national governors association winter meeting in washington d.c., this is about one hour.

>> there are also oupieces directly under our purview about what we can do to reduce the cost of housing in our state in fact it's so much on our minds that when governors get together

no matter what the scheduled topic is it seems like we end up talking about housing. it is a roman empire. as i travel around the state it is a top issue.our states, we do such a great job making sure they are a great place to live and when we successful it almost makes it hard to afford to live so we all know the stories in our states, parents who is 27-year-old still lives in the basement with no prospects of moving out, those who want to take a good job but would have to commute an hour each way, people who are the backbone of our community, law enforcement, to afford to live in the cities they serve businesses that cannot recruit the tower they need to power their growth. we are focused on making progress in colorado last year i signed a bill that banned growth caps in several municipalities.

we are moving forward aggressively to increase the supply of housing with more housing now looking at additional family housing and transit oriented communities , excessive three dwelling units by right we're tackling liability for easing multifamily condo construction easing government mandates like , parking requirements and i'm very excited to hear what other governors are doing because this is a challenge that we all face . we have a national expert on this with us who is deeply involved in the fight from a policy perspective and working with ngos in this space across the country who will help give an overview of national housing trends. charlie anderson is the executive vice president for infrastructure at arnold ventures. before he joined arnold ventures, which has been a great partner to us and i know so many

other governors, he served as a special assistant to the president for economic policy at the white house economic council . he led their work on permitting an environmental review, which is a great backdrop for the current role because a lot of what we're talking about here is reducing red tape au cost in time and treasure to be , able to build the housing atkn now he is focused on solutions to help america build faster bet ater,can all celebrate and with that i welcome charlie anderson to join me on this stage. [applause] charlie, thank you for joining us.

when you said you want to build things faster, >> on the infrastructure team we find to build faster, better, lower cost. it means transportation infrastructure and housing. it's a really important moment and you can see that people are hearing about this all of the country so i really appreciate the bipartisan support for the issue from governors everywhere. a decade ago acute housing costs were really concentrated in sort of those coastal land constrained cities, places like

san francisco and new york city but it spread and housing affordability is an issue all around the country for people at most income levels. also workforce and seniors everyone is struggling in some way with affordable housing on the evidence is really strong. more restrictive zoning and regulations leads to fewer homes that housing shortage leads to higher prices and now we're millions of homes short of where we need to be based on population growth to keep up after decades of underbuilding . and that underbuilding means that half of renters right now pay more than 30% of their income on the rent each month . that's 22 million households and even worse you have 12 million of those households who pay half their income on the rent each[

analyzes of what is available, what needs to be built if we don't know where we're going we're not going to solve the problem. and one of the things i did last year under another emergency order was establish a housing production advisory council, similar to, i think, what you were doing in montana, 20 plus individuals. housing producers, engineers. local government leaders. folks who? people who finance housing. all coming down and being like, what do we need to do? well, they gave me a report, a 59 recommendations. we're still going through those. but it's everywhere from financing to construction in workforce to model codes and permitting and land use, supply. all the things that we kar in our state and probably in yours as well. so with some of those recommendations, i have one bill on our current legislative session. it's our housing production

bill. i've asked for $500 million in one time dollars to do a number of things. the two biggest ticket items that we're negotiating right now is money for infrastructure. if you're going to build housing, we're hearing you don't have water, you don't have sewer. we're all dealing with that. so we have to put some money in there. we6 also need more financial incentives for workforce housing. it's the role, i think, of the state to really be involved. and we have been in deeply subsidized housing but we are hearing from our private developers that they just need extra help to get more workforce housing put in into the pipeline. we're establishing for the first time a housing accountability and production office at the state level that will provide technical assistance to our communities in terms of grants and to it will provide model codes and other things to simplify at the local level where we know most of this takes place to get more production in the pipeline. and we're dealing with land supply. for those of you who know

oregon, we have a 50 years of a fabulous land use system that has gotten a little creaky when it comes to housing. so we have said some cities, if you can show a need for lanin affordability, you should have a one time expansion tool in your urban growth boundary to build more housing. and 30% of that new development would have to be affordable. so my hope is the legislature passes that and we really have a jumpstart on what we need to do. the bottom line for me is when people say, what do you have to do? you have to do all of it. all ofti p our state, where your social add on supply, we're going to have to really push hard. and so i look forward to working with my legislators to get that done. so i haven'tsk it would not be a great meeting if we didn't actually challenge ourselves to do something. there's a tax bill in front of congress right now that would be helpful. and i want to thank the western governors association for talking about some of the issues that are in the tax bill today.

