then. ♪ ♪ i don't >> owning your own home could mean security, joyful moments with family. >> fly all of this by about 50000. then you have the value of the home. >> too bad or our government moj keys with that by subsidizing home. >> it will not cost the taxpayers one extra cent. >> how d that work out. >> what are we doing now? the same foolish thing. >> don't have 20 percent to put down. put 3 percent down. >> when people have cool alternatives like these tiny homes and shared homes. and mixed neighborhoods.

>> bunch of white people move into the neighborhood and open up cupcake stores all over. >> home sweet home. that's our show tonight. >> you own a home or plan to we are told there are big advantages to home ownership. first they will make money. they say buying a home is the best invest. you can make. second it is good for the community homeowners care more about maintaining the quality of their neighborhood. tienl finally it is your castle you can do anything you want with your house. the landlord can kick you out. all of this is true. the problem is once our government thinks something is good the politicians think it is

their job to require it or subsidize it. they do. today 85 percent of american mortgages are guaranteed by the government your tax money. the fha, federal housing administration fannie mae freddie mac all put tax payer money is the risk by granting mortgages or buying them. these invite reckless behavior guarantees on top of politicians pressuring banks to long under served needy people they led to the last housing bubble. >> they owed more on their mortgage than the home is worth. >> incredible housing bubble they created. >> it was incredible a speculative frenzy. otherwise investors started saying housing prices can only go up the prices went up wildly until they didn't. the popping of the bubble is bad

lots of people lost lost of money. we learned something from our mistakes. at the tell them you only have to put 3 percent down. except actually government is now doing that again. a few months ago fanny and freddie after raising their minimum down payment to a measly 5 percent lowered them to 3 percent. are they crazy? a sensible congressman tried to get an answer about that from the administration's mortgage regulator. >> all things being equal is a 3 percent down low riskyer than a 10 percent down loan. >> that is generally true. when you tear the down payment with other compensating

factor,>> you believe 3 percent down is riskyer to the home purchaser than 10 percent down. >> if you carefully look at other considerations and take them into account. >> the man mumbling the answer is mel watt in charge of fan me may and freddie mac. you can be sure a 3 percent rohn is just as safe as a 10 percent down payment loan. >> a 3 percent down payment is as safe as a 10 percent one? how can that be? >> the secretary of housing would talk to us about the government's eagerness to give your money away. the former commissioner david stevens will. he says in two years serving under president obama he made the system safer. >> he studies for enterprise enter tut says we are on the way to another bubble. >> the government is doing the same thing that happened in the

early 90's which is saying let's loosen credit let's give loans to people who potentially can't afford them and everything will be fine because house prices will go up and we won't have the same problems we had before. that clip you had -- >> they don't promise they will go up any more. they are saying if we are careful it will be fine. >> on the careful point we have looked at the risk of the three percent down loans they have a higher risk than 10 percent down loans. it is exactly the opposite of what he says. >> david you ran this for a while. you did raise them a little bit. >> this is after the crash. >> we raised -- there has been a variety of changes in the program. i will say i agree with the premise. fha does riskyer loans than a lot of other institute investors. part of it is that this is the area of the market they serve. they have made changes. they have raised minimum credit score requirements. they have required 10 percent

down payments or larger if your credit score drops below 580 or 620 you start having impacts. >> if your credit is low you are a bad risk. you ought to pay 10 percent. people used to pay 20 percent. >> in most cases low credit store mean score means bad risk. >> if you are the mayor of a city are youhow are you going to get schoolteacher schoolteachers schoolteachers, firefighters to work in the community if they never are able to buy a home? >> maybe they will live with other people, share a home. people used to be schoolteachers and policemen in these towns. before the government jumped in. >> that's okay if you have a wealthy mom and dad. >> or share a home. >> the chairman's question, the committee hearing is that had 10 percent down payment is safer than the 3 percent down payment?

