eyes with regret. >> mitch albom, thank you so much. >> sure. thank you. >> that's great. >> all right? >> thank you so much. >> my pleasure. ♪ new york mayoral candidate jimmy macmillan said it, but it didn't make him mayor. he closed his pitch, simply, the rent is too damn high. young families, middle class workers, head into the rental market and find prices driven up by lack of availability or

luxury they can't afford. is the rent too high where you live? rent too high, why? it's the "inside story." ♪ welcome to "inside story." i'm ray suarez. the bursting of the real estate bubble and the great recession sent shocks into the housing market that are still with us today. owners who lost their houses become renters by the thousands. owners trying to sell and recover their equity, found markets frozen, and started renting their properties because they couldn't unload them. incomes grew grudgingly in the years of the slow recovery of the job market, so people reaching ages where they might have imagined buying homes are still renting.

buying a home felt risky. that's one set of variables. in specific markets the number of young people grew faster than the population over all. and in someplace where new units were coming online they catered heavily to one end of the market, high-end renters looking for luxury units. and all of those variables hitting different metropolitan areas in different ways, and you get a mess. in the eight years from 2005 to 2013 the percentage of people in their 30s who are renters soared. in these same years, people in their 50s who are renters rose 6%. the percentage of renting households is the highest it has been in 30 years, and the number of renter households is expected to rise in the next decade or so

by more than 4.5 million. and rental homes aren't just apartments in large multiple dwellings. apartments are roughly 30% of the market with single-family detached hopes just behind. and the price is rising as is the percentage of the household income devoted to rent. harvard estimates that half of all renter households are moderately or severely burdened by the cost of rent, meaning they pay more than 30% of their income to rent alone. what is going on in america in general, and in overheated urban markets in particular. is the rent just too damn high? joining it seems to me a reporter from the "washington post," an associate proor of social science, and author, and

director of financial regulation studies at the cueto itse itself -- institute. large numbers of new or rehab units are going to be needed in the next couple of years, in the millions. is anyone going to build them? >> will anyone be allowed to build them in i think it's important to not just talk about city centers, but we are really talking about a regional housing marketing crisis, and that large areas of these regions are off-limits to new construction, and so there really won't be space, and even the great housing programs which are being developed in new york or san francisco, they can't have the impact they might because they are only maybe half of the population, and much less of the

land area of a big region. so we're talking about a regional market failure that really can only be addressed maybe at the state or county or a much wider broader area, so it will be difficult to deliver units for people in those metros. >> emily when the professor uses the word can't, is that really the right word? they can't build them? why not? >> i think part of the problem is that demographics has changed rapidly, and it's just not possible even if developers had the will and financing to build as much housing as we're talking about as quickly as we need it to. but there are a lot of restrictions we put on building new houses, inside cities themselves that have made it a lot harder to build the kind of housing we were talking about, relative to what -- what could have been built 30, 40 years ago.

you know, these restrictions that make the form of all kinds of regulations, requiring developers to build parking garages, because we want them to add more parking, even if the people don't have cars, the neighborhood opposition, not in my backyard attitude of neighbors who don't want to have new buildings built in their neighborhoods, that drags out the process, and made it a lot harder. so i think it's true when developers argue that it's really hard for us to build anything these days other than luxury high-end renters, because nothing else makes sense to them. >> i know you are not given to being a big fan of regulation. but regulations didn't come out of thin air. many of the restraints put on builders in the second half of the 20th century were put on because of the rough lessons we learned about the way people die

in fires, the way a substandard construction leads to rapid deterioration of properties. we learned bad lessons, we put in a set of regulations that drove up the cost of housing but also extended the longevity of that housing didn't it? >> it did. some of it is trying to make housing safer. and that's straightforward. some of it is the uncertainty, so in many parts of america just because a particular lot is zoned a particular way, it does not mean that you are entitled to build there. in many parts of the country there is a referendum that must be had in terms of what kind of housing can be there. so you developer, you meet these rules, and you can build. and it doesn't mean that you have got to pay off these council men or shop it around to

a hundred different people in the community, but that you meet the rules and you are entitled to build. for instance, the actual cost of construction in a place of phoenix is not any higher than it is in a place of san diego. but why is san diego so much more expensive? the land price. the entitlement process. but it's pretty much a rounding error in the problem we're facing today >> if you go too far west in san diego, you reach a place called the pacific ocean where you can't build anywhere. >> it sure is. >> and there are not such limits put on phoenix. i hear the regulatory argument, professor, and my -- my -- the hairs on my old urbanite back of my neck start tingling, because