greater flexibility for public activity, bonds in our states. we've maxed out our threshold on public activity bonds because we've been almost putting exclude civilly all of that ability into our affordable housing. so we need more ability there. and we all know low tech, the low income housing tax credit is really important for penciling out affordable and and workforce housing. we need more unlike. so right now the tax relief for american workers and families act. i know who wrote that one. the tax relief bill that's in coress deastrengthening inland tech gives us more thresholds in private activity. bonds. like i said, wga has also said is what we need to be doing right now. it passed the house 357 to 70. there might be some things in there. ths causing a little drama, but i can tell you if we could get that tax bill passed, those things are going to be really huge for all of our states. so if you haven't talked to your folks, talk to your senators. we need to pass that tax relief bill so we can get low tech increase, as well as getting

more on public activity bonds. so thank you. thank you. thank you, governor kotek. and i think in terms of our advocacy here role, i think anything that reduces financing costs, which is one of the key drivers of cost, would be good and that would include you know, fiscal responsibility. it would include monetary policy, it would include tax credits. as governor kotek mentioned. but these kinds of policies federally that would create an environment with or specifically targeted lower financing costs around housing would be helpful. governor cox. thank you. go polis and and thank you so much, charlie, for for taking time to be here with us. i want to thank my fellow governors for inspiring me as well. greg montana, thank you. we've we've copied a lot of what you're doing. this is the the benefit, i think, of the national governors association. we should be stealing ideas from each other and things that work. and so i'm going to change my remarks just a little bit because i'm going to take a

little bit different approach, if i could. and and share something with you that you probably haven't heard yet. and i really hope it passes my legislature next week or i'm going to be very embarrassed. so we'll see what happens here. but i so i had an epiphany a few months ago that is very different. we have been doing a lot of the things that everybody else is doing and some of it's working for sure. what would happen, though, is we would take all these ideas to the legislature, and by the time i got something through and we did, we got things through. they were always a little bit watered down. our league of cities and towns none of us have ever experienced doesn't happen there. but my my local municipal parties were really good at kind of watering some of these things down. and i get it. i'm a former mayor. state coming in and telling us what to do. so we it was a struggle and we've taken a shotgun approach. we have to do everything right. you just said that gover-nor kotek. so the epiphany was this i needed to change my messaging. i, i needed something that the

people to cut through the nimbyism. i needed something that would resonate with the people. i needed to get to the simplicity on the far side of complexity. and what i realized was this we're doing all of those things. we're doing density we're building more apartment buildings, we're doing we're doing all of this stuff. but the one thing that we were not building any more, we stopped building about 15 years ago in almost all of our states are single family, detached owne occupied starter homes. i'm talking about homes that are 1000 square feet to 1400 square feet. right. how many of you grew up in a home like that or started your families in a home like that? almost all of us. okay. so we just are building those in utah and i think in most places in the country and what i found was the starter home, that idea of a starter home, the american dream, home ownership was something that resonated with everyone and cut through the clutter and could get us past the nimbyism. now, most people didn't want a big apartment building in their backyard, but their heart went

out to this idea that someone could own a home for the first time. our schoolteachers, our firefighters. so, so. so we economists and they came back and said, we need to build 35,000 starter homes in utah. we need all the other stuff, too. so i'm not saying we don't need that. we need 35,000 starter homes in utah in the next five years. and that became my message, my mandate. that is all i talk about. we callst homes that resonates with people. it's something they can believe in and buy in. so then i go to the legislature and i have all these ideas, and it turns out we don't have the budget we thought we were going to have this year. we still have a surplus in utah, but not nearly as much as we thought we were going to have to be able to do this. so we started diving in with all of the builders and developers in our state, finding out why are you not building these homes anymore? and there were lots of different reasons, but if you look at your states right now, and i was surprised to see this, our building starts are going down right now. part of that is because of interest rates fore other reasons. and what we found out there were a couple of things. one, again, because

municipalities weren't offering smaller lots, the incentive is every time. right. so we have to change that. but the other thing that i did not see coming is because of the bank failures that happened a year ago or however long ago that was almost exactly a year ago. the the fdic pulled back and is limiting the amount of money thatend. and so many banks, many of our developed others have projects on the books but could not get construction they could get construction loans, they were getting them at interest rates that were so high, 10 to 15% that it just they struggle to pencil it out. and if you're getting loans at that height, you're not going to build starter homes, inexpensive homes, by the way. median home price in utah now is apchu have to make $170,000 to to buy a median home in utah right now, 75% of utahns could, if they didn't own a home, now could not afford to own a home right now. that's unsustainable. so so here's what we did, and i'll try to get through this reallyuickly.