without question it is. does that mean we exclude somebody because they don't have a wealthy mom and dad or create rules where you say we are going to make it tougher on you but there are some people within that margin that can get access to home ownership. >> why is government even in this business? we used to have private banks that had their own money and they were smarter. it is a big risk but david is not. then if they were wrong they lost their own money p. >> we need to make certain as you put policies in place that provide housing for entry level home ownership middle class america. >> why is that a job for government? you are head of the mortgage banker's association. i say you are part of the revolving door serving government and make a lot of money. your group is spending 3 million last year lobbying for 3.25 million in 2014 it's like let the home builders and the mortgage bankers stand on their own. >> i think that is a great

vision. everybody would like to see private capitol lead the way. i would emphasize, john, if you want to look at what happened prerecession in the runup in the early 2000s there was a lot of romance they couldn't get enough of, stated income loans interest only loans. those weren't products with fha orphan knee may and-- fan menie mae and freddie mac. >> they lost their way because they used the portfolio to invest in mortgages. >> it is self serving saying government has to fund these loans? >> i would like to see as little government as possible get down to 0 if possible. the problem is, if you were to pull it away today house prices would probably drop by 30 or 40 percent. the solution in my mind is. >> we are already addicted to government. >> here's the current housing secretary one of the guys who

talked with us at a press conference in dc celebrating easy credit. >> fha has been a beacon of hope for under served borrowers. this means expanding access to credit. >> in other words, easy money here, you know, just here. tax payer go keep it. am i being unfair here? >> yes, you are being unfair. it is notten or nothing. we need them to finances $1 trillion in mortgage capitol. the banking system doesn't have the capitol under the current restrains of mortgages. >> the government attitude is not unique to president obama. they want more people owning

their own home. here is president clinton. >> our home ownership strategy will not cost the taxpayers one extra cent. >> how many cents did it cost? >> fanny and freddie -- they were bailed out in 2008 to the tune of $180 billion. fha lost a couple million dollars and the world economy was brought to its knees and financial system was cratered. >> i do not dispute that but it wasn't solely the responsibility of those institutions. however they participated in it. >> in america we get clothing and cars and music and movies without government involvement. >> it is a lot easier to finance a couple$00 for a stereo than it is to finance a couple00,000 for a home. it requires some sort of lending vehicle to allow someone to get home ownership.

it is good for the economy. i would challenge most of the employees of this company own a home probably have it on a 30 year mortgage. >> they have to borrow from a bank not the tax payer. >> canada pretty much does that. the rules are much less liberal. you have to refinance your mortgage every five years much less government participation? there's more home ownership in canada than in america. >> get out. go away. why do we need you for all of this liberal lending that we have done in throwing money as you have demonstrated we haven't moved the needle. all we have done is more speculation and we haven't put more people to homes. >> thank you ed david. i am sorry for my rudeness to you. you have been a good sport. >> one argument is it is made in the interest of america for government to encourage home ownership not just because it is good for community and stability

but owning a home is such a good investment for people. people in tv are always saying that. >> i have always been raised to believe if you should own it you should own it. >> people think i have to buy that house. >> they don't know much. even in america's most successful investors said this. >> going to live the next five or 10 years i would buy a home and finance is with a 30 year mortgage and it is a terrific deal. >> so tomorrow morning run out borrow money and buy a home. no, don't. financial writer why not. >> 150 years of home price data on nationwide average home prices going back to the late 1800's. home prices from 1890 to 1990 were flat after when we take out inflation. they were flat. they did nothing. it has been the last 20, 25 years america's got this impression the homes were going to go up in price year after

year. >> because for 25 years they have been. >> they have done so as well especially true in the early 2,000s. >> this is the best investment? >> shallow thinking. >> for years it was. not just for two or three years but 20-years. it created this impression. >> no one remembers back then. there's nothing that shows us we should expect home prices should go up above inflation. i think most are doing the right thing it gives you stability for your family a great place to live a place to raise your kids. it is not something you can own and say i am going to cash it out and it will fund my retirement. >> there are all of the tax benefits are you including them. rent is seems like you are paying more money down the drain. >> a lot of people love mortgages they can write their interest off their taxes.

