From WXXI news.

This is connections.

I'm Evan Dawson.

Our connection this hour is made in your search to find your next home in the Rochester and Finger Lakes region.

Here's how.

Yonah Freemark of the Urban Institute puts the situation across the country.

Quote Americans are fed up with housing prices.

A third say that housing costs prevent them from living near their jobs.

Tens of millions of families in the United States are paying more than a third of their incomes for their dwelling costs.

That's the largest number of rent burdened families in more than a decade.

End quote.

Everywhere we turn, we hear a similar refrain.

Demand has far outpaced supply.

Demand has far outpaced supply.

What typically follows is a fair and simple question.

Why don't we just build more housing then?

The housing crisis is complex.

We don't seek to oversimplify the issue this hour, but the basic equation of supply and demand is not all that complex.

In American cities that are building more housing tend to have cheaper home prices.

Here's Freemark again, writing about how supply and demand is basically the answer until you get to the very bottom of the income scale, he writes.

Quote, in a new analysis.

I find that in high housing cost metropolitan areas, more housing construction is associated with higher housing affordability for the population.

On average, less restrictive land use policies likely explained part of this outcome.

The Houston region for example, has less restrictive zoning policies, more housing construction and higher overall affordability than the Boston area, yet less restrictive zoning and high rates of housing construction alone are unlikely to meet the needs of the households with the lowest incomes.

For those families, affordable housing is substantially more accessible in the Boston region than in the Houston area, in large part because of the greater availability of public subsidies for affordable units in Boston compared with Houston.

End quote.

So a month ago, at the annual state of the Real Estate Industry event in Rochester, the CEO of the Greater Rochester Association of Realtors unveiled some new data and talked about a new initiative called Reimagining Rock housing community Driven initiative focused on addressing the housing shortage in Rochester and the region.

And we asked him to come on the program to talk about more of what's actually happening here and what may be changing, hopefully for the good in the near future.

Jim Mearkle is the CEO of the Greater Rochester Association of Realtors.

Welcome back to the program.

Thank you for being here.

Thanks for having me.

And also with us in studio.

Pat Casado is managing partner of Under Bergan Kessler LLP.

Welcome.

Thanks for being here, Pat.

Thank you.

And welcome to Kim.

Jessica as Vice president of Fairway Independent Mortgage Corporation and a past president of the Mortgage Bankers Association.

Welcome.

Thank you for being here as well.

Thank you.

let me just start with Jim and just asking if, if it is if it is as still as tough as it feels around here, have things turned for the better in any meaningful way?

No, it is still as tough as it feels.

Maybe a little worse than last year at this point.

I think your early comments were right on.

It is absolutely a supply issue.

Demand has been consistent, but supply has been dwindling and we are not helping that.

Well, you know, so I said I don't want to oversimplify it, but let me go ahead and oversimplify it.

Why don't we just build more housing, Jim?

It sounds easy.

it is not.

And regulation is part of it.

we have been working at this for many years, and, you know, housing decisions are local, and every town and city has its own, ideas of what they want to build.

zoning codes can be overly restrictive.

So a lot of our work has been trying to convince people that it's time to think differently about housing.

And we need to be open to a different method of creating housing.

we can talk about what some of those things are.

but we are in oftentimes our own worst enemy.

Well, so this hour, I want to try to paint the an accurate picture of what people are experiencing.

And listeners, if you, as I said, if you've been trying to find a house, if you're looking for your first house, if you're looking to move, downsize, maybe upsize whatever the case may be.

I do want to hear what you are experiencing, but certainly there is a lot of data that bears out what Jim is talking about.

And, you know, we've talked to Jim and his colleagues pretty much annually on this program for years now.

And here we go in the same kind of cycle where it's a supply and demand issue that really is tough.

If you want to be buying, although pretty good if you want to be selling.

Right, Jim?

I think so, yeah.

Although if you're selling, you might also be buying, which complicates things.

Exactly.

Yeah.

So, it's 844295.

Top listeners, if you want to call the program, it's toll free.

844295825526365.

Calling from Rochester.

26399934.

You can email the program connections@sky.org.

And before I turn to Jim's colleagues across the table, I just want to mention, you know, reading some, industry data myself.

Redfin published a report showing that Rochester tops the list of major U.S. metros with the least months of housing supply in the market, giving buyers fewer homes to choose from and less leverage for negotiation.

They read that in January, Rochester had just over one month of supply, far less inventory than is available nationwide across the country, there's just shy of four months of supply on the market.

Major markets across the northeast are still tilting in favor of sellers because of the limited supply available and higher buyer demand.

Active listings are down nearly 6% in Rochester from a year earlier.

Is that accurate?

That is.

I look this morning in Monroe County.

There are 294 homes for sale.

If you expand that out to include Orleans, Ontario, Livingston, Wayne.

It is 510.

Ten years ago, that would have been about 3000.

Wow.

So 510 in the greater county, the multi county region 3000 a decade ago.

So it's one just over one sixth the supply.

Exactly.

Okay.

So but I presume there's probably roughly the same amount of people looking as there would have been ten years ago when that was my point.

Demand is pretty consistent.