this is the idea that just came out that i don't think anybody else is doing. i need a lot of money. right. and so we have treasures fund our public treasures. we call the pta fund. this is where do you invest all of the money in in your state until it gets savings account for your your state, your municipalities may participate in that as well. right now, for us, it gets invested in short term, you know, like commercial paper, mutual funds, those types of things. securities, really securities. a 5% return on that every year. and it's kind of a liquid fund. so wait a minute. we're investing in china, we're investing in new york, we're investing in california. that money, our savings account. but it's not being invested in utah. what if we took some of that? what have we took? right now, we're looking at 350 million, but we could go up to maybe $1,000,000,000 of that and started investing it. in short term construction loans for our developers to build

starter homes. all right. so that's so the bill has $350 million in it with the 3.5% return that will be mixed with it has to be mixed with the financialks will lend this out. they'll mix our money with their money. they lend it out, you know, for a year for the construction loan at 3.5%, the developers, they have to build 60% of the project has to be homes under $350,starter homes, small lots. now you're wondering the cities will never go for this, right? well, the cities will go for it. and here'hy. we're creating a new zone. a first home, a starter home zone in utah. they have to they have to provide smaller lots. that's part of it. they have to do that. but what they get in return that they're very excited about, they get access to some infrastructure funding that we're giving them. they these are deed restricted lots which means that there are no secondary rentals. they have to be single occupied.

so that means the the big institutional investors can't buy them up and rent them out. they can't be used as secondary rentals on the market. our cities are really excited about that. and again, it gives them a place for their firefighters and their they're their police to live. and for our kids and grandkids. so we we will have an opportunity to really juice the supply side of this. and we have builders lined up. they said, look, if you can get us money at three and a half percent at three and a half percent, we will go build all of the starter homes. you want right now. so i really hope this is going to work. i think it's going to work. i think it's going to work in a big way. and we're we're we're excited to share more details of that with you. we're going to watch that. spencer. and let me let me throw one more because we're all and as kotek mentioned financing as well. and i think we're all generally frustrated around financing because it's not directly in our purview. but that's a great approach. one more to throw out you might be familiar with pays

property, assess clean energy, a form of sort of increment financing on the property we're also looking at that for accessory dwelling unit construction. so basically you take it out as a senior, lean on the property assessment at a much lower interest rate than a commercial mortgage would be. it goes with the property. obviously, if you sell itthe future. but at the micro level, we're hoping that we could implement that as a lower cost financing. there's a phil understands this stuff inside now. you can explain it all to us. phil, i want to go to governor green, but let me go to charlie first to kind of comment on on what he's hearing. and i think there's a great exchange of ideas. i mean, my basic takeaway is isn't this exciting? right? i mean, there's just so many of you taking this venue. as i said, and catering it to your states in different ways that meet the needs of each of your people. i mean, this is, you know, sometimes it's hard to be hopeful about where our country is going right now. but this is like by partizan work to solve a problem that is profound in people's lives in so

many ways. i mean, this is this is stuff that we will all be proud o now. so thank you for that. i just to pick up on a few themes as governor cox said, it's always hard. the first time you go in and you push on this and people scream and they have all kinds of reasons, but i think what we see is that over time you elevate the issue people, it resonates with people. everybody's feeling it and you go back at it in a different ways. you pick up pieces and you and you try and even governor gianforte, who had such success last year, is going back at it again because there's no silver bullets here. you're not going to solve it in one fell swoop. so that's that's exciting. i think as governor kotek said, you need the financing tools. you need the affordability tools alongside the supply, but you can't do one or the other. you've got to do both. and if you don't deal with the supply issues, it's going to push down on the most vulnerable people. and that's why you see the places with the lowest vacancy rates, the places with the highest home prices are the ones with unsheltered homeless populations that are really struggling. are people who are getting evicted. and so those two things relate to each other. and i hope that conversation

between people who care about so-called capital affordable housing or homelessness services, or just treating people with dignity are also thinking about these supply issues that are pushing more people into housing instability. and i think, as governor gianforte said looking at vacancy rates is a good test of what housing, you know, healthy housing market looks like. and, you know, the vacancy when. the vacancy rate is higher, the tenant, you know, gets a little bit more of a second chance. that especially people who are coming from, you know, environments where maybe they're coming out of incarceration maybe they've had other struggles making sure they have a place to go is highly dependent on what are the vacancy rates. but that's also true for workforce. that's all. and the last thing i'll say and then i'll shut up and let you all talk because you're so much more interesting than me. is, you know, there's this there's this connection where people see they see a lot of new homes being built and they say oh, that's all luxury housing. but what people don't realize is that any new unit that is built, somebody is moving into that and they're moving from somewhere

