So as some of you guys know I took a trip to New York recently to be featured on a billboard in Times Square And I shot a dope video well at least I thought it was dope and during the time I was out there I knew they had a Nike store So you know I had to stop by and do a little bit of shopping But at the top of the store they had a Nike by you so you know what that means I had to get some kicks I recorded some of the process of getting the shoes created So let's go ahead and hop into the footage real quick and then I'll kind of narrate it throughout and show you What the shoes looked like at the end of the video This is a dream I've been waiting for I was sitting there meetings all the time talking about this back home. They never do it Come here we got all the options. So here in Portland. We have like none of these options It's crazy because I know we're the home of Nike and all those different things But at the same time we get no cool opportunities like this and I'll always talk about this when I'm in meetings With Nike and Jordan brand on how we should get more things like this into our city So again if you're from Portland or around the area in the Northwest keep telling everybody keep posting keep talking about it We need to raise more awareness because we need to have cool opportunities like this and it sucks But at the end of the day I saw the opportunity to do it in New York and I had to take advantage looks like screen prints two different shirts and stuff Right here all the different merch you can do and it looks like you can do patches on a pair of Air Force ones as well So these patches they got stitch patches They got look like some vinyl heat press patches And they got the more vinyls over here with the hang tags different laces Customs that go in there pretty simple process Definitely a lot of cool options right here back home in Portland. It's rough. It's rough for us So how does this process work? Yes, okay, so you can do apparel so t-shirts sweatshirts Okay, okay, each hit is like a price Okay And then you just run retail on the shoe, okay, I feel like I should do one I don't know. I mean these are the hits I could laser them when I get back home. Yeah, I could be dope Can you just like tatted up for me like creatively Only on the hill hits Nowhere else on the shoe though Okay, okay I was about to say just put them like all over the shoe. It's like front toe box Okay, okay, I got you so at this point I'm kind of overwhelmed because there's a lot of different options and we're in a rush I have somewhere else to be I haven't even ate yet And there's a lot of other things going on but either way we had to get it done. These all have New York based Things on there. I feel like we don't need to do something. That's OG with the force logo on there So we should probably go on New York stuff. What should we put on the outside on the hill? Brooklyn people rockin with the Brooklyn on the outside, okay Let's rock with the Brooklyn on the outside. Should we do that on both or just switch it up? What you think? Switch it up. Okay. We got Brooklyn and Harlem on the outsides. They do Queens and Bronx on the inside The only thing I don't like what they do with the money put the bronze on you can cut it off though Yeah, just cut it and just put Bronx. Let's do that. Okay, so and then we'll put this where she can Put the vision on the inside on the inside Okay, so we'll do this with would it fit with the Bronx? Like if you cut the and switch this It'll fit on the inside. Yeah, okay, so we could do it that way. I think that'll work. Hopefully it works out. We'll see We got to show them all the options right here. Did you show them everything down in here? Okay, so we got the lace options. I like the white laces honestly Although we got do we get one of these key chains to we got to get a key chain that goes along with it Yeah, yeah, so yeah, yeah, I'll get a key chain to go along with it though. That's something yeah They got the patches. Hey, this patch is hard. I always like this patch This one Yep, and then you got this one. Yeah, I like that one. That one's clean Yeah Pigeon one is dope too They got a lot of dope options up in here even the Prince with the tee Okay, so I got to get this I got to get the shoes done We're gonna go get something to eat because we got to make it on time for the billboard at seven So we got to still get back to the hotel. We still got to eat and we got to be on time. We can't be late We'll go Brooklyn Yeah, we can go Brooklyn on the right down probably look good and then Harlem on here and then We can do Bronx and pigeon on this side if it fits Yes, it fit. Oh, yeah, that's perfect. Boom Just like that on the inside and Then on this one we go Queens So we do another little thing with it or should we just keep it? What you think? The Queens one is kind of big the queue is good size. I think that's good. Yeah, which is the Queens on the inside right here Think that'll be smooth. Yeah, okay. Let's see what this one looks like this way though Like this yeah, that might be clean. All right. Yeah, let's do this on the outside. Yep Yep, and then we