We can see the new listings are pretty consistent.

sales have been fairly consistent.

The supply has just plummeted.

And the number one reason there's two main reasons.

Number one is lack of construction.

Kim, what are you seeing out there right now?

Make sure you grab that microphone real close to you.

Kim.

There you go.

So, yeah, a lot of the same.

I collect data from a lot of, some of the participating lenders within the mortgage bankers associations, and they send monthly information about how many applicants have come through, and it's hundreds.

And that's just a small sampling of all the lenders in the mortgage Bankers Association.

So there's buyers out there.

They're just not able to find what they need.

Okay.

Same question for Pat.

how do you see it from your perspective?

It under Bergen Kessler here.

Well, putting on the the attorney hat with with multiple bids on properties, buyers have to be very strategic.

So that means buyers are not doing inspections.

many buyers have to come in with cash offers or cash guarantee offers, and not everybody can do that.

So it really, you know, restricts a buyer's ability to acquire a property.

So how from your perspective, your Kim looking at that data, I mean are you sort of in the Rochester tunnel vision or do you think, okay, it's a problem here, but you know, we're not alone here.

This is an issue in a lot of places.

So I'm I'm primarily focused here in the Rochester area while my, my license goes throughout the state of New York.

And my company is national.

I mean, it's you can feel this in a lot of places.

It's starting to shift in some of your more major markets, but not here in our area.

Okay, Pat, anything you want to add on that point to, I focus a lot in the affordable world.

And, what we're seeing is, the cost of construction in the affordable world is increasing every day.

I mean, today we heard about tariffs going into play, and that's going to affect our lumber stock.

And, he had project team calls today where people are panicking about the cost going up every single minute.

and that's not just a Rochester problem that's going to feed through everywhere.

But, here in Rochester, I mean, we're working on affordable homes.

We're building in the city.

the cost of construction for a small, single family home is over $450,000, and that has to be subsidized through grants and other programs.

The cost to construct a new single family home?

Yes.

In Rochester, in Rochester, New York, in the city proper or in the region?

In the city.

Okay.

408.

We're talking 1500 to 2000 square foot houses, over $450,000.

and if you go into the suburbs, you're probably no one's really building a house less than half $1 million.

So when we talk affordability, it's a significant problem across all aspects of homebuyers.

Until that number comes down, you're not going to see more people entering the market to actually build.

Is that fair?

That's very fair.

But we don't see a path for those prices to come down, whether it's, building codes and regulation that keeps getting added on to construction or, cost of financing, which keeps going up.

No one really sees those numbers coming down for, to build a house.

Okay, Linden parent, and I'm going to take your call in just a second.

It's a supply and demand question that I think will be perfectly relevant here, but I see Jim nodding across the table.

So if those numbers, if the if the number to build a new house is not going to come down, what is a solution to getting more houses built?

Well, there's a number of solutions to everything.

Pat's.

That is correct.

one of the factors in the suburbs is a lot of towns still require one acre or three quarter acre minimum.

Lots.

And to make that work, you have to sell it for 5 or $600,000.

So there are people who will buy those homes, but that's not impacting the market.

That is most stressed, which is the 150 to 250 market.

So it is impossible to build something and sell it for that amount.

So we have to be creative.

We have to find ways to free up that inventory that already exists, that is in that price range.

And one of the ways we can do that is better options for independent seniors who don't necessarily want to stay in their four bedroom home.

I can give you some stats on on that dynamic, but if we could find more appropriate housing to what they want, which is low maintenance, single floor living close to village center, city centers with this activity, you could free up hundreds or potentially thousands of homes in that price range.

That is so much in demand that you can't build, too.

So make sure I'm describing this correctly with the numbers where they are.

It's not realistic to think we're going to see a glut of new housing built.

However, we have a significant number of people who, for various reasons they may be living alone or with a partner, but their kids are gone and they maybe willing or wanting to move if there were good options and that would free up their housing stock.

Correct.

So you take an existing inventory that is not currently available, change the conditions, make it available.

Yeah.

Okay.

well, let me get back to that point in a second.

But I think Linda's question is, is related to all of this.

Hey, Linden parent, and go ahead.

Hi, Evan.

Thanks for taking my call.

so, yeah, I think it might have been partially answered just now with that, talk about not having the right inventory, but my initial question was, I don't really understand this whole limited supply and increase demand situation.

Who's limited supply, who's knocking down houses and increased demand.

I thought our population in the region has remained stable or even fallen over the last ten years.

And I'll take the answer off the air.

I kind of hang up.

Okay, Linda, thank you very much.

Jim.

You want to start?

Yeah, it's actually pretty simple.

Rick Herman, who's the CEO of the homebuilders, and I, analyzed building permits over the last 40 years.

And in the last 15 years, we are significantly down our monthly or annual average of about 1600 a year for 30 years.

last year, it was in the 2 or 3 hundreds.

So if you just go from our normal trend of building the last 15 years, we have under built by almost 18,000 homes.

Say that last part again.

We have under built from our our traditional long term average by 18,000 homes in the last 15 years.

So yeah.

So the the new supply that generally comes on is just not been coming on.

So everything else we're not knocking down homes.

Yes we're losing population.