else. and if you look at the chain of moves very quickly, class c, more affordable units become more affordable than they were before, and somebody'sing into that unit, too. and so that's kind of the connection between the supply challenge and workforce and up and down the income spectrum. so i'll stop there. u know, they say hawaii is hell on earth and no one wants to live there. so governor greene, what do you do with a problem like that? but now that i know there were the second most beautiful state to montana, it's more challenging. a couple observations and really great thanks to all of our colleagues and our expert about the observations that are absolutely what we're seeing. also are. but our median cost is now $1.1 million in hawaii and the islands, and we have shortages of precisely the nurses, teachers and firefighters. and we're making that case. a couple of things have happened since we last were together. first of all, first of all, we did, of course, recognize housing as our greatest challenge, just like seemingly

every other state. so we're right there with you. and we went into emergency rules immediately like a really good solid red state. okay. we we did emergency rules on homelessness and housing. and people werere? and we had a war that broke out. but to try to pull back every possible little bit of red tape and restriction that we had been instructed over the many years with lots of really thoughtful studies, actually. so we did that. and it it it became so controversial andt our developers who loved every single thing and helped us build these emergency proclamations were too afraid of using them for fear of litigation. so then we had to compromise compromise and then kind of come back down to earth. so there was that. happened was on august 8th, the fire occurred and the fire on maui displaced 3000 households in a market that was already beyond tight. i mean, you can't rent anything for less than five or $6,000 a

month already on maui. and it threw everything into chaos. so what did we learn? well, we already feel like we know we have to do all of these housing. but when we pulled back the curtain, we then found out okay, where are you going to house people now that they've been displaced? thr fema friends will tell us, and everyone's been hearing that washington post, new york times and wall street journal is long term rentals. we have to find long term rentals. we pulled back that curtain and we found out what the real deal was in our state on maui alone there were 31,000 short term rentals, 31,000 150,000 people live there and in our state we have 89,000 short term rentals of which a total for the whole state, 89,000 short term housing only 15,000 are legal. so we have 74,000, quoteillegal or sanctioned, unlicensed short term rentals. i have 50,000 units.

i'm 50,000 units short statewide to probably kind of be able to house everybody and i have these 89,000 short term rentals because it is so appealing to come and short term rent in hawai'i. i want to unpack this a little bit because we're going to have to work on this. this is one of our huge pieces of solution. why i'm mentioning it now for us, a short term rental brings in 400% return as compared to regular rentals. so if a house is being rented at 4000 bucks a month to one of our nurses, a short term rental owner, god bless them. we' in 16,000. so how do you compete with that? some some stat 52% of all of hawai'i short term rentals are owned by mainland guys and. 27% of all of our short term rental owners own 20 units or more. so institutial owners. we are. if i could tomorrow put 40 or 50,000 of these units back with a nice runway with some tax breaks, i really wouldn't have a housing crisis.

but on maui, we tried everything amazing. only the council passed a bill to give people 18 months to two years of complete property tax amnesty. no property tax. if they would convert to a long term rental to house to people who've been disp a people. and only 15% of the people would even take that up as an opportunity. and we're paying theull boat their fair market value of what they earned a short term rental, you know, business people. so it's that difficult to convert that without maybe bringing down some pretty terrible you know, we described it as like a nuclearwant to just like, disrupt people's business lives, but we now are out of balance. we have a fundamental imbalance and that was what i was thinking as all of you were sharing your stories. i think there is a fundamental imbalance in america and we're going to have to bring it back in some way, whether it's short term rentals or affordable loans or projects that we actually

use. some of our public dollars for. one idea has also come up, which is our bankers have told us if we set aside about 5%, the value of a large project like, say we can guarantee 5% in the count in a special fund in our state coffers, they can begin to loan way below two people because no one will go a wall on a 3% loan when regular rates are 7%. so that's another thing that is emerging as an idea. so i wanted to share that scenario with you and then talk very, very briefly about homelessness. for us, have high homeless rate as you know, we are poised in your hopefully asking in a couple of years whether we did or not were poised to drop unsh by half over four years. even after having had a very high number. and the way we're doing it is we are using the resources we have, including health care resources to build small villages and let people go in at really low cost. the villages housespposed to,

you know, four or 500,000 to build a kind of regular home. and we're taking very high utilizing in suffering individuals and giving them even sometimes a tiny rent or no rent, the space to go and get better in their cost are dropping at over 70% per person which will free up medicaid dollars, which gives us the capacity to invest in some of these otherwe know, hhs has let eight of our states begin to do that. so it's a lot to share. but i just wanted to say, i think there are some other imbalances in society that we're going to have to address if we have any hope of not having the same problem two, three and four years out. i want to turn to a moment ago. yes, sorry. right here. yes. yes. is anybody kind of figured out the short term rental thing? is anybody doing anything in that space? we know. we know new york, right? new york took a pretty bold action and they passed a bill where you have to be on site to have a short term rental.