that's often the excuse that are given. the unit profit is higher. the return on them is quicker. you can understand why they want to, but that's not necessarily mar cat -- market rationality. there is somebody that would rent that building at a profit. >> that's true. but if we look at that there are -- in almost every let's say suburban area, you were spauking about the sprawl in phoenix, less so. there is regulation and the nimbyism in terms of let's say the suburbs. in new york you have the major who is basically one of the most pro-affordable housing people and moderate cost, really, housing is what they are building, and then you have in west chester county, whose

leader has billed himself as onty affordable housing. so you have to be able not just build housing in concern locations, but you are going to have to build it more densely, there is regulatory structure that prevents that. and a lot of the residents don't want that. >> that's where we'll pick it up when we come back. is the rent too damn high? stay with us. it's "inside story."

>> the only live national news show at 11:00 eastern. >> we start with breaking news. >> let's take a closer look.

♪ >> you are watching "inside story." i'm ray suarez. we're looking at america's real estate market after the meltdown and at rental housing in particular. is the rent just too damn high? emily badger, nicklas bloom, and mark are still with me. and emily, are there other factors that enter into the equations that we're talking about, of race, of census tracks and zip cotes where peopling want to build apartment buildings and can't, and nearby census tracks where there is land but nobody wants to build it there. >> yeah, we have mostly been talking about supply, but a big part of the story has to do with demand. people specifically want to live

in a very small number of place. when we look across the country, there are cities like washington, new york, san francisco, seattle, where people are wanting to live and once they get to those cities they want to live near transit stops, they want to be as close to -- in new york or washington, a subway stop as possible. and a lot of the development is happening in a very small area of places. the mission district in san francisco is the popular spot where a lot of new development would like to go, if we were allowing more to be built, but all of the conflict is being driven by this rise in demand. the homeownership in america is about 5 percentage point lower than at the end of the boom. so if that pressure were evenly

distributed ash the country, we wouldn't feel it so much, but because it's heavily clustered in a small number of met palisti - -- -- metropolitan areas. >> if we could work out some of these regulatory problems that we have been talking about, would that necessarily mean that supply would meet demand better, or would we just stop the possibilities of some neighborhoods that we have seen rise in recent years? there are places that were sort of written off that are back part of the functioning urban tissue again, because demand gets forced to adjacent places, forced to places that were not considered before. >> the short answer is maybe, but let me say on the regulatory issue, i want to emphasize,

there is a ton of empirical work, there is really a lot of good science it's not simply mark doesn't like regulation. >> granted. >> but back to the demand issue, it really would depend on where it goes, so if instead of all of these businesses leaves california, and going to texas, if instead they were going to detroit, or cleveland, or buffalo, we would see a much different dynamic, but for the most part, and i think this is a really big problem, because somebody is far more productive in san francisco than they are in austin or detroit. so we are denying people to use their scales. but we're pushing them to texas or atlanta, and again, nothing against those places, but what i would say the problem is demand

isn't necessarily flowing to where you might want it to in terms of evening this all out. >> there is a social dimension to this as well, isn't there? when i was a young worker, and not making very much money, i could live in manhattan. now that i'm an old worker, you know, i can live in manhattan, but today's young workers can't. >> well, that's true. certainly the way our housing policies have worked whether the talk about our rent stabilization programs or mortgage interest tax deductions, we tend to reward people who are already in possession of the unit in terms of protection and regulation, whereas the newcomer usually faces a very difficult situation. and i would extend the argument that as people are renting later into their 30s, for instance, we also have to think more about schools and other playgrounds and other social facilities

which are not very often available in a lot of the sites that are -- that are open for development, and where do families want to be by and large? they want to be in the neighborhoods that have the better school districts, parks and so forth. so that, i think should really change -- renting has always -- well, since at least the 1940s in the united states, has been considered somewhat down on the scale of priorities, but now that renters and renting families in the middle class are becoming more common, would think we need to look at building rental housing where those families want to be, and that's in the high-performing school districts for instance. >> what could this look like? what should this look like when it gets where it's going? will young families, single workers, 60-plus people, be able to find a decent range of options at a price they can

afford?