But this other factor of adding new homes to the market has basically stopped.

And so if we ended up in a situation addressing, just to take one example, senior living as you describe it, does that count as new homes?

If we build a bunch of new units for seniors, are you're talking really single family dwellings for the most part there?

Yeah.

Single family okay.

So we're probably not the conditions in the market don't really look like that.

Problem is itself going to be solved without some creativity elsewhere.

No no, no.

And I think Pat could probably chime in on the senior housing even that we're under building for the demand by quite a bit.

Okay.

Yeah.

Yeah.

Correct.

I also do work in the low income housing tax credit area.

And every time we build a new facility, a new project, they're filled immediately.

The demand is so high.

Every market study we do for senior housing, it's off the charts.

So these can be filled immediately.

And as Jim was saying, folks want a place to go in these, projects or, multifamily or I'm sorry, multi senior units are extremely popular, but we have to think about what happens to that home that the senior is leaving.

The senior doesn't really want to be there.

They don't want to maintain.

And probably the municipality has given exemptions on the tax roll.

So it coming full cycle that property can be resold to someone who doesn't get those tax advantages.

It's a benefit to the municipality to fully tax the property that a senior is living.

Living in pet.

Can we?

I want all of us to understand the tax advantages you're talking about.

So if I'm living in a house for 40 years, kids have grown.

They're out of the house.

And, you know, it feels maybe I've retired.

It feels difficult for me to afford it.

Are there breaks advantages that keep people in homes right now?

Possibly.

Possibly so as a senior, you could be getting senior enhanced start based on your income.

Yeah.

there may be veteran exemptions, etc..

So, the taxes could easily be, reduced by 50%.

Now that person would need somewhere to go because of limited income.

And that's why building more affordable housing is an advantage.

So it's a mixed picture here.

There's going to be people who want to stay in their homes forever for the rest of their lives.

Understood.

There's also people who would move if they could.

They might downsize.

They might go to one of these new developments that we've been talking about.

If there's a good option there, there's an affordable option and an open option.

And it sounds like part of what Pat's point is that may be good for everybody, including the municipality, who might get a full tax bill depending on who moves into that house.

Yes, exactly.

And the upkeep of that property.

What we find is, folks, you know, are in their 60s, 70s, 80s are not keeping up the properties.

So someone new comes in, someone younger, they start rehabbing, remodeling, and it again brings life to these properties.

Kim, what are we missing in this equation?

I think just to reiterate that, you know, there will always be someone for a new build, but the first time homebuyers aren't looking in that space.

They're looking in that 150 to 250, which is the real shortage in the area.

And creative ideas like that will help get them inventory that they can buy and afford.

Okay.

So how much of this now, let me ask our guest how much of this now is is the market working itself out versus some kind of intervention in terms of policy?

Probably on the state level, maybe on the local level?

Jim, I think it's significantly in the policy level.

We we can't continue doing what we're doing.

there are really good builders out there.

They do the best they can, but the numbers just don't add up to create any new housing that's under, I'll just say half a million because of the infrastructure costs, the labor costs, the material costs, the regulatory costs.

It just keeps going up.

last I heard, close to 50% increase in costs.

So from 2019, pre-COVID for a lot of reasons.

But they haven't come down.

And and that's not going to change.

You're not going to all of a sudden see lumber go in half.

so we're stuck in this cost to build a new home.

You can make the, the footprint smaller.

But I had a builder tell me that the difference between a 20 500 square foot and 2000 square foot home is a lot of empty space.

That you still have a kitchen, you still have a bathroom, still have a foundation of a basement.

You still have all of the outside structure shrinking the size doesn't get you, the savings you think it does.

So we talk a lot about higher density townhomes, condos, doubles, triples, quads in the city.

and that helps.

But you still can't get the average cost down into that 250 range.

Oh, boy.

again, listeners, it's 844295 talk.

If you want to share your experiences in this, in this regard, or if you have any questions that our guests can answer for you.

844295825526368 for calling from Rochester.

2639994.

And again, you can email the program connections at skywalk.

Jim, I think journalists have been taken with ease.

I must say.

Easy stories, hopefully true stories of places like Austin, Texas, among other markets that have seen housing booms or at least from what I've seen, reported a significant amount of new housing built trying to ease some of the supply and demand and the inventory issues.

And that pressure on prices.

I mean, even Austin, from what I'm reading, is having a hard time keeping up with the pace of demand.

And they've kind of seem to be very open to new builds or, or have changed some of the conditions there.

So is there a single city or market that you look at and say, that's the model, that's what we have to do.

And I don't, every city's different.

You know, a lot of those cities that had these housing booms have a lot of sprawl there.

You know, Houston is I think they're starting to constructor third expressway outer ring because there's space there.

And they just keep going out.

You don't ever hear of Boston having a housing boom because they're contained.

So we have to solve the problem the way works for Rochester and for our region.

And so we could we could go to Seattle, where accessory dwelling units are a huge thing.

And they some of them are worth $1 million.

That doesn't necessarily mean they work here.

I think they can.

But it's hard to to pick a model and say, let's transplant.

That's Rochester.

