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>> a bunch of white people move to the neighborhood and open up cupcake stores everywhere. john: -- liberals object to the alternatives. home sweet home. that's our show tonight. ♪ ♪ >> and now, john stossel. john: do you own a home or plan to? we're told there are big advantages to home ownership. first, you'll mange money, they -- make money. they say buying a home is the best investment you can make. second, home ownership is good for the community because homeowners care more about their schools and maintaining the quality of their neighborhood. finally, it's your castle. you can do whatever you want with your house no landlord can kick you out. all good things for the homeowner if true. the problem is once our government thinks something is good, politicians usually think it's their job to require it or

subsidize it. and they do. today 85% of american mortgages are guaranteed with by the government your tax money. there's the fha, the federal housing administration, fannie mae and freddie mac all of them put taxpayer money at risk by granting mortgages or buying them. and these guarantees invite reckless behavior. the guarantees on top of politicians pressuring banks to loan to underserved needy people led to the inflated housing prices that led to the last economic bubble. >> the housing bubble burst. >> they owed more than a their home was worst. >> this incredible housing bubble that we created. john: it was incredible, a speck la tuf frenzy. otherwise smart investors started saying housing prices can only go up. we can only get rich issuing more mortgages, and the prices did keep going up wildly. until they didn't. the popping of the bubble is

pretty bad. lots of people lost lots of money, but at least we learned something from our mistakes. government no longer guarantees loans to people with poor credit telling them, hey, you only have to put 3% down. except actually government's now doing that again. a few months ago fannie and freddie after raising their minimum down payment to a measly 5% lowered th again to 3 president. are they -- 3%. are they crazy? a sensible congressman, jeb hensarling, tried to get an answer from the administration's new mortgage regulator. >> all things being equal, is a 3% down loan riskier to the taxpayer than a 10% down loan? >> i would say, mr. chairman that that is generally true, but when you pair the down payment with other compensating factors -- >> do you believe that 3% down

is riskier to the home purchaser than 10% down? >> if you carefully look at other considerations and take them into account -- john: the man mumbling an answer is mel watt. he's now in charge of regulating fannie mae and freddie mac. >> then you can insure that a 3% loan is just as safe as a 10% down payment loan. john: really? a 3% down payment is as safe as a 10% one? how can that be? neither mel watt nor the secretary of housing would talk to us about the government's eagerness to give your money away, but we're fortunate that former fha commissioner david stephens will. he says in his two years serving under president obama he made the system safer. but not safe enough, says ed pinto, who studied housing risk for the american enterprise institute. he says we're on the way to another bubble. >> the government is once again doing the same thing that happened in the early '90s

which is saying let's loosen credit, let's give loans to people that 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 -- john: they don't promise they'll go up anymore, but they're just saying if we're careful, it'll all be fine. >> on the careful point, we looked at the risk of the 3% down loans, i they actually have much higher risk than the so % down -- 10% down, so it's exactly the opposite of what he says. john: david, you ran this for a while. you did raise them a little bit. this was after the crash. >> yeah. we raised -- there's been a variety of changes in the program, but i'll say at the outset i agree with ed's premise. fha does do riskier loans than a lot of other institutional investors in the marketplace. part of it is that is the area of the market that they serve. but they've made changes. they've raised minimum credit score requirements, they require

10% down payments or larger if your credit score drops below 580, actually below 620 you start having more impact. john: so if your credit score is really low you're a bad risk. people used to pay 20%. >> in most cases low credit score means bad risk, in most cases. john: so why have the taxpayer lend the money? >> the problem is if you're the mayor of a city, how are you going to get schoolteachers police officers firefighters to work this those communities if they're going to be never able to buy a home? john: maybe they'll borrow from their parents, share with other people. people used to be schoolteachers and police officers before the government jumped in. >> it's great if you have a wealthy mom and dad. there is absolutely clearly, the answer to the chairman's question, hensarling's question in that committee hearing is a 10% down payment safer than the 3% down payment, yes.