now, that's pretty aggressive. okay. but it did drop, i understand, from my you know, the lectures i've received an update by over 80%. so that's a you know a lightning bolt that hits a market. can't say whether it's good or bad. we'll have to ask cathie, but we're about to do some similar things to return some housing back to the market. and i think charlie wants to get it on short term rentals. we certainly don't know the answer in colorado either. spencer, i want to hear and i want governor murphy to get ready. he's our resident banker, want to hear your thoughts on the financing and, you know governor cox's idea the one i mentioned on a pay increment governor kotek, what should we advocate for federally? i mean, it's hard to talk about housing without, you know, and ignore the fact that you have to borrow to build. and so i would love your insights on that, on short term rentals and whatever else you want to address. charlie yeah, i was just going to say on short term rentals whatever you think of the right answer, you know, new york city's vacancy rate is 1.4% right now, right? they have not. th supply problem. there's many other tools they need to bring to bear and i know the mayor is trying to do that as well as groups like open new

york. the governor made a push on that aso the only other point i'll make is a lot of folks have talked about financing tools. two things. one, governor cox mentioned that because of sort of the banking system issues, some of the regulators have asked for more equity to be used to finance multifamily housing. that can often come at a high cost. then rates as well. just generally, if you can replace some of that equity with public dollars where the public loan from like a housing finance agency, you can cut the cost by like 6 to 10% to build a multi family unit and actually finance some of the affordability. and in a way that makes it pencil and actually works the units get built. montgomery county in maryland has done this recently. zach marx is an interesting person who's a who's worked on this. there's an odd lots podcast if listens. and i think the other piece on high financing costs is it makes delays even more expensive. so it makes the ability to get through the red tape even more essential because delays are more costly. they were always costly, but they're even more costly now for governor murphy.

jared, can i just just because i yes. because i don't know if other states do this, but in oregon, we changed our constitution to use our public obligation bonding capacity at the state to fund housing, which is why the pay bills are so important. and i don't know how many people are doing that, but we've had that for almost a decade now. i'm not sure i've got a magic wand. jared, a couple ofvations. most important thing i've heard is i would like greg jan forte's legislative calendar in new jers. so that's the most important follow up that i've got. phil, phil, mark twain said no man's life is safe while congress is in session. and phil, phil, we these days we're all safe while congress is on but. it's --. as a former member and phil, i was going to say, we've got a little bit better because greg's got 90 days every two years.

we've got 80 days every two years. but we're trying to get a change to two days years. that is for that is for the ages. i want to come back to doug in a second. no, i'm serious. but we've got a we're not dissimilar than any of you. we're probably got one of the most expensive. it's not hawaii. our median house price is about 550,000, but it's up dramatically, especially post-pandemic where we have a lot of in-migration from new york city and philadelphia especially up north. we have a chronic shortage of affordable housing. we have a very famous now decades old case, the mount laurel case, which was basically redlining against black and brown potential home buyers. that has had a hugest. now, 40 years plus in new jersey, there's a bill that's being debated and pending in the legislature, which may well at long last solve that riddle.

right now, it's in the courts, town by town that may actually get solved this year, which would be a pretty historic step in the right direction. i won't bore you with all the things that we've done. we're and we have a huge tina like you. we have a huge shortage. i'm not sure diane and i were saying, i'm not sure where that number lands. the advocates probably push it to a bigger number, but it's still a big number, no matter where where it lands. on the specific question of spencer's ideaiswhich come back to doug. i love it. and my guess is it's going to work. and you've given us food for thought. but doug, i've beenpublic bank in new jersey since the day i got in office, and north dakota is the only state in the nation that has it. k me that spencer his approach is a little bit of a version of that you don't go to. i know student loans is a big piece of what your public bank does, but i wonder if there's something in here that a, we could learn from that. but also it's kind of a variation oft whanorth dakota, as

i understand it at least. yeah well, and happy also to talk spencer about that idea because of our legacy fund which is built with energy. so think of it like a mini sovereign wealth fund, not as big as alaska's, but we're building it in that when we passed legislation a few years ago where we took 20% of it, which was 1.6 billion and growing, and that 20%, 10% was designated towards going towards bonds in state in state investment, another 10% towards equity was a little aggressive on the equity side for us right away. we've made some modifications but we've got two tools. the state bank, which is over 100 years old, the student loan portfolio is about a $10 billion bankv! about 10% of the portfolio is student loans. and the other piece goes towards all kinds of basically economic developmentmunity banks. so we don't compete with our local community banks. but we've probably got the most robust local community banks in the country because we've been able to stop the large national