So what we've tried to do is look around and pick the best little teeny pieces of ideas and present them to town and city and county officials and say, here's some options.

Which ones do you like which would work in your town, and let them kind of pick policy wise, what would be the biggest mistake, what road to go down, would you say, we really need to not do this?

I think the biggest mistake is sticking with our current process, of one acre lots pushing, taking over a cornfield and putting 41 acre lots in, selling them for 600,000.

We are going to price out an entire generation of potential first time homebuyers.

And and that's the wrong cycle because the the health, wealth, education and social outcomes from stable housing are very well documented.

And we are actually prohibiting a large, large, large percentage of our neighbors from having those options.

Is that what we've been doing?

inadvertently, I would say, but yes.

Okay.

So who needs to make the call to not do that anymore?

I think we need to just keep sharing this message and get town officials on board.

And it's local and its state or it's mostly local.

It's the decisions are local.

The money is going to have to come from the state.

But we you know, there's a very strong not in my backyard movement across the country.

Everybody, who is impacted by a development, you know, just down the road from them has concerns and those are valid concerns.

Things are going to change.

But we have to keep the whole region, the whole community in mind.

There are thousands of people right now looking to buy a home that can't.

So if everybody just says you're not going to build it next to me, it's not going to get built anywhere.

And so we're forcing these thousands of people to continue to do something they don't want to do with their housing.

Before I ask your colleagues the same kind of question, let me just follow kind of the cornfield and the one acre lots, which is something I think a lot of people can relate to seeing those kind of developments.

is it that that land should be used differently?

It's a is it that we should not be pursuing new builds on land like that at all, given the current stock?

What is it.

No, I, I think I think it's we have to build what people need and there is a need for that.

But if that's the only thing we're building, we're ignoring 80% of the problem.

Yeah.

And so that we talked a lot about infrastructure costs that we need to build more where infrastructure exists, which is in a village center, a city center on vacant lots, and leverage the existing infrastructure.

So that brings costs down.

If you don't have to run water lines and sewer lines and driveways and roads and electric, you all that drops down to the affordability of the housing.

So focusing a lot on the city, focusing on, you know, the towns and villages that have, areas close to services, close to restaurants, close to entertainment.

That's where people want to live, but where that's the least likely place for us to add housing of any type.

Kim, what would be the mistake if we did more of what do you agree with your colleague there?

I 100% agree with my colleague there.

I think waiting for something from a federal or state level isn't going to work necessarily in our communities.

I think we need to sprinkle in a little bit of everything and really just look town to town, opportunity to opportunity and just be more creative.

There's commercial repurpose.

There's a lot of mixed use retail, you know, live above it.

Go downstairs, get your coffee.

Those are the kinds of walkable communities that folks are looking for.

And there's a lack of around here.

So, it's, it's up to reaction to the commercial repurpose.

Let me ask both of you a little bit about this.

and I'm really looking forward to the new book from Derek Thompson and Ezra Klein called Abundant Abundance Team.

I've got it.

It's brand new book, and I haven't read it yet.

I've been looking forward to this.

One of the points they make is that, even Ezra Klein, a long time sort of progressive columnist for The New York Times, says in Democratic controlled cities, it's too hard to build and it's too hard to repurpose, and it's too hard to do new things.

And yes, there should be environmental review.

And yet, yes, there should be regulation.

But if it takes forever to do a project, everybody walks away.

And too often it takes forever to do projects.

And there has to be a happy medium where we say we have a big problem, we need a solution.

So when you talk about repurpose, that's in that category where people will say, well, I mean, we were just talking about the problem of homelessness last week and people are saying, well, I'm looking at all these and empty Big Lots here and an empty warehouse here.

And can this be repurposed?

Can we build new shelters?

And the answer is like, boy, it's harder than you think.

You know, there's a lot more rules and regulation than you think.

Even when a place looks like it's tailor made for it, it doesn't always work out.

In fact, it often doesn't work out is too hard.

Is it too regulatory?

Is it a another issue here?

How do you see it?

I think all that's true, and sometimes it does feel like you're moving really big rocks around.

But I think if everyone's on the same page and working towards that goal, that helps alleviate some of those.

So that's really kind of the key idea is making sure everyone's connected about what's the best purpose and can move things forward a little quicker, because you see some commercial properties that could be housing properties.

Absolutely.

I think you could point to one in almost every township.

I'm sure you're right.

Yeah.

Go ahead Ben.

Now, I was just going to add to that.

I'm looking at the Rochester, skyline here.

And pretty much now all of our major buildings downtown have housing in them, and they're full.

So whether it's Sibley building, the Xerox tower, you know, a Chase tower.

I'm using all the old names, but they've all been converted to at least 30, 40% housing.

Old City Hall.

thinking that building now, we look at our malls so and around great housing is there now marketplace huge housing.

So we just have to think more and more of this.

But Evan, you're absolutely right.

Regulatory and cost are are roadblocks here?

I just completed a project that's being started in Elmira, an old school that's been around for probably 90 years is being converted to housing.

It's cost.

The cost is over $600,000 per apartment to retrofit those.

But again, it's it's a housing solution, that is being funded through many state and federal grants.

at least 80% of it is in and through tax credits.