without question it is. but does that mean you should just exclude anybody simply because they don't have a wealthy mom and dad or do you create rules that say look, we're going to make it tougher on you, but there are some people within that margin that can get access to home ownership. john: why is government even in this business? >> why is -- john: we used to have private banks that had their own money at risk, and they were much smarter about knowing ed's a big risk but david is not. and then if they were wrong, they lost their own money. >> we need to make certain we put policies in place that provide housing for entry-level home ownership, middle class -- jon john but why is that a job for government? you're now head of the mortgage bankers' associate. i say you're part of the revolving door. [laughter] your group is spending three million last year lobty bying for housing -- lobbying for housing. >> not that much. john: 3.25 million in 2014. let the home builders and mortgage bankers stand on their own. >> look, i think that's a great

vision, and everybody would like to see private capital lead the way. i would emphasize john, if you want to look at what happens in pre-recession in the 2000s, it was a lot of program that is wall street and the private sector couldn't get enough of; stated income loans interest-only loans. those weren't products of fha or fannie mae and freddie mac -- john: the private sector knew they could produce garbage because the government would buy it. >> yeah, that's where fannie and freddie lost their way, because they used their portfolio to invest in those mortgages, and that's why they're in conservatorship today. john: ed, isn't it self-serving the say the government funds these loans? >> yes. i would like to get it down to zero, if possible. the problem is if you were to pull out away today -- pull it away today house prices would probably drop by 30 or 40%. so the solution in my mind is -- john: we're already addicted to government. >> we are very addicted. john: here's the current housing secretary, one of the guys that

wouldn't talk to to us, at a press conference in d.c. celebrating easy credit. >> fha has long been a beacon of hope for underserved borrowers. this means expanding access to credit. i don't know john in other words -- john: in other words, easy money here, you know? just here. [laughter] as a taxpayer oh, keep it. [laughter] am i being unfair here this. >> yes you're being unfair. john: why? >> because it's not an all or nothing. this isn't the kind of issue where you say you're either all in or all out. this isn't the government's or the private sector's role. they both have to play a large role, and we need the kind of liquidity that finances a trillion dollars in mortgage capital in this country and quite frankly, the banking system doesn't have the capital under the current restraints for mortgages -- john: because government has tied them in knots. the government's loose money attitude is not unique to president obama. president bush said we want more people owning their own home,

and here's president clinton. >> our home ownership strategy will not cost the taxpayers one extra cent. finish. john: so, ed, how many cents did it cost us? >> well fannie and freddie were bailed out in 2008 to the tune of about $180 billion. fha lost a couple of billion dollars and the world economy was brought to its knees, and the financial system in the united states was cratered. john: do you dispute this? >> i definitely do not dispute that, but it wasn't solely the responsibility of those institutions. however they participated in out. john: in america we get clothing and cars and computers and music and movies without government involvement. why does housing have to have it? >> well, it's a lot easier to finance a, you know, couple hundred dollars for a stereo than it is to finance a couple hundred thousand dollars for a home. it requires some sort of lending vehicle to be able to allow people to get home own

errship -- home ownership. and by the way, john, i would challenge most of the employees of this company own a home, probably have it on a 30-year mortgage -- john: yeah. and they had to borrow from a bank, not the taxpayer. canada pretty much does that. in canada the rules are much less liberal, right? you have to refinance your mortgage every five years, much less government participation. there's more home ownership in canada than in america. >> yeah -- john: so get out go away! why do we need you for all of this liberal lending that we've done? throwing money as you've demonstrated, we haven't moved the needle. all we've done -- john: more speculation. >> drive up prices and we haven't put more money into homes. john: thank you, ed. david i'm sorry for my rudeness to you, but you've a good sport of that. one argument made in defense of david's point is it is in the interest of america for government to encourage home ownership not just because it's good for the community and

