A Guggenheim Executive's Radical Plan to Build Millions of New Homes
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 18 July 2024
⏱️ 73 minutes
🧾️ Download transcript
Summary
According to numerous estimates, the US is massively short of housing. Zillow, for instance, says America needs to build 4.5 million new homes to climb out of this deficit. But right now we're not coming anywhere near to closing that gap. And in fact, the efforts by the Federal Reserve to tame inflation have likely made things worse, with higher interest rates slowing the construction of multi-family dwellings. So is there a way to create more homes, even in a time of high rates? In this episode, we speak with Jim Millstein, co-chair of Guggenheim Securities and a former Treasury Department official who managed the restructuring of AIG after the 2008 financial crisis. Millstein has drawn up a plan whereby Fannie Mae and Freddy Mac can enter the market for construction finance and re-start it. He walks us through how — with their existing legal authority — these two entities could make hundreds of thousands of new affordable homes come to the market each year.
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| 1:19.0 | Hello and welcome to another episode of the Odd Lots Podcast. |
| 1:23.3 | I'm Joe Wiesenthal. |
| 1:24.6 | And I'm Tracy Allaway. |
| 1:26.0 | So Tracy, something that we've touched on a few times |
| 1:29.6 | is the sort of, I guess I would say, perverse situation by which, you know, the Fed is raising interest |
| 1:35.4 | rates in an attempt to get inflation back to target and, you know, it seems like they're kind of |
| 1:40.8 | of having some success there and maybe we might begin a cutting cycle. |
| 1:44.8 | But in the process of raising rates, you constrain supply of housing in particular, |
| 1:51.5 | which is a big affordability crisis, one of the big long-term |
| 1:55.4 | upward sources of pressure on prices. Right, so higher rents and house prices are |
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