may be more expensive than they are today. So I think it takes a more careful budgeting approach than we've seen in the past. And in and in many of those cases, my sense is that that's going to come out on the rental side of the ledger rather than owning, given our current affordability crisis.
- [40:05]
Tanya Mosley
Ben Keys, thank you so much for this conversation.
- [40:08]
Ben Keyes
Well, thanks so much for having me.
- [40:10]
Tanya Mosley
Ben Keys is a professor of real estate and finance at the University of Pennsylvania's Wharton School. Coming up, film critic Justin Chang reviews the Seed of the Sacred Fig, the latest drama from Iranian filmmaker Mohammed Rasulov, which premiered this year at the Cannes Film Festival, where it won the special jury prize. This is FRESH air.
- [40:31]
Eric Glass
Ho, ho, ho. Santa here coming to you from the North Pole, where the elves in our podcast division have just completed work on this season's best gift for public radio lovers, NPR give the gift of sponsored free listening and even bonus episodes from from your favorite NPR podcasts, all while supporting public media. Learn more at plus.NPR.org.
- [40:56]
Ben Keyes
Consider this is a daily news podcast, and lately the news is about a big question. How much can one guy change? They want change. What would change look like for energy?
- [41:06]
Eric Glass
Drill baby, drill schools.
- [41:08]
Ben Keyes
Take the Department of Education, close it.
- [41:10]
Eric Glass
Health care better and less expensive.
- [41:12]
Ben Keyes
Follow coverage of a changing country.
- [41:14]
Tanya Mosley
Promises made, promises kept. We're going to keep our promises on.
- [41:17]
Ben Keyes
Consider this the afternoon news podcast from npr.
- [41:20]
Tanya Mosley
Evergreen trees are Pacific Northwest icons in journalism. An evergreen story isn't tied to one news cycle. It goes deep and helps you understand the world. The Evergreen is also a podcast from OPB about the Northwest. I'm Jen Chavez. Listen to the Evergreen Podcast from OPB every Monday, part of the NPR Network. Earlier this year, Iranian descendant filmmaker Mohammad Rasoulaf fled his country to escape an eight year prison sentence. He made it to the Cannes Film Festival just in time for the premiere of his latest drama, the Seed of the Sacred Fig, which was filmed secretly in Iran. The movie won a special jury prize at the festival and was submitted for the Oscar for best international feature by Germany, where Rosaloff now resides. Our film critic Justin Chang has this review.
- [42:12]
Eric Glass
In the nearly 20 years that I've been attending the Cannes Film Festival, I've rarely witnessed anything as emotional as I did last May when the Iranian director Mohammad Rasulov arrived for the world premiere screening of his new movie the Seed of the Sacred Fig. As he walked up the red carpeted steps and entered the theater to thunderous applause, Rasulov didn't look like a man who had been on the run just two weeks earlier. He fled his country after receiving an eight year prison sentence, hardly the first time he's run afoul of the government which since 2010 has frequently arrested him, jailed him and banned him from filmmaking. Like some of his other movies, the Seed of the Sacred Fig was shot entirely in secret. Secret that can't have been easy to pull off, though in some ways it makes a certain sense for a drama that's all about the corrosive nature of secrets and lies. Misog Zahre plays a lawyer named Iman who's just been promoted to investigating judge, a job so dangerous that he's been issued a gun for his protection. His wife Najme, played by Sohelogholestani, is excited about the news. With Iman's higher salary, they can at last afford a bigger home. But they warn their two daughters, 21 year old Rezvon and teenage Sana, that they must be irreproachable in their behavior so as not to harm their father's reputation. That means wearing the hijab in public, keeping a low profile on social media and not hanging out with the wrong people. But Rezvant and Sanat are both smart, observant and increasingly critical of their parents traditionalism, especially in light of the news. The story takes place in 2022 during the early days of the Woman Life Freedom movement. Those protests erupted after a 22 year old Kurdish Iranian woman died in the custody of the morality police which had arrested her for allegedly wearing a hijab improperly. Razulov includes real life footage of the protests and ensuing acts of