stability, but because owning a home is such a good investment for people. people on tv are always saying that. >> i was always raised to the believe that if you can own it you should own it. >> people think as soon as i get out of college, i've got to buy that house. john: okay, they don't know much but even america's most successful investor said this: >> i knew where i was going to want to live the next five or ten years, i would buy a home, and i'd finance it with a 30-year mortgage. it's a terrific deal. john: so tomorrow morning, run out and borrow money to buy a home. no, don't says financial writer morgan housel. why not? >> we have 150 years of home price data on nationwide average home prices going back to the 1800s. when you look at that long history, home prices from 1890 to 1990 were flat after -- when you take out inflation. they were flat. they really did nothing. it's really been just the last 0 or -- 20 or 25 years that americans got this impression that homes were going to go up

this price -- john: because for 25 years they have been. >> right. that was especially true in the early 2000s when we had this huge run-up -- john: so all these people think this is the best investment? >> well, you know -- john: shallow thinking. >> for years it was. not just for two or three years, but for 20 years. john: for 80 years, it wasn't. >> right, but no one remembers back this en. there's nothing that shows us home prices are going to go up above the rate of inflation. that's not anti-home ownership. i think most people are doing the right thing because a home gives you stability for your fam ily, a place to raise your kids. what it doesn't do it's not something that you can own today and say i'm going to hold this for 20 years, cash it out, and it's going to fund my retirement. that's what we have no historical backup on. john: there are tax benefits, are you including them? rent, it seems like you're just paying more money down the drain. >> a lot of people love mortgages because they can write their interest off their taxes right? and that's true for a lot of people.

it's not true for everyone because to take -- john: not true for poor people. >> it's especially not true for poor people or very rich people, because to take the mortgage interest deduction, you have to itemize your tax dedicks. if you're on the low -- deductions. you do get -- john: most people don't itemize. >> it's roughly half of homeowners will itemize their tax deductions and get any benefit, but the other half a lot of them think that they do. and when you talk to them, they say, oh i love my mortgage because i can write off my interest. you find out no, you don't. you don't get to write off anything. john: and paying rent, i throwing money away? >> in the early years, 60, 70 80% of your monthly payment goes towards interest. so when you're renting, a lot of people say you're throwing money away. if you have a mortgage, most of the first few years is interest. john: and yet even after the crash gallup poll, what's the best long-term investment? real estate on top and then

gold weirdly, which hasn't done that well. stocks 24%. savings account,. >> -- savings account, 14%. people still believe. >> when we had the dot.com bubble in stocks, after the crash no one wanted anything to do with stocks. but with real estate even after this crash where millions of americans lost their homes trillions of dollars of wealth was evaporated, even after that you see these polls, and huge portions of people in the united states still believe that their house will make the best long-term investment. over the long run what you should expect is your home will keep up with inflation and probably nothing else. john: thank you, morgan. to join this discussion, please follow me at fbnstossel, use the hashtag house rules or like my facebook page. you can post on my wall. coming up, tiny homes. cheap and maybe illegal. and also homings that you can share. -- homes that you can share. >> on air b air bnb.com, you can book

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♪ john: many people who travel would like to replace a hotel for a more home-like experience if you could, and now you can. thanks to home-sharing companies

like roomarama and the biggest, air b air bnb. >> whether where you want to -- whether where you want to go. on air bnb.com you can book and stay in any one you like, all for a price that suits you. john: it's part of the new sharing economy; people advertise their homes or extra a rooms on web sites like roomarama or airbnb which stands for air bed and breakfast, tourists 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 because not only is his breakfast is amazing, we are able to use the fridge, we have a microwave, fresh hot coffee -- >> ooh, i'll make it. john: the girl gets a hug from her host. >> enjoy your fries.