is from coming in, buying up all the small town banks, then closing the so we've been able to maintain local family ownership and that's why we've got such a healthy, well-capitalized local banking system. so that was good. jad, if i may, to other quick. that's why my one concern with your plan, spencer, is whether. or not they're going to the local community. banks are going to see you as crowding them out the sec community banks will be participating in this arrangement. that's important. and they'll be matching funds and they like it because it increases, again, their threshold to be able to lend with with the security of the state, backing it. so one of the that's one of the magic ones in the north dakota bank where they have the sort of put the money essentially through the community banks. so there's harmony. the other comment, jared, is a simple one. i'll be stunned if a year from now interest rates are lower. i don't know how much lower, but i'll be very surprised that they're not lower. and god willing, that's a journey that will continue and a chunk of this problem will get

either solved or get a lot better than it is today. i believe governors. jared yes. yeah. governor carney yeah, i just have a quick i'm not sure i heard it to a limited extent, i think. but are there other states i know maryland has an inclusionary zoning requirement in montgomery county. i'm just wondering if any of other governors, other states have inclusionary zoning. so in a kind of high income community with big houses, a requirement that a portion of of the development include affordable units just wonder if anybody has something in colorado, as an example, we allow our municipalities and counties to require up to 20% homes are capital affordable at their discretion, they can do 0%, 10%, but up to 20%. governor moore yeah, thank you so much. and and first, i just want to say thank you to so many of you for for for answering my calls when i called, asking about this exact issue, because this has been a core priority for us and

also folks in the arnold ventures who've been doing a lot of great work on together, deal with the issue of child poverty. so so thank you. and and it is true. i mean, so in our state, you do have a lot of local zoning that includes inclusionary housing. it is not something that takes place on a statewide level. and that was actually one of the lessons learned the had. was that how you look at these things from a statewide level? it does become complicated and so we actually have what is now we've just introduced maybe the most aggressive in the row housing package in our legislative session in our state's history. that's actually in front of our legislature right now how can we do a lot of this movement through incentives and not mandates, because that has been a key thing. i think being able to get a lot of these local jurisdictions to be to be bought in, because also the challenges that we are seeing in montgomery county and how we can utilize inclusionary housing is going to be different from a baltimore where part of their challenges, there's 18,000 vacant homes, if you include brown homes, a brown brownstones, it's they're looking

at it is very different than even from the eastern shore, where it's about how do you protect the farmlands and the wetlands. but in the places where you can build that you should be able to build. and so if we've really had to take a very targeted and regional approach to it, i think there's three things that we've re focused on. you know, one is, is how are we talking about increasing the inventory? and we spoke about some of those things and actually utilize a lot of apprenticeships and things of how to get more people involved in that work. the second piece is, is just the basic protection of renters, and that includes legislation that we have on board now, which is giving a rider first refusal for renters are turning more renters into into homebuyers, raising the eviction filing fee in maryland. maryland right now is the lowest eviction filing fee in the entire country. and the third piece is, is producing know, you just spoke on it. you know, we're we're proud of the fact that, you know, maryland is the is the birthplace of thurgood marshall and it's a birthplace of babe ruth. it's also the birthplace of redlining. it is where redlining began.

and the idea of using di lines to be able to determine where people can live and what the values of their homes should be. and so we've really tried to take a very aggressive approach to addressing the issue of of of of unfair appraisal values and historically red line neighborhoods, because those have been one of the greatest drivers of wealth theft that we have seen in our state's history. and so making historic investments in being able to train appraiser is historic investments in being able to come up with fairer values for people inside of homes and neighborhoods and making sure that we can address the housing issue and the housing c something that that focuses on or screens either displacement or gentrification or welfare. and so it's something we've been very deliberate on. but i think a key lesson learned going back to how montgomery county looks at it versus how the eastern shore will look versus how western maryland will look at it is you have to be just very deliberate and very

regional in the way these things are focused to have the kind of progress that that we're looking for. governor berman, a fantastic discussion. i want to just add one general point in here. when i because i don't know greg's doing this in montana, but when i hear about us trying to solve the issue, you know with zoning should as in america, we invented zoning. and zoning came during the industrial revolution when there was a lot of like air pollution. other things say, hey, we're going to have the factories here and the people here and we've got to keep them separate and then we went even further and said, well, here's the kind of homes that can be in retails. there. and we just you know it was a one dimensional map and you draw it out and say, everyone, all these things have got to be separate. and yes, we that was great for it. that was great for people that built roads and is great for for the companies. and then we built a city that's designed we built cities all over america that are designed for automobiles, are not designed for people. and then if you take a look at your cost and anybody that's been a mayor like spencer has been the cost of running a city is the linear feet of everything. it's a linear feed of sewer and