But that is one way to start the ball rolling, to find housing and eventually it will loosen up the 150 to $250,000 housing stock.

Well, Jim, you made the point that if you don't have to run water, you don't have to run sewer, you don't have to run a lot of infrastructure.

You're ahead of the game in terms of cost.

And so maybe some old commercial properties are in that category.

Are two of the two of the points that I think come up often when it comes to, what gets built or done and what gets blocked.

One example is just to kind of choose one from the last presidential administration in 2021, the Biden administration announced billions of dollars for new broadband.

And by the end of that presidential term, almost nothing was built.

Years and years, no, nothing to show for it.

But in Pennsylvania, I-95 has a 1012 mile collapse, and they rebuilt the thing in like 11 days.

And Governor Shapiro was like, we are.

This is we're not waiting.

We are doing this.

We're finding a way to do this.

And they got it done.

So, it's an indication that if it's prioritized, I'm not saying, again, you run roughshod over every regulation, but if it's prioritized, maybe it doesn't take ten, 20, 30 years, right?

Yeah.

It can't take that long.

the where there's a will, there's the money.

Money is not the problem we need to do is build a broader coalition.

We need private money.

We need private capital.

We need government money.

We need nonprofits and business on on board because this benefits everybody.

The the only way for our region to survive is if we help these first time homebuyers, people who grew up here, who come back from college and want to stay here, we need to help them put down roots, because if we can't, they're going to go to North Carolina, they're going to go to Georgia, they're going to go to Texas or Florida, and they don't come back.

So we are, we have the ability to control our destiny still for a little while.

But housing is a critical piece, and we have to find ways to give those folks what they want at a reasonably affordable price so that they can stay here and contribute to our community.

After we take this only break.

We've got your phone calls.

If you're on the phone, we're coming to you right after this break.

If you've emailed, we'll share your thoughts as well as we talk about the supply and demand in this this longstanding challenge in our region of providing the housing that people want, need and can afford.

Jim is president.

he's not the president.

He's the CEO of the Greater Rochester Association of Realtors.

Although if it were me, Jim would be the president.

I always promote him.

He's the CEO.

Pat, because that as managing partner of under Burg and Kessler LLP, Kim, Jessica's vice president of Fairway Independent Mortgage Corporation and a past president of the Mortgage Bankers Association.

Your feedback on the other side.

Coming up in our second hour, the team from Citi Magazine joins us to talk about local Irish culture leading up to Saint Patrick's Day.

From Irish pubs and bars, Irish music, even the rise in popularity of the sport of hurling.

We'll talk Irish culture in Rochester and Western New York, coming up with a crew from City magazine next hour.

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I'm Evan Dawson Tony in Rochester on the phone next.

Hey Tony go ahead.

how are you doing?

Thanks for taking my phone call.

I actually am calling in, because in my area, in the Beachwood area, there are, signs, nailed into trees and and on poles, saying things like, we'll buy your house for cash and quick closings, closings and things like that.

And now we're starting we've gotten probably since the pandemic, and a little bit before we can post cards at home, asking to buy our house even though it's not listed and there are no signs saying that our house is for sale.

okay, so Jim's nodding.

So hang there for a second.

Tony.

You've heard this.

Jim.

Yeah, and this has been going on for a long time.

There are people that's their business model is they'll buy, used to be we buy ugly houses, so they'll come in and they'll pick out their flippers.

And, you know, there's there's a role for them.

They're houses that need a ton of work.

And they have a model where they can do the work and get it to a salable, state and, and turn it back to owner occupancy instead of being vacant or dilapidated.

So it's been around a while.

the concern now is that some of these are backed by, private equity and hedge funds that, you know, the governor was in town Friday to talk about that problem and that and that is a growing problem.

20 to 25% of of all transactions are caught in a bunch of studies are likely going to private equity backed corporate ownership, and they're rented, and that removes them from the owner occupancy space for ten, 20, 30 years often.

Okay.

Tony, what what do you want done about this?

tell me a little bit more about it.

Sort of.

What?

You have experience with this?

Sure.

Well, our house is not dilapidated.

This, you know, it's not falling apart.

It's an ugly house.

And it's, the practice of doing that is is really not a good look for any company that sending, not only putting up, you know, signs in your neighborhood, saying houses for cars, but, I mean, this is like, pounding a nail and putting a sign in your house thinking it's your house.

And I'm sure that these, signs and postcards are not in particular, other neighborhoods that are more affluent.

And it's just, you know, it's it's just not a good look.

Does it feel predatory to you, Tony?

It feels predatory.

It feels parasitic.

Yeah.

These are people who are not, help you.

They're here, they're there.

And standing saying that methods to put more money in their pockets and that's that's, you know, you're talking about numbers and things, but you're not talking about the value of family and community and, home and, also the I have a question.

If the cost of housing and building houses is going up when people are flipping these houses, are they putting less care into the materials they're putting into?

There's a lot of fires that are happening in downtown.

Right?

Tony, I don't mean to laugh.

I literally I in that's my house that was flipped and just just had a chimney inspection.

No more fires at that house.

Otherwise the entire house may be the fire.

so I again, I, I'm not laughing at the point.