>> so lots of people love the home-sharing companies. airbnb has more than six million users. but whenever there's a new idea, some people say you've got to stop that or at least regulate it. >> airbnb is operating, essentially with no regulation. there has been p incidents where there's been prostitution, drug sale, drug use. john: and that has happened. hookers are home sharing, says the new york post, and there are other horror stories. orgy meth addict and so on. it's the reason why dale carlson of san francisco, a leader of the coalition of political officials, activists and hotel executives called the share better coalition wants to restrict room showering. room showering. sharing. why? there aren't that many hookers using room shares. >> no, but there are about 10000 listings for residential units in san francisco on airbnb and roomarama and 60 other web sites that cater to tours and

that's a problem because we're facing the worst housing crisis in the history of the city, or at least since 1906 and the great earthquake. two of thirds of the listings on airbnb are full-time listings. they are units, apartments, condo, homes, they are in some cases entire apartment buildings that are offered to tourists on a full-time basis. they've, essentially been illegally converted into hotel rooms. second -- john: so what? they're empty somebody wants to use it. >> they were built for long-term tenants and in san francisco up until february it was illegal to rent to tourists for less than 30 days in a residential unit, and that's the case in most cities around the country. john: but why? that's just you control freaks trying to restrict free people's choices. >> that's not true at all. we are looking to protect the availability and affordability of housing in san francisco as other community groups are doing around the country and around the world, and we're looking to protect the residential character of neighborhoods.

john: how would banning -- >> how much commercial activity would you like to see in your neighborhood, john? would you like somebody in your building representing to a tourist every night of the week so that there was a different set of strangers rolling in the hobby, or rolling down the hall -- john: that's an issue for me and my landlord, that's not for the politicians to can decide if there's too much traffic in my building. the landlord can police that. >> on airbnb -- we've got a lot of tenants who have been doing this in san francisco without the landlord's permission. john: so the landlord can evict them. >> and we have had a number of evictions. john: so fine -- >> landlords converting apartments illegally to short-term rentals for tourists. and let's also talk about this notion of sharing because nobody's doing any sharing. money is changing hands middlemen are taking fat commissions. people -- john: i think a lot of people are very happy with this. >> nobody's doing any sharing. john: but the customers are happy. most of 'em. >> the customers are happy and

the hosts are happy as a general rule. but other tenants in the building, other condo owners in a building, other neighbors in the neighborhood are not happy. john: so you want -- >> i think they deserve some consideration. zoning says there are specific places set aside for specific uses. you know, commercial activities like hotels don't belong in residential neighborhoods. and here's one other thing that i wanted to say, we are not looking to ban this activity. 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 vacation, we can accommodate that. what we're after is the thousands and thousands and thousands of units that are rented to tourists on a full-time basis that aren't regulated that aren't paying taxes, that are unavailable to long-term residents. john: you want that tax money, the hotel tax is 14% in san francisco, even higher in new york. thank you dale carlson.

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space. so what a wonderful except for america's zoning laws. in washington the owner of one of these homes says -- >> it's totally legal to buy one of these and to park it somewhere and really only becomes illegal once you -- potentially illegal once you step inside and say this is my home. john: that was jay austin. he joins me now. so it's legal if you kept it on a trailer, but once you park it, it's illegal? >> yes. correct. off the trailer the house would be illegal. on a trailer, the house is legal but i become an illegal occupant of my own house. john: and you said what the heck, you're living there and you're illegal. >> yes, correct. john: and you're aware they may prosecute you? >> i am. it's definitely a risk that i was willing to take. i think a 30-year mortgage for a house i can't afford is a rusk as well. it seemed an appropriate risk. john: there's a group of you, you built four homes, and some

are happily living there. >> uh-huh. john john they cost -- yours cost $50,000? >> probably under that. some of the off-grid appliances definitely -- john: this one? >> yeah, that's my house. that's about 35 40,000. john: and some are as little as 10,000? >> yeah, definitely. john: full functioning a bathroom, kitchen? >> uh-huh. john: and we have pictures shoowing the inside. your house is 144 square feet. that's enough in. >> oh definitely. enough for a kitchen for some seating area for some sleeping area -- john: so why is this illegal? >> a lot of outdated zoning. back in the day maybe there were, you know, some families trying to live in houses that were a little too small for that number of occupants, but we just force that family to live in a home they can't afford or to be homeless. john: and washington is actually rewriting its zoning code -- >> it is. john: but politicians, they've been doing this for a decade