police violence, giving the movie a jolt of documentary immediacy. But he also shows us how Iran's social unrest impacts the family directly. When one of her friends is injured at a rally, Rezvon becomes increasingly supportive of the movement, to her parents chagrin. But even Iman has his doubts about the government he serves. He's demoralized by his new job, which forces him to interrogate and likely imprison hundreds of protesters. Rasolv has never been shy about calling out Iran's authoritarian regime as he did in earlier movies like Manuscripts Don't Burn and There Is no Evil. What makes the Seed of the Sacred Fig so gripping over its nearly 3 hour running time is how assuredly it blends domestic drama and topical thriller, the personal and the political. The family home becomes a psychological war zone where secrets fester behind closed doors and every character has something to hide. The actors are uniformly superb. I especially liked the nuanced sibling dynamic between Masa Rostami as the sensitive, thoughtful older sister and Cettare Maliki as the slyer, more mischievous younger one. Rasulov's sympathies are clearly with them and the Woman Life freedom protesters, but he also extends compassion to the parents, especially Iman, who, as Rezvan courageously points out, is too entrenched in the system to see that the system is wrong. Just as the family's home is starting to feel unbearably claustrophobic, the movie shifts gears. There's a sudden change in scenery and after the slow, simmering suspense of the first half, Razulov pushes the drama into full blown action movie territory. There's a high speed car chase, an on camera interrogation, and finally a tense climax that suggests a showdown out of a classic Western. It's a bold stroke and while not everyone will make the leap, I appreciate Rasulov's willingness to flex his genre muscles in service of a larger point. The family in this story isn't just a family. It's a kind of microcosm of middle class Iranian society with deep rifts between people across genders and generations. Meaningful change may be possible, Rasulov seems to be saying, but it will be inevitably painful and violent. It's a bleak conclusion, but it's also suffused with a deep sense of mourning. Mohammed Rasulov may have left Iran, but not once during this stunning movie is his love for his country ever in doubt.
- [47:19]
Tanya Mosley
Justin Chang is a film critic for the New Yorker. He reviewed the Seed of the Sacred Fig tomorrow on Fresh Air, Stephen Colbert and Evie McGee Colbert. They're partners in marriage and in their production company and she makes regular appearances on his late night show. They've written a new cookbook together called does this Taste Funny? They'll talk about food coming close to death, mid show, meeting the Pope and more. I hope you'll join us to keep up with what's on the show and get highlights of our interviews. Follow us on Instagram at NPRFreshAir. Fresh Air's executive producer is Danny Miller. Our technical director and engineer is Audrey Bentham Our interviews and reviews are produced and edited by Phyllis Myers, Ann Marie Baldonado, Sam Brigger, Lauren Krenzel, Teresa Madden, Monique Nazareth, Faya Chaloner, Susan Nakundi and Anna Bauman. Our digital media producer is Molly CV Nesper. Roberta Shorak directs the show with Terry Gross. I'm Tonya Mosley.
- [48:41]
Eric Glass
This message comes from Capital One. Your business faces unique challenges and opportunities. That's why Capital One offers a comprehensive suite of financial services backed by the strength of a top commercial bank. Visit capital1.com Commercial Member FDIC how much.
- [48:59]
Ben Keyes
Can one person change in four years? The answer comes down to who he puts in charge. Trump's Terms is a podcast where you can follow NPR's coverage of the people who will shape Donald Trump's first hundred days in office and what their goals are. We will track his cabinet picks, his political team, his top military leaders to understand who they are, what they believe and how they'll govern. Listen to Trump's Terms from npr.
- [49:23]
Tanya Mosley
Breakup stories are going super viral online. Normalize posting why you broke up on the Internet. I cannot believe I'm about to tell this breakup story and expose myself like this. On It's Been a Minute. We're asking the big questions about dating. Like, what's the line between a juicy story and an invasion of privacy? To find out, listen now to the It's Been a Minute podcast from NPR.