that is true for a lot of people. to take the mortgage interest you have to itemize your tax deductions. if you are on the lower income side you are taking standard deduction. >> most people don't itemize. >> roughly half of homeowners will itemize their tax deductions and get any benefit. the other half that doesn't get any benefit a lot of them think they do. they say i love my mortgage i write off my interest. you didn't get to write off anything. paying rent? >> 60, 70, 80 percent of your monthly at the same timepayment goes toward interest. fm you have a mortgage during the first few years most of that is just interest. you are effectively renting money from a bank. >> after the crash gallop poll what's the best long-term

investment? real estate on top. gold hasn't done that well. stocks 24 percent. savings account 14 percent. bonds 6 percent. people still believe. >> no one wanted anything to do with stocks after the crash. trillions of dollars of wealth was vab brated. after that you see the polls huge portions of people in the united states believe their house will make a long-term investment. they hope you will keep up with inflation and nothing else. >> thank you for joining this discussion. follow me on twitter and use the hash tag house rules or like my facebook page then you can post on my wall. tiny homes cheap and maybe illegal. also homes that you can share.

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♪ john: many people who travel woul >> people who travel would like to replace the hotel for the more home like ex peer yes or nos if you could. now you can thanks to home

sharing companies like rumor ama and biggest air b and b. >> anywhere you want to go the states you want to be there and choose from thousands of places on air b and b you can book and stay in any one you like all for a price that suits you. >> part of a new sharing economy. they advertise homes and extra rooms like web sites or room awe ramah tourists shop the listings and pick homes to stay in instead of hotels. this mother and daughter who wanted to visit new york city found an apartment where the owner also fixes them breakfast. >> being in the city with a child is much more convenient. his breakfasts are amazing. we are able to use the fridge. we have a microwave. fresh hot coffee. >> i will make it. >> not only did they save money but she gets a hug from her

host. >> enjoy. >> they have home sharing they have 6 million users. when there's a new idea some people say you have to stop that or at least regulate it. >> air b and b are operating with essentially no regulation there has been prostitution, drug use. >> hookers are home sharing says the new york post. there are other hero stories. that's why a leader at the coalition of political officials activists and hotel executives call the share better coalition wants to restrict room sharing. why? >> hookers using room shares. >> there are 10,000 listings for residential units in san francisco on air b and b and room awe ramah that cater to

tourists. we are chasing the worse housing crisis since 1906 and the great earthquake. two-thirds of listingings are full-time listings. they are units apartments they are condos homes they are in some cases entire apartment buildings that are offered to tourists on a full-time basis. they have been legally converted into hotel rooms. >> so what? >> they are empty somebody wants to use it. >> they were built for long-term units. it was illegal to p rent to tourists for less that #than 30-days that's the case in most cities around the country. >> that is just you control freaks trying to restrict free people's choices. >> that's not true. we are looking to look at the availability in san francisco as other groups around the country and around the world and looking at protecting the residential.

>> how much would you like to see in your neighborhood? would you like somebody in your building renting to a tourist every night of the week so there was a different type of stranger. >> that's an issue for me and my landlord. that is not for the politicians to decide. the landlord can look at that. >> we have got a lot of tenants who have been doing this in san francisco without the landlord's permission. >> the landlord can evict them. >> we have had a number of evictionses. they are converting them illegally. let's talk about the notion of sharing. nobody is doing any sharing. money is changing hands. middle men are taking fat commissions. >> i think a lot of people are very happy with this. >> nobody is doing any sharing. >> the customers are happy. most of them. >> the customers are happy and the hosts are happy as a general

rule but other tenants in the building other condo owners in the building. other neighbors in the neighborhood are not happy. zoning says there are specific places set aside for specific uses. commercial activities like hotels don't be long in residential neighborhoods. we are not looking to ban this. if people want to rent an extra room in their home if people want to rent their home for a few weeks a year while they go on location we can accommodate that. we are after thousands of units renting to tourists ohhen a full-time basis that aren't regulated but aren't paying taxes that are unavailable to long-term residents. >> you want the tax money 14 percent in san francisco even higher in new york. thank you dale carlson.

coming up, would you want to live in a home this small? some people do so they do it illegally. let me talk to you about retirement. a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro you just don't know.