already, and they haven't made changes. >> right. john: not all politicians are idiots all the time. our former mayor here in new york, michael bloomberg when he wasn't trying to ban soft drinks guns, cigarette smoking proposed some sensible things knowing here in new york people off pay several thousand dollars per month for studio apartments. the mayor said this: >> we have a shortfall now of about 800,000 homes, and it's only going to get worse. john: so he waived zoning and density rules to allow an experiment in micro-apartments. they're being built now. but bloomberg's micro-apartments are 260 square feet which still makes them a lot bigger than your house which is about half that. >> correct. john: so, i mean why is 260 square feet considered micro? >> it is smaller than what we're used to, and even those developments, those are huge development cans. we don't have any ability for a

small, do-it-yourself builder to build their own home. john: do people walk by your neighborhood and like, knock on the door -- >> oh, definitely. we've done many tours, mini concerts a lot of free book readings just events to show people the spaces, kind of educate -- john: what's going to happen? you're going to be kicked out? >> this summer the city actually released a new ordinance that would prohibit camping in any of these houses, so up until that point we had said we're not living here full time because that would be all legal, we're merely camping in these houses. laugh and in many cities that's illegal outright. you can't sleep in your car so you can't sleep in a home that's on wheels. john: what's going to happen? >> we're going to find out. john: overcrowding was one of the reasons politicians cited 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, i'll debate a democrat who calls gentrification a cancer. thought i

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♪ ♪ john: sometimes i think that no matter what good things you do, liberals will still tell you you're wrong. for decades they complained that neighborhoods are segregated because rich white people don't want to live in racially-mixed neighborhoods. and sometimes they had a point. but now 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. so are the liberals finally happy? no now they complain about gentrification. one put these stickers on businesses andtrified parts of austin texas suggesting gentrification is racist. when parts of new york began to gentrify in the '80s liberals protested, and riots broke out. "the new york post" called it a night of rage, a battle between

yuppies and hippies. the battle continues today in many parts of america. >> protesters came with several signs expressing how they feel. some say gentrification is violent -- >> stop tax breaks for wealthy developers! john: we should, but gentrification is violent? lots of people say that. u.s. congressman hakim jeff race calls gentrification a cancer. congressman you're from brooklyn where there's a lot of gentrification. that's a cancer? >> if you think about what a cancer does, it ravages a neighborhood neighborhood, consumes it and moves on to the next neighborhood, and i refer to socioeconomic gentrification which relates to dramatically increasing housing prices thereby pushing out working families, middle class folks, senior citizens poor folks, artists, young college students starting out. john: the census data found no evidence of displacement of

no-income, low-income non-white households in gentrifying neighborhoods. >> i'm not sure who was the author of that study, but in new york city it's pretty clear. you can take some of the neighborhoods that i represent in fort green and clinton hill and bedford five about is where just a decade ago you could rent a two-bedroom apartment for less than $1,000. right now in many of those neighborhoods you'd be hard pressed to find a two-bedroom neighborhood that you could rent for less than $3,000. john: spike lee agrees with you he compared gentrifiers to christopher columbus who came to america to -- >> can't come in with people -- [inaudible] for generations, and you come and [bleep] can't do that! [applause] john: can't do that? can't suggests you politicians get a right to say, no, you may not live there. >> i'm not of the view that we

should tell anyone that they can't live in any particular neighborhood. what i'm saying is that we've got to make sure that we do everything possible to preserve the widespread diversity that we value in places like brooklyn, new york. we want to be able to preserve that -- john scwn and what should government do to preserve it? >> well the one thing that i think we have to do is more adepressly promote policies for the creation and preservation of affordable housing. john: i'd call gentrification progress. here's how comedian michael shea joked about it. >> we don't know what gentrification means, it's a bunch of white people who moved to a [bleep] neighborhood and opened up cupcake -- how has this changed? >> i haven't seen a syringe in three years. >> you don't have to like carry a club when you go up the stairs. you used to have to beat your way up to your apartment. john: those people are happy. they feel safer. bring on the hipsters.