water and siwa and then when you get more of that, you need to have more fire stations. and then you've got school districts that independently decide to build greenfield elementary schools out on the edge. and that's great for the developers. so you drive all this linear cost is the cost that infrastructure and tina mentioned never mentions the cost of this. you know, how do we pay for the sewer and water? well, when sometimes when we're doing that, we're making developers rich and we're not helping the people, the workforce that we're trying and so one of the things that is changing in some cities around code is form base code, which is if you're building one of these nehoods, instead of saying, oh, you can do up to 20% in low income, if you got if you have a neighborhood, that's all houses. if you want to have a coffee shop that looks like a house you should be able to have a en people say, hey, i leave my starter home, i want to move to a new home. it's got to have three cars, three car garage wise, you have three car garage because got a car to be able to drive to school, drive the church drive to a restaurant, drive to a grocery store. of course, you need all that because you can't walk to anything. and part of then people will you know, they'll go in and vacation and they'll say, wow, that was the most amazing

vacation ever had. why? well, because we were we went to someplace where we could walk and everything was right there. well, you can actually have that in our own states. you just have to design it. and i think that we've got to make sure that we're not using the success we're having at the state level to subsidize bad design, which then down the road, ten, 20, 30 years from now, when people say, hey, we've got these new forms of of transportation because of new things, have new designs of, you know, electric bikes which become, you know, four seasons and do and we've spent all of our dollars building roads and we haven't sent you know, there's places in northern europe that have snow where people bike all winter long. you can't hardly you can't find a place like that in the u.s. because we don't put the investment into building the infrastructure for multi-modal transportation. so i think one of the things in this country, our housing costs are high, in part because of the way that we've designed our cities. and i think there's, again, this form check out form based code. there's some really interesting things that are there. and this and you guys talked

about beginning the granny flats and other stuff, buts we've got to get the coffee shop. the barber shop and law firms back into residential neighborhoods in ways that can help lower the cost and create services where you don't need a car for everything. very powerful vision. governor burgum. yes. put it in mickey from rhode island. thank you, spencer, for pointing out at home ownership needs to be part of island, we put 25% of our arpa funds towards housing in my second budget, that was 250 million. we're approaching. $500 million for rental, primarily rental low and moderate income right now. so in a state our size, that's a pretty sable number, $100 million we going to have in the ballot this year. and we're looking at really looking at homeownership and creating that that workforce or that career path housing. so we'd like to compare notes. i've announced we're going to do it, but i don't know how we're going to do it yet. so i got another vote. i got about i0 days to actually figure out how we

make that presentation. but i love the kind of, you know, we'll get with you on that. i was a former mayor as well so we put the in law, you know, housing in, you know, 20 years ago, my and my mom lives in an in-law apartment in a house that we built about 15, 18 years ago. so that works in a way think is really important. i think that it was mentioned by the panel up there and also the issue i'd like to ask greg, you know, you said you moved your available apartments from about 1% to 6%. can you tell us how many units there is. i mean, we're we're last year on home ownership, i put 30 million into to create the, you know down payments for homeownership. we did about 160 of rhode island as a result of that. in one year and still waiting list on that. but how many units did you need toe it from a 1% to a 6%? yeah. so that data came from a study

that was done bn the city, in the city of missoula which is one we don't have any big cities or as are former u.s. senator used to say, the you know, you could used a lot of dirt between the light bulbs so you could outside here just to give you a perspect if you could get in your car outside this building and drive to chicago, you're still in montana. that's how big it is. so missoula is a community of. , 50,000 people. and if you google missoula apartment vacancy story was about 60 days ago that that reported that and that was also the report that showed that the rental rates had come down by 20%. so that's that's one community that had impact from all the things that we did. yeah. and that's a key. are our about 100,000 people.

billings is number one. yeah. missoula is one of our university towns. but yeah and that's, that's a key piece in that number to move to from that. that's very impressive. you want 1% to 6% and lower the rentals by 20% on that. so we'll follow up on that number because we one of the concerns i have is actually overloading the market. we've seen that in our state where we drive prices down. soosing a lot of the equity that they built up over a period of time. so there's got to be a sweet spot in there. yeah. and we have not seen we've seen a leveling off of home values. we've seen rental rates come down. we haven't seen actual home prices come down yet. we are running short on time. i want to go to governor kotek of or the final governor remarks and then back to charlie to the question i kind of posed to charlie in a moment will be what have we not said that we should be talking about? so what else should be in the suite of things that you haven't heard today? you governor polis i really enjoyed this conversation.