♪ welcome back to "inside story." i'm ray suarez. new yorkers have thought so for a long time. >> i represent the rent is too

damn high. people working 8-hours a day, and 40 hours a week, and still need a third job. my main job is to provide a roof over your head, food on your table, and money in your pocket. playing the silly game. the people i represent can't afford to pay their rent. >> and rents in formerly distressed parts of brooklyn, queens and the bronx are getting rehabbed decades after people who could, fled urban decay. and even those rates are out of reach for people who have lived in those same neighborhoods for years. my guests are still with me. mark what would properly operating marketplace look like? if i made you the czar of housing, what would we have that we don't have right now? >> it would be a lot easier to

build. and a lot more certain to build, and at the end of the day, i think you would have more people living in the new york area, and san francisco area, where they would be more productive, be able to make more money, and wouldn't have to spend a lot on housing. there's no bigger expense for low-income families this is about almost half of their income. so one thing i'm sure, we know how to actually build housing that is affordable for middle-income people in america, and the question is are we going to be allowed to and be able to do it where it is needed? >> should part of the rational be removing regulations so the tax code would be neutral? >> yeah, that's a fantastic point. i wonder why have we made

homeownership a thing that everyone in america must aspired to, and if you are a renter, you are thought of as someone who hasn't achieved homeownership yet. and this is a destructive idea, both because we spend a tremendous amount of money on the home more age deduction, and also because for such a long time we haven't talked about rengers or the needs of renters, and that's something we're increasingly doing right now, and i think this is probably something that is never going to happen in washington, but thinking about really changing the home-mortgage interest deduction and not spending so much money on the tax code in helping people through homeownership. it would be a good idea to start thinking about ways that we should recalibrate our housing assistance, so that it's geared more tards the middle class, towards moderate income families

and more towards renters. >> are we europeanizing our cities? when i was a young guy working in rome, poor people traveled from far, far outside of the city to service jobs in the center, and rich people lived in the center, and then i came back to america, and, you know, it was all of the poor people in the center and the rich people out on he highways heading home or my commuter rail. are we -- when we look at the places that are tight and growing like boston, and san francisco, have we flipped our post-war model of rich suburbs in poor centers. >> well, to a certain extent that's true. we do have people in the new york metro area commuting from the poconos, and the big difference between europe and the united states is when you go to the suburbs of europe that's

where they state-subsidized housing. and it is still relatively close, and those countries have done a lot to develop mass transit to begin linking in this those developments. whereas what we have is large areas of disinvestment, and then an enormous suburban belt which is a no-go for moderate or affordable housing. in europe, people have to jump the entire suburban ring and pay a disproportionate amount of their income to travel to the center. america always does its own thing when it comes to housing and planning, but we -- and we may end up with the poor of middle class living very, very far away without the mass transit options. >> i was at an urban chief

executive's conference a couple of years ago. and one guy bragged to me that his board hadn't allowed a permit for a multiple dwelling in ten years. >> right. >> and people would be willing to live where they wanted to live where he was living. >> yeah, and it could be a very nice multi-family. >> i think that that's -- we have to change the conversation. it is so much that everybody says they want affordable housing except across the street. put it outside. like they do in paris, and we need to come to a recognition that you need to have mixed communities and have integration in a way that we don't have. and change the mentality, and it's often your single-largest investments, and it becomes this attitude that i can't let

anything happen that could undermine the value of my house. >> right. >> and again when they were proposing an apartment building in my neighborhood recently, despite the fact it lowered my house price, i wanted to say build it. >> emmy, you mentioned earlier that we haven't really taken account of what is happening right under our nose. one of the fastest growing forms of new household is a single person. and it's going to grow by millions in the coming years. >> yeah, i mean -- yeah, that means not only do we need to be building a lot of new housing, but housing of a type they we have not been building very much of for a long time. we have been building a none of single family suburban housing, but for young singles, and

professionals, we're talking about studios, and apartment buildings that could fit 200, 300 units of that size. and that is changing not only how we build but what we build. and these changes are going to take a tremendous amount of time. >> is this crisis going to be with us for a long time? very quickly? >> the success of the metros on the coast is not going to be resolved tomorrow. and it's not a problem that new york or san francisco has a cities, but as these mega regions. >> i want to thank my guests. that's the "inside story." join us tomorrow, when we report on the result of a new nation-wide pool of american muslims and their political attitudes. they have been talked about a lot during this presidential primary season, but haven't had many chances to speak for and b a themselves.

until then, i'm ray suarez. thanks for watching. good night. ♪ this is al jazeera america. live from new york city. i'm tony harris. a florida surprise? marco rubio predicts a victory while john kasich is trying to fight on trump. and a surprise announcement by vladimir putin. and an american reportedly hands himself over in iraq from isil. and a new species of