gentrification is good for the poor. the average income of black people with high school diplomas in gentrifying areas soared after gentrification. >> well, you know, again i'm not sure of the methodology of that particular study. i'd be happy to take a look at it. but comedians do comedy, public officials do public policy in central brooklyn. decades ago in the 1980s these were neighborhoods that were avenue amed by the crack cocaine wars. you had people who stayed worked hard, got involved, turned those neighborhoods around and if they didn't own property, if they were just renters, they now find themselves in a situation where in many instances they're unable to stay as things change, as the school gets better, as there's better public safety, as you've got amenities and restaurants and stores. and you've got individuals who become victims of their own success. i don't think that's fair in america. john: if you want to help these poor people, i assume you want to get rid of the or mortgage

deduction on taxes for a house? because that overwhelmingly helps rich people. >> well, i support the mortgage deduction on home ownership, because we should be promoting home ownership. john: but it almost all goes to rich people. >> well, if you think about the transition from being working class poor into the middle class, home ownership is essential. and so as that transition takes place, you have more americans being able to benefit from the mortgage deduction. we've got more renters in new york city than owners, so we've t got to do a better job of fostering affordable renters opportunities -- john: more subsidies for representers -- >> well, i'm not saying -- john: -- and keep the mortgage deduction? give money away? >> not at all. if you're going to incentivize development if you're going to give tax breaks, it seems to me that you've got some exchange of of public benefit that should talk place. john: thank you congressman

jeffries. >> thank you very much. john: i say let free people live wherever they want, but end then what do we do about the homeless? where will street people go? we cover that next. two weeks later. look, credit karma-- are you talking to websites again? this website says "free credit scores." oh, credit karma! yeah it's actually free. look, you don't have to put in your credit card information. whew! credit karma. really. free. i've got a to-do list and five acres of fresh air. ♪ ♪ happiness is a drive-over mower deck. [ male announcer ] that's how we run, and nothing runs like a deere. ♪ ♪ how can i help my daughter with her reading? [beep] searching for help with dachshund breeding. no! let me try. sara's bright, but when she's reading she has trouble sounding out words. [beep] playing world music. [music] what? i give up. [beep]

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be a significant problem in part of america, and politicians say government must come to the rescue. >> number one yes, we need more shelters. john: more shelters. liberals also want more of what they call housing plus free housing for the truly needy and lots of programs for street people. >> spend about $2.9 billion on over 20 programs targeting homelessness. technically enough money to build 145,000 homes at $200,000 apiece. john: that's a lot of money but don't we need to do more for those desperate people on the street? and especially get them housing? no, says heather mcdonald who researches this at the manhattan institute. no? >> well, john, first of all, i wish we could retire the phrase homelessness, because it suggests that these are people that were housed and subjected to a hurricane, and now they've lost their home in a natural

disaster. in fact many of these people, as you yourself experienced have made -- john: so you figured out that was actually me -- >> i recall, i recall the -- and i recognized the sort of certain joie de vivre and elegance to him. it's not like your average homeless guy. john josh street people. and it's become a scam in many cities. >> it has become a lifestyle choice. >> so but the who are -- john: a lifestyle choice. it's not a good life, begging. >> well if you like a lot of booze and drugs, you get people that give you money and, of course that's what the money goes for immediately. john: and i should say i once in denver offered 12 people who were holding signs "will work for food" gave them a bus token and a job offer. they didn't show up. many other studies have shown that these, the people actually begging on the street are often just hustlers. >> right. they're hustlers. some of them, of course, are there because we did empty the

mental institutions, and they would otherwise be receiving mental treatment. john: and they need help. >> and they need help. because they really are incapable of maintaining a job that would keep a house over their heads. john: so the new word is get 'em homes. >> the mentally ill chemically abusing whether they're alcoholics or drug addicts if you, if you have a rule that they have to stay off the street maybe it's worth it. i would also say though get them treatment. but 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 mantle of homelessness. and they are usually living with their own single mother or with friends x final hi they say -- finally they say it's too crowded, i can't take it any longer, i want my own home. and they get to call themselves homeless. given a free government apartment is completely wrong because it's going to act as a magnet for more single mothers