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♪ ♪ john: homes keep getting more expensive. >> home the keep getting more expensive. stupid government rules. another reason is people keep building bigger houses. 40 percent of new homes have four or more bedrooms. average square footage is nearly doubled since i was a kid. all of that is fine with me if people can afford it and want it. but what if you can't? what if you want to lower your carbon footprint or make for a smaller house. people who built these houses in washington, d.c. do. each house costs less than 50000 dollars. they have wheels so they can double as mobile homes. more homes like these would allow more people who can't afford homes now to buy thoms and they take up less space so what a wonderful idea except for

america's zoning laws. the owner of one of these homes says. >> it is totally legal to buy one of these and to washing it somewhere and becomes illegal potentially illegal once you step inside and say this is my home. >> that was janey austin. he joins me now. it is legal if you kept it on a trailer but once you park it it is illegal? >> correct. off the trailer the house would be illegal on the trailer the house is illegal. >> you said what the heck i went ahead and you are living there so you are illegal. >> it is a risk i was willing to take. i think a 30 year mortgage for a house i can't afford is a risk as well. >> you built four homes and some are happily living there.

yours cost 50,000? >> probably under that. some of the off grid appliances. that is about 35, 40000. some are as little as 10,000? >> number hmmm. >> we have pictures showing the inside. your house is 144 square feet. that's enough? >> oh e-definitely enough for a kitchen seating area and sleeping area. >> why is this illegal? >> a lot of outdated zoning back in the day maybe there were families trying to live in houses that were a little too small for that number of occupants. my making it illegal they forced the family to live in a home they can't afford or to be homeless. >> they have been doing this for a decade already and they haven't made changes.

>> right. >> not all politicians are idiots all of the time. our former mayor in new york michael bloomberg when he wasn't trying to ban soft drinks guns proposed sensible things knowing that in new york we often pay several hundred dollars per month for studio apartments. the mayor said this. >> he waved zoning and density rules for micro apartments. boomers micro apartments are 260 square feet which makes them bigger than your house which is about half that. why is it considered micro? >> even though they are huge developments we don't have any ability for a small do it

yourself builder to build their own home. >> do people walk by your neighborhood and knock on the door? >> we have donemany tours and concerts. >> the city actually released a new ordinance that would prohibit camping in any of these houses. so up until that point we said we are not living here full-time that would be illegal we are camping in these houses. in many cities that is illegal. you can't sleep in your car so you can't sleep in a home that is on wheels. >> what's going to happen? >> we will find out. >> i wish you luck and i should say over crowding was one of the reasons politicians sited for creating these rules but isn't that up to us if we decide how much of a crowd we want? >> jay austin thank you. coming up debate a democrat who calls gentrification a cancer.

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♪ ♪ john: sometimes i think that no matter what good >> sometimes i think no matter what good things you do liberals will still tell you ushyou are wroj. decades they say neighborhoods are segregated because rich white people don't want to live with mixed racial neighborhoods. times have changed. some rich white people want to move into poorer non white neighborhoods because they like the idea of diversity or cheaper real estate. are the liberals finally happy? no, now they complain about gentrification. they put the stickers suggesting gentrification is racist. in when parts of new york came liberals protested and riots broke out. they called it a night of rage. the battle between yuppies and

hippies. the battle is made in many parts. >> stop packs breaks for yett question developers. >> gentrification is violence. lots of people say that. u.s. congressman jefferies called gentrification a cancer. congressman you are from brooklyn where there is a lot of gentrification gentrification. >> if you this i about what it does it ravages a neighborhood consumes it and moves on to the next neighborhood. i refer to socio economic gentrification there by pushing out working families middle class folks, senior citizens poor folks, artists young college students starting out. >> the study of the states found no evidence of displacement of no income, low income non white