I'm laughing in sort of personal knowledge that that can be the case.

I would hope there's really good flippers who do really good work and really aboveboard.

But, Tony, you've given our guests a lot to chew on here.

And I want to thank you for for calling, because this is not something I've seen myself in terms of this kind of advertising or this kind of aggressive, kind of going after houses.

But let me just ask of you just briefly, what would you say to Tony or anybody who's in that situation?

Well, I think you're right.

And I think the concern is it changes the character of the neighborhood by selling to these out of town corporate landlords who don't often care.

Many of the the code violations come from people who don't live here.

They it's all about numbers.

They look at the Rochester market and we think prices have gone way up.

But you can buy three homes in Rochester for the price of one small one in Boston.

And so these investors are looking you're going, well, I'll buy 20 houses and they don't take care of them.

And it isn't great for the long term prospects for our community.

Okay.

Anything to add over here?

What I would add is there we do in New York have a consumer protection law that would help someone, where there's a, an investor who is trying to take advantage of them.

And I think to a certain extent, when you're advertising, I'll buy your house and they put a postcard on a tree or whatever.

they're trying to get someone who's maybe in dire straits, needs to sell their home, isn't going to get the proper advice, isn't going to go to their real estate agent and get a fair valuation or go to their attorney.

But in New York, we do have a law that, protects folks who may be, behind on their mortgage payments or in default, that an investor actually has to purchase the property for at least 82%.

I know it's a weird number, 82% of the fair market value.

Otherwise, the transaction itself can be reversed for up to two years.

So New York has looked out for folks that law has been in effect.

since the mortgage crisis of 2007. but, yeah, if someone's posting signs like that, maybe contact the municipality, because I'll bet you there's a sign ordinance that.

Oh, interesting to take those down pat.

So lawyer, great info from Pat.

yeah, I always get have a good lawyer here.

Thank you.

Pat Sardo, who's managing partner at Lundberg and Kessler.

But to Tony, I would just say I hadn't heard of this.

And at first glance, you go, well, it's not a big deal if you're not looking to sell your house.

But when you think about the people who would end up selling in that spot, you're probably not going to get yourself the best situation.

If what convinced you to sell was a postcard penned up on your tree.

So.

And maybe you are desperate if you're in that spot, and maybe you're in a hard spot in your life, and that's not the ideal way to do it.

So, Tony, very good.

information.

Thank you for that.

I appreciate it.

let me grab a couple other calls, and then I want to hit a couple of other points with our guests before we go for the hour.

It's ours flying high.

Colin from Rochester.

Go ahead.

Hi.

so I'll admit, I'm not super educated on all of this, but, for people who's, like, buying a house to sort of out of their scope, I'm more worried about, like, single units and all of the the abundance of dilapidated structures throughout the.

And I was wondering, like what the obstacles were for redeveloping those and, and you know.

Yeah, sure.

I lost you over there for a second, Colin.

But, I would think Jim Mearkle it depends on the the actual overall condition.

There's probably a wide range, but what's the answer?

Well, I think it starts with, understanding who owns the property.

Some of these dilapidated properties may be in foreclosure.

They may be owned by an entity that that doesn't have the ability to rehab them for whatever reason.

There's our foreclosure process in New York state is very extensive.

but we do we talk with the city regularly.

There's a lot of vacant lots.

There's a lot of structures that need some care and trying to figure out how we can most effectively and efficiently and affordably turn those back to productive housing.

Okay, Pat, I would just add to that because I do represent a couple of not for profits that specialize in rehabbing homes and in the city, there's huge costs to, remove the asbestos and the lead paint.

you're talking probably 100 or $150,000 to do it properly.

Wow.

And in a very old home.

so you have to be careful when you get the flippers who aren't taking care of these things.

But that is the biggest impediment to bringing the housing stock back to life in the city.

Okay.

thank you, Colin, for that.

Let me get Dorothy in Rochester next.

Hi, Dorothy.

Go ahead.

Hi.

Yes, I live in the J.

Child Street area, and I did see they were going to rehab ten to city.

But before they put in all that good housing in the neighborhood, there's so many other problems that should be addressed, including drug houses.

Right by shootings, prostitution, car dealerships all over Lisle Avenue that obstruct the streets on the side streets.

They parked cars illegally.

It's just like it's a real mess.

And I think they should also address all those problems while they're fixing up Tent City.

Dorothy, I thank you.

I don't know if that's beyond the scope of what our guests can talk about here.

I think, Jim, probably a little outside of your scope there.

Yeah, I think you're right.

It all ties together.

but stability and housing is one of the drivers to solve those other problems.

And rehabbing that building becomes an anchor for investment in the in that neighborhood, which, you know, tends to limit some of the other things.

But yeah, there's there are many problems that, that we need to address.

you know, we think housing is at the base of all of it though.

Dorothy.

Thank you for that.

Bonnie and Rochester next.

Hi, Bonnie.

Go ahead.

okay.

Yeah.

I don't know if you, know the term, living in place.

I live in an older home in the northeast part of the city, and, you know, it's sort of, Well, I'm not going to leave it right away, but, would be considered more affordable.