and more people demanding free housing. john: and they do get to be first on list then if they're a single mother. and i hear mayor de blasio in new york is just putting them in lots of homes where they don't work and they get stoned all day. >> well, they get priority for public housing and then they get priority for section eight. obviously, you as a libertarian would say it's very hard to untangle the web of government subsidy. so it's a very complicated system right now, you know? it looks like the better solution is public housing whereas you might say the better solution is the market the free market. you know, another thing that alcoholics used to have in the 1920s was very inexpensive so-called cage housing on skid row. that was before regulation came in and said, no, if you're going to offer housing it has to be x square feet with private bathrooms and what not. and that priced out a place to get off the street -- john: for a buck a night.

>> a buck a night, right. and that's now illegal. you can't do that. john: and 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's also bad for cities. at the very least, we have to have a rule. if we're going to ask government to provide free housing on demand to people as we have in new york, you don't get to sit and lie on the streets and colonize public spaces. i don't know john and to prevent -- john: and to prevent lying on the street and colonizing public space a lot of business owners are putting little spikes up which, here's a headline spikes, metal studs treat the homeless like animals. >> well, they're just trying to maintain some public order. it's not unreasonable to expect that city sidewalks are free and clear for people workers getting to their jobs, to feel safe for business owners not to have to clean feces and crack needles from their stoops in the

morning. and this is sort of the worst but last possible solution when you have public order that's broken down. john: thank you heather macdonald, of the manhattan institute. >> thank you. john: coming up a better way to create more affordable housing. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ great rates for great rides. geico motorcycle see how much you could save.

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so...you're sayin' you'll give me my credit score for free... right! now you're gonna ask for my credit card - - so you can charge me on the down low two weeks later look, credit karma - are you talking to websites again? this website says 'free credit scores'. oh. credit karma! yeah, it's really free. look, you don't even have to put in your credit card information. what?! credit karma. really free credit scores. really. free. i could talk to you all day. >> >> we need more affordable

housing. >> affordable since the housing. >> affordable housing. john: but those that topped the most are due the most to keep us from having a. bear the central planners want to stop apartment owners from offering of rates that people can afford or the identification making it harder for people to live for the want to live his doting zealots who declare it is illegal to live in little homes like these and they oppose so many rules and every house cost more. harvard study found cities with tough zoning rules make it so time-consuming and increases the cost of a typical house by $46,000. complex zoning rules cause of affordability and others are central planners like this woman in washington d.c. here she is mocking

houston. >> i hate to make houston the whipping boys. >> go-ahead. >> but they don't have zoning or regulation but it isn't exactly the full flower of urbanism. john: excuse me 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 allowed someone to build a house out of beer cans and as a result has directed many papers call them the best city to work and live in as much more affordable housing the average price of the two-bedroom house and use it is 300,000 but in washington d.c. and visible 600,000.

there are other factors but heavy regulation is a big part even president obama seems to get that. >> to bring together cities and states that drive the trend for working families. john: let's address those barriers that means allowing people to build little houses like these. but the part problem for politicians that means getting rid of the unnecessary barriers. politicians and planners really want to do that they are not in the getting clinton did of business but getting more and then the more self important they feel in the more power they have. if you want to build something you better come here to kiss my ring. in many cities builders have learned that takes lawyers the and paper work even then the contractors have to wait two years just to get permission. that is why housing is expensive.

not because of greedy landlords or gentrification mostly because of politicians. that is our show. see you next week. great sunday. >> >> have a great sunday. see you next weekend. i'm chris wallace. the latest on the german plane crash. and iran's influence spreads across the middle east. but is the obama administration fighting against iran or alongside it? >> we have put intense pressure on extremists inside of yemen. and it has mitigated the threat they pose to the u.s. and the west. >> our closest allies in the region no longer trust us. they believe that we are siding with iran. >> as the white house presses for a nuclear deal with iran, is the middle east on the brink of regional war? and what is the u.s. strategy? we'll ask the former director of the defense intelligence agency lieutenant general michael flynn.