households and gent fying neighborhoods. >> you can take some of the neighborhoods i represent they could rent a two-bedroom apartment for less than $1,000. right now in many of the neighborhoods you find a 2 bedroom apartment you could rent for less than 3,000 dollars. >> spike lee agrees with you. he compared gent fooiers to christopher columbus who came to america to you can't do that. >> can't do that? >> can't is a dangerous word that suggests you politicians get a right to say no you may not live there.

>> i am not of the view you can't tell any one not to live in a particular neighborhood. they have widespread diversity they value in look brin new york. >> we have to more aggressively promote the policies for affordable housing. >> this is how a comedian identified it. >> they white people move in and open up cupcake stores. >> i haven't seen a syringe in three years. >> you don't have to carry a club when you go up the stairs. you have to beat your way up to the aapartment. >> they feel safer. bring on the hipsters.

gentrification is good for the poor. the average income of black people with high school diplomas soared after gentrification. >> i would be map pee to take a look at it. comedians with comedy public officials in public policy in sen pral brak lynn. decades ago they were ravaged by the crack cocaine wars. you have people who stay work hard got involved turn the neighborhoods around and if they didn't own properties they were renters they find themselves in a situation where they are unable to stay as things change and get better and better public safety and amenities and restaurants. you have individuals who become victims of their own success. i don't think that is fair in america. >> if you want to help the poor people you want to get rid of

the mortgage deductions on taxes for a house because that helps rich people. >> is it if you think about how. >> almost all goedz to rich people. >> if you think about the transition from working class poor into the middle class home ownership is essential. as that transition takes place you have more americans benefitting from this. we have more renters in new york city than owners. you better do a better job with affordable renters opportunities in new york city. >> more sub citied des for renters and keep the mortgage deduction. >> i am not saying more subsidies. if you are going to get tax breaks and invent vise development seems to me you have an exchange of public benefit that should take place. >> thank you congressman

jeffers. >> thank you very much. >> i say let's free people wherever they want. what do we do about the homeless? where will street people go? we cover that next. in a work, work, work world... take time for sunday. just know that your truck... has a little thing for monday. ♪ [upbeat music] ♪ defiance is in our bones. defiance never grows old. citracal maximum. easily absorbed calcium plus d. now in a new look.

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♪ ♪ john: homelessness continues to

be >> homelessness continues to be a significant problem in parts of america. politicians say government must come to the rescue. >> number one, we need more shelters. >> more shelters. they want more of what they call affordable housing plus free housing for the truly needy and lots of programs for street people. >> enough money to build 45,000 homes at 200,000 dollars a piece. >> that's a lot of money. don't we need to do more for the desperate people on the street? especially get them housing. >> well, john first of all i wish we could retire the phrase homelessness. it suggests these radio people that were housed and subject to a hurricane and they lost their

home in a natural disaster. many of peas theme have -- >> you figured out -- >> i recall. i recognize the elegance to it. it is not like your average homeless guy. >> it has become a lifestyle choice. >> the people that are truly there. >> a lifestyle choice. >> not a good life. >> if you like a lot of buzz and drugs you get people that give you money and that is what the money goes for immediately. >> i should say i once in denver offered 12 people holding signs would will work for food gave them a bus token and job offer. many studies show the people begging on the street are often hustlers. >> some of them are there because we everyone teed the

mental -- emptied the mental int tugss and they would otherwise be receiving mental treatment. they need help because they are incapable of maintaining a job that would keep a house over their heads. >> the mentally ill chemically abusing whether alcoholics or drug addicts. if you have a raul they have to stay off the street maybe it is worth it. i would say get some treatment. then you have a whole other category in new york above all else of single mothers with children. and they also get to claim the man tell of homelessness. they are usually living with their own single mother or friends. they say it is too crowded i want my own home. >> they get to call themselves homeless. they give themselves a free government apartment is completely wrong.

