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welcome to the Deerwood Realty YouTube channel I'm John Schink founder and managing broker of Deerwood Realty in St Louis, Missouri tonight we have an interesting article that I saw about the Biden Administration and their uh desire to help with what is considered a housing shortage a how housing crisis and and uh just off the bat I I don't think I'm too political I just I know that when when there's a problem right when when there's been an identified problem the government always has to you know provide a solution or they're looked upon as not caring for the community and so even if you give a token um effort like what is being done in this case uh it's at least you're saying you're doing something so I don't want to rip on the Biden Administration um every Administration does you know silly things to pacify people that are complaining and sometimes it works it sometimes it doesn't I I wanted to go through this because in my experience and in my time in school uh you know we would often sit in class and uh students would say you know I want to build I want to develop a uh a shipping container uh office building you know or all kinds of stuff that was just you know green and everything right we're going to do all these wonderful things never really talked about the profit or the profit motive was always set by the the environmental um uh environmental uh Pace or environmental theme right you're going to pay more for this you're going to you're going to increase our mortgage or our mortgage you're going to increase our margins because it's green and you want green right how could you not want green so let's go into this article I think it's kind of fascinating this happened a while back I just didn't get to it I've been um you know you know where I've been I've been sick so here it is it says Biden has a $35 billion in financing new guidance for off office to resi conversions B Administration plan identifies resources for housing projects so now even off the bat like I know this sounds crazy but is $35 billion enough to move the needle in the what is considered to be a housing shortage currently in the United States residential housing no no it won't do anything it won't do anything it's it's going to be one of those things where certain people that are politically connected are going to just plunder this money whatever is released it's going to be like many other things that you probably know about but I don't want to talk about tonight because I'd like to not get shadowbanned on this particular episode I I mean it gets old okay so here we go the Biden Administration is looking to help the real estate industry convert empty Office Buildings into Apartments now we're going to go over the reasons at the end that this is not going to go as smoothly as anybody's been saying but you know so the Biden Administration has done this look we have a problems with you know a housing shortage the Biden Administration is here to help now again I don't care if it's Biden Trump Bush Obama Clinton I don't care that's the the point is not the administration the point is the policy okay the White House announced a plan to facilitate office to resi conversions especially near mass transit Bloomberg reported the plan centers on freeing up resources and financing to help Usher projects through bureaucratic and monetary roadblocks and so one of the first questions I would have would be does that mean environmental issues as well what about zoning issues in in local municipalities I mean if somebody doesn't want an office to residential conversion like in a local area in that government is the federal government going to step in and and

overrule the agency is also making it easier for Transit agencies to repurpose properties for develop and affordable housing enabling them to transfer sites to affordable housing developers or local governments at no cost so let's just go through my example right now let's say the federal government identifies an office building that they were using close to mass transit okay and they they say okay uh city of such and such we're going to give you this building congratulations and the city says great great thank you so much we're going to demolish the building and we're going to build what we want and then the federal government says ' no you can't do that and and the and the city government says well we're not going to build these we're not going to build we're not going to change this over to a a residential area we don't want it to be residential this is zoned industrial or this is zon commercial we're not changing it because you want it what happens I mean this is a very realistic scenario that could play out dozens if not hundreds of times throughout the United States it says oh and then so here we go what what are they doing right it says the Department of Housing and Urban Development is updating its guidance on the Community Development block grant fund which has already allocated 10 billion during B's Biden's presidency to boost housing Supply I'm sorry might sneeze now let me ask you this can you point it it's uh November the 13th 2023 can you point to one residential unit in the entire United States that's been produced Ed by the 10 billion that Biden has allocated to boost housing

Supply to Aid in the initiative the White House is releasing a guide book about programs they're literally writing a book They're they're writing a pamphlet how much do you think that pamphlet is going to cost such as opportunities for low interest loans and tax incentives that can be leveraged to con support conversions training sessions and technical assistance will also be made available to municipalities and developers oh those pesky developers I hate those developers they're always trying to develop things and make money off of it shame on them office tesi conversions have been a pipe dream of politicians and building owners since the onset of the pandemic given the glut of office space and high demand for housing it's interesting now all of a sudden the building owners this is not the federal government now all of a sudden the federal government owned buildings now this is private building owners all of a sudden trying to do something with their buildings that are not uh having full occupancy since the pandemic which is now going to get me shadowbanned conversions address both issues at once but come with challenges that elected officials tend to overlook oh really oh really what are these what are these challenges you mean it's not going to be just as easy as writing a a pamphlet and doing some technical assistance oh no oh no it says even half empty offices can have tenants with long-term leases and zoning and building codes make conversions expensive if not impossible in New York City for example every bedroom must have a window a problem in a building with large floor plates yeah like how are you going to how is every how how is that going to work now just just so you know I've I in I I worked in Detroit uh for about eight years when I was younger and I we did uh I did work on a a job site that was a commercial to residential um uh development in downtown Detroit it was close to the uh the big uh Transit building that's that Ford bought now um but that was like an industrial warehouse and it and it it it lent itself to a great design um because of the wide openen spaces and like obviously the utilities were just you know already done and fantastic but in St Louis for example we have the AT&T building that's vacant downtown and they've been as you know they've been looking for proposals to do something with that for the longest time and and do you realize the tax hit that someone takes Tak that that a municipality hit takes when it has to shift something from commercial over to residential it's massive municipalities really and and rightly so do not want to take commercial buildings offline if if they can help it I mean the tax windfall is just fantastic so you've also got that problem um it says also in districts where offices are struggling the most basic I'm sorry let me read that again also districts where offices are struggling the most lack amenities like grocery stores and that grocery stores that Residential Properties need to protect buyers and renters this to me has been a problem in the St Louis market for some time um there was a huge Snooks that was going to go in downtown I don't think it's still there anymore um but if you need you know people people want density right I I don't understand it exactly but you know I mean I've let's just let's just clear the way I've been to like London I've been to Zagreb and Croatia I understand walkable cities okay I've been to Chicago and what you're seeing in like places like St Louis that's there's no infrastructure built in or very little now I'm not critici I hope I hope for the best for St Louis and other places too I mean I I I I generally do but I mean you've got to have you've got to have the ameni you've got to have your grocery stores your hardware stores your restaurants your bars everything like a reason to you know walk and then you have to take care of crime I know people don't like to talk about crime and I understand why but there are some places that are downright dangerous in in in in in cities and that's that's not going to work uh just to change over a building that was once a huge office office building turned into residential without some sort of commercial uh draw you know you got to have some some reason to be in this area and so um how should I put this at the end of the day I applaud any administration's effort to um tackle what is perceived to be a problem um even if it's probably not going to do any good I I guess I mean that's what I've been that's how I've been brought up so I mean I don't know if honestly I've I've believe for the longest time if Government wants to fix a problem they can fix it they can literally click their fingers and it' be done it's just they don't do it and there's reasons why hope that doesn't sound too conspiratorial tonight um with that I'm going to head on out sorry for the late uh release of the the video I'm fighting cold pretty bad thank you for watching thank you for listening and I'll catch you on the next one