However, the is this is a focus primarily, mostly for maybe elderly people.

you know, houses get old and you need repairs, and and the repairs can be expensive.

So, you know, they they will live, continue to live in your home, is important.

And we need to find a way to help, with the repairs.

Now, if you don't, what happens there is that people have to leave their home.

They take money, they get, you know, maybe excuse me for the home.

Then they have to pay for an apartment.

For years, I, I just ran into some people that didn't even realize that.

And they were furious because they really didn't want to move.

So I just want to get this in quickly.

Is that our neighborhood two years ago gave a, an idea to the city to, have an arrangement for getting those, you know, a home.

I work our own co-op in the neighborhood so that you can have repair people for your, you know, repair.

And, we haven't heard anything, but it it's an idea that I think, has some merit.

And, we also say we get such a need to pay for a lot of it, because section eight is has a long history of building houses and things, so they might as well help with this.

Bonnie, thank you for that.

anything that that can be added there to help people Pat anything, stand out?

Well, if there's a senior, that needs repairs to their home, whether it's a furnace or a roof, repairs, there are agencies that that help with that.

I'm actually on a not for profit board, Sheen Housing.

And that's what they do every day.

in the 13 county area.

So, there are agencies that can help folks live in their homes, even if it's retrofitting, putting in a ramp or whatever, whatever their, special need is.

And I think there are state grant programs that address that, that, will come and do a full rehab of your house to bring it up to code.

Who should someone contact if they want to learn as much as they can about this?

I would suggest folks call, Sheen Housing.

They have an office here in Monroe County, and they also have an office in Ontario County.

Spell it.

It's Bishop Sheen s h e n. Okay.

Bonnie.

Thank you.

It'll take one more phone call.

This is Crescendo in Rochester.

Hey, go ahead.

Hi.

I think it's interesting that, you know, even folks on the on the sort of business side of this are talking about the need for affordability.

I think I applaud that is an indicator of the severity of the issue.

I think, I wonder if we're not overlooking, a sort of, simpler solution.

You're talking about making a complicated problem simpler.

What about just public works, right?

Like you're talking about sort of market solutions to how to increase supply, but like, why not a much more New Deal approach where we just public subsidies that usually go to lots of development companies anyway, just go directly to the building trades that are necessary to actually build the thing and just do public works, bypass the need for making a ton of profit at like each of several middleman steps.

and it's a two for one cause that also addresses the rental unit concern in much the same way, since about 60% of Rochester are tenants.

Yeah, yeah.

Interesting question.

Thank you very much, Jim.

Jacob, let me start with you.

Yeah.

I think that's part of the solution.

It's the what makes it complicated is there isn't one solution.

There are 10 or 15 different causes to this problem.

And it's going to take 10 or 15 different solutions.

And with housing to have a healthy housing market, we're going to need all types of housing all across the market segments, price ranges, geographies, sizes, styles because needs change.

And keep in mind, housing has a 5070 500 year life.

So we have to make good decisions now that don't put us in a similar, different bad position 15 years from now.

Well, let me follow the point that you're making and how difficult a complicated this can be with crescendos point that, hey, if we just get some actual public dollars behind this, maybe we can change the entire equation.

I don't know if we ever saw a granular plan last year in the presidential campaign.

You might have seen at the Democratic National Convention, Kamala Harris talked about building 3 million houses.

that just struck me as a really sort of a big goal that probably was going to be achieved through different strategies in different places, because Boston is not Rochester, it's not San Francisco.

it so did you view that as, hey, they're talking about supply number one.

They're setting a big goal without giving specific ideas.

Or was it more like what crescendo was talking about, which is we're going to put big dollars behind this.

I think the the big dollars would help.

But they you know, even though part of the impediment is all these decisions are local, that's part of the benefit too, because it we need a diversity in housing.

And you found you saw a couple of years ago when the governor, tried to push accessory dwelling units and said, if you're not doing what we think you need to do for housing, we're going to change your zoning for you.

People don't like that.

They don't like someone coming in and forcing them on what to build.

So we need to provide options.

We need to provide funding to to bring the cost down.

But we also want to create the type of housing people want and and the developers, as a for profit enterprise, only build what they can sell, which is what people want.

So they are filling the demand that is presented to them.

We just need to to get a little bit out of their way and give them a little help on the infrastructure and be open to more new ideas.

And it all kind of comes together to create a long term, vibrant, diverse housing market.

Crescendo.

Thank you.

and one other note here, Tom sent me a note asking, is it easier or harder to get a mortgage than it was before the 2007 2008 subprime mortgage crash?

So I don't know.

Kim, do you want to address that one?

Is it easier or harder to get a mortgage generally these days I don't want to use the word harder.

I want to I think the whole context, it's gotten better.

And the fact that we're making sure there's the ability to repay, which back before the housing crash, that sort of went away.

There were a lot of stated income.

No doc programs here.

Come in.

You got a pulse?

Buy a house.

We're great.

those failed.

That was the crash.

those types of mortgage loans.

So I think by having a little more due diligence and making sure the borrowers not just can get through the closing table, but have the ability to maintain that monthly mortgage payment is is just good common sense.

So I don't want to make a better system now.