>> they do get to be first on the list then if they are a single mother and i hear mayor de glassblasio is you tell ping them in lots of homes where they don't work and they get stoned all day. >> thinkey get priority for public housing and section 8. also you would say it is hard to untangle the web of government suck sid de. it is a complicated system. it looks like the better solution is public housing where as you might say the better solution is the market the free market. another thing that alcoholics used to have in the 1920's was very inexpensive so-called cage housing on skid row. that was before regulation came in and said no if you are going to offer housing it has to be x square feet with private bathrooms and whatnot. that priced out a place to get off the streets. >> for a buck a night.

>> right. that is now illegal. you can't do that. >> they were lousy places but they were better than people living on the street. >> on the street which is not just bad for the people on the street it is also bad for cities. at the least we have to have a rule. if we are going to ask government to provide free housing on demand to people as we have in new york, you don't get to sit on -- lie on the street and colonize public spaces. >> and to prevent lying and on the street and colonizing the public space a lot of business owners are putting little spikes up which here is the headline spikes mental studs treat the homeless like animals. >> they are trying to maintain some public order. it is not unreasonable to expect the city sidewalks are free and clear workers getting to their jobs to feel safe for business owners not to have to clean species and crack needles werefrom

their stoops in the morning. it is the worst but last possible solution when you have public order that is broken down. >> thank you, heather mcdonald of the manhattan institute. coming up a better way to capri ate affordable housing. t. the pressure. the bloating. get gas-x. it relieves all those symptoms in minutes. that's why it's the #1 gas relief brand.

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>> whiche need affordable housing. >> affordable housing. the activists who hear the most about it are often the ones who do the most to keep us from that. they are the central planners who want to stop apartment owners were offering a i fordable houseford -- affordable housing. they are the anti gentrification politicians who push rules and make it harder for people to live where they want to live. they are the zoning zealots who declare it is illegal to live in little homes like these. they impose so many rules every house costs more. harvard study found that cities with topugh zoning rules make it time consuming to build they increase the cost by 46,000 dollars. washington, d.c. former director of planning>> i hate to make

houston the whipping boy. that's a place that doesn't have zoning. it doesn't have regulation. it is not exactly the full flower of urbanism. >> excuse me. she may not find houston a full flower of urbanism but fewer rules in houston mean that if someone wants to turn their house into a little store like this person did, they can. you can build tall buildings next to shorter ones. they even allow someone to build a house on a beer can. the result lack of zoning. many papers call houston the best city to live and work in. the big real estate web site says the average price of a two bedroom house is 3200,000 dollars in washington it is almost 600,000. zoning isn't the only reason for the price difference that are other factors.

heavy regulations are a big part. even president obama seems to get that. >> let's bring together cities and states to address local barriers that drive up rent for working families. >> let's address the local barriers allowing people to build little houses like these. the problem for politicians is addressing local barriers really means get rid of necessary barriers and rules. politicians and planners rarely want to do that. they are not in the getting rid of business they are in the regulating more business. the more rules they pass the more self important they feel the more power you have. you want to build something you better first come here and kiss my rate. many learned that takes lawyers and paper works and fixers. even then the contractors have to wait 30 years to get permission to build. that is why housing is expensive it is not because of greedy

landlords or home builders or gentrification it is mostly because of politicians. that's our show. see you next week. you next week. >> it is a terrorist army and a savage march. but who is isis? they combine viciousness on the ground with a supremacy of social media. >> trying to create the largest caliphate it can. >> it spread even further to libya where they beheaded 21 christians on the banks of the mediterranean sea. what do we know about the man wearing a wrist watch who says he is the rightful... >> a shadowy presence for long. >> how he is using a former catholic student from the boston area to spread propaganda. >> why do you think they keep attacks of terrorism. >> it controls an