a couple of things. marvelous, topical, i think the the balance of two mandates and incentives. our zoning what happened in oregon prior to me coming into the legislature this is many years ago, we actually outlawed inclusionary zoning. so when we tried to put it back as a as a and as an option for communities, we had so much pushback that we had to actually write into law all the criteria you would use. and it made it very rigid. so it was voluntary but too rigid. so just, you know, i think we all have to be careful. one of the reasons that when it came to the middle housing law in oregon, people are like, make it voluntary. and i went with cities over a certain size have to do duplexes where they would normally just standalones 25,000 and higher population have to include the other types of mental housing. the reason for that was i didn't want to see some communities saying, well, we're not going to change and others changing because you were going to have a

significant equity issue right off the bat and. so and people got there. they still have local variation but everybody should be trying to provide different options. and i want to challenge all of us. i love the idea starter homes because then people can take advantage of the number. one investment in our power in our country for housing, which is the mortgage interest credit. you own your home, you get a big tax break, but we should have smaller homes that qualify for that duplexes as homeownership opportunities, townhomes. because because in places where you don't have a lot land, we got we got to think differently about it. so so many options. i hope you're successful. ownership really matters. it really does. but what that ownership like, i think we have to change. that's a great idea. and along those lines we're doing we're tryin accessory dwelling units buy, right? but a next phase of that would be an automatic way to subdivide and sell. so somebody not just for rental,

we affordable units for rent but also what a great starter home if you subdivide what are we what haven't you heard charlie, that you would like to hear lot really great ideas and a lot of great leadership. so thank you. one thing that hasn't come up as much as parking, i think it's just an easy thing to miss. but parking is expensive especially free parking. and so, you know minneapolis, i mentioned they got a bunch of apartments, build saw rents come down in real terms, even while other cities saw rents continue to rise. and a lot of that was because they built apartments along bus rapid transit lines. and they said, well, a lot of folks would be taking the bus. we don't need as many parking spaces. they still had parking spaces, but they just didn't have the minimum number. they would have been required to have previously by a parking minimum. that didn't make sense for those buildings. so it's just a thing to consider the only other thing i'll say is, and this relates a little bit to governor burnham's point, governor moore, his point is there's so much path dependency in like what our built environment looks like that people don't think about and so it seems like people are choosing a certain option when

actually they're not being provided choices that they would choose if they were there. and i think you have to concile all that with the fact that people don't like change in the abstract. right. but then if you build them the community with the coffee shop, they can walk too. it doesn't mean they're not can have a car, of course, to get in the car, but they'll walk to the coffee shop more and they'll feel good about that like they would on that vacation. community. you know, and i think people don't think about the fact that a lot of this living with because it's always been that way. and when you make those changes and provide those options, it's actually quite popular. and so don't mistake the sort of initial brush with reality that governor cox was describing that a lot of you face with how that will play out over the long term, because i think you see over and over again when people make progress on this issue they're rewarded for it. both a better community and by people who say thank you. so thank you, charlie anderson for joining us. thank you to the arnold ventures. we appreciate your support both policy as well as on the nonprofit side for a lot of this important work. thank you to our fellow

governors. this was a wonderful exchange of ideas on an issue that i think for all of us is number one or perhaps a few of you number two issue, but a big issue for every single one of us. with that, i'll turn it back over to our chair, governor cox ank you so much. all right, ladies, gentlemen we're almost done. i do have to ask one question on this topic, though because doug, doug's going to make me do it. it's my favorite question to ask in a crowd like this. how many of you growing up walked to school, to the grocery store or church. one of those three? raise your hands. and look around the room at all those hands. how many of you walk to one of those places? now? okay. little more than i expected,cally. so i appreciate that. other thing i have to point out there was an editorial in the washington post just today that is titled build baby build governors take a walk on housing supply side with a beautiful

picture of our good friend wes moore. they're looking very dapper wes, i must say. and it's basically a review of all of our state of the state addresses that housing and so many of you are mentioned in there. if you get a chance to check it out. the last thing i have to say is just this. i hope we recognize how unique what just happened is in in politics in our country today. i don't think anybody could being in the room right now, if they didn't know who we were would have who was a republican and who was a democrat. i didn't hear one comment. we would have thought doug was a democrat for sure. the way he talked about that vision, i was like, doug for president, man. doug, i guess i have to let you respond. those were the rules of, the debate. so yeah. i believe in economics. there you go. i like that. i like that as well. trust the science, doug. listen i just i just i just want to thank all of you for

sticking around to let you know how proud i am to be associated with you. the greatest leadership in the country and in the world is in this room right now. we admire you. we appreciate your service, your dedication. i know it's hard on your families. we have a beautiful event tonight scheduled at the white house.