Yes.

And just as a bit of side history, not that this is my expertise, but it was not just a pretty much anyone with a pulse can get a mortgage.

It was then we're going to chop up your mortgage and we're going to create these new investment instruments that are pretty opaque and people will not really understand.

And we know they'll probably blow up, but by the time they blow up, we'll have made millions of dollars.

And that's kind of what happened.

So, I mean, that's a very short history of it, but you're saying that that scenario is very unlikely to be able to happen again because of changes to the system in a healthy way, in a healthy way?

Okay.

Well, there's something else that I want to make sure I give Jim some time to talk about, because part of what you've been working on, Jim, is this economic impacts study that, well, will tell us a little bit more about not only where we are, but where we could be going.

Go ahead.

Yeah.

we partnered with the Homebuilders Association.

The national homebuilders have a economic impact model was created by Rutgers University.

This is an academically rigorous study.

And what they do is they take a, a real project in our areas.

We picked one in Penfield and they're a 62.

One was 170 unit single family home and one was 120 unit multifamily project.

And they analyze all of the cost inputs, all of the services that the town has to provide, all of the things that impact the town negatively from an economic standpoint.

And then they added all of the positive benefits higher taxes, economic activity, people buying the homes, the construction jobs that are created, the construction job, just, buying lunch while they're working so that the long term impact to 15 year impact to 170 single family homes was $41 million to the town of Penfield, which comes out to about $240,000 per home.

So there's a belief on a lot of places that housing doesn't pay for itself.

And if you just stop at the cost of services and the property taxes, a lot of times it doesn't.

But when you add in all of the other things that go into it, the the salaries of the construction workers, the salaries of the architects, the people building, the people living there, then go out to eat and they go to shop and their kids go to school.

And it helps with the school taxes.

The academic impact of housing is massive.

The the apartments were same study $11 million over 15 years, some 90,000 per unit.

So we have to change the belief that housing is a drain on the economy around the budget and that it long term it is a big, big lift.

So you go back to one of the previous caller said, why can't we just put more money into it?

We need to start with something that generates economic activity for the town, which allows them invest in infrastructure, invest in schools, invest in roads and bridges or whatever they want to do.

but we too often see people saying no because six people come to town board meeting.

They complain that there's going to be too much traffic from these 40 new homes, and it doesn't get built.

Where's the study coming from?

it's from the national homebuilders.

it was built by Rutgers University.

If you want to read, the whole thing, you can go to our our website, reimagine Rock housing.org.

And under the research, there's a PDF of the study reimagine rock housing that org which we will also link to in our show notes because, you know, I would never question Jim Michael, but I would I would try to verify.

Yeah.

And, you know, that's a pretty big promise.

Yeah.

That, you know, we often hear about, well, this this tax cuts are going to pay for itself for this project's going to pay for itself.

But you're saying that the data is pretty strong.

And this you really feel strongly about it.

the cynical part of me would say, well, of course you, Jim.

You think so?

But it's pretty good data.

Yeah.

Okay.

Yep.

Is a third party study.

we don't have any some ago.

Do you think political leaders are listening to them?

I think so, one of the things that I noticed is changing is now when you talk to someone, everybody knows a handful of people who have an adult child living in their basement because they can't find an apartment or someone coming back from college and they have to move to another state.

It's not a secret anymore.

Everybody knows.

And now people are saying, so what do we do about it?

Three years ago, I was like, yeah, you sure?

I'm not so sure.

Now everybody knows and the numbers bear it out.

There just isn't enough housing.

We are the worst market in the country for lack of housing, and that's driving prices up, which is not good for people who are looking to become owners.

Where the worst market in the country, we're not like in the bottom half.

nope.

We're number one in the wrong thing and the wrong thing.

So we want to be number one in solutions, in innovation, and creating new housing that meets everybody's needs.

There are thousands of people right now who want to become homeowners or just want a better apartment.

Doesn't matter.

We we need to create those choices for everybody.

Okay.

I want to thank our guests for an informative hour.

And again, if you want to learn more.

Jim, one more time, this new website that we were just talking about here, reimagine Rock housing, Dot org.

Okay, ideally these you're not going to go from where number one and the wrong thing to you know we're in the 50th percentile or the 10th percentile for in the bottom.

But this is a plan that can turn the ship in.

How how long before effective?

it's hard to say.

you know, we're doing a lot of work in Ontario County.

They've added 200 units through these type of things in a couple of years.

so it's slow but steady.

But we have to start now.

Okay.

3 to 5 years, ten years.

Ideally, we'd see a big change.

You think?

Okay.

Yeah, probably not one year, but it's a big problem that you don't get to be number one in the wrong direction and fix it in the year, but that's why we're talking about it.

Jim Jaco is the CEO of the Greater Rochester Association of Realtors.

Thank you for being with us.

Thank you.

Hey, Kim.

Thank you for making time for us.

Kim's vice president of Fairway Independent Mortgage Corporation.

Past president of the Mortgage Bankers Association.

Thank you for your expertise this hour.

Thank you.

And Pat is, managing partner of under and Kessler.

Thank you for being here as well.

Thank you.

We have more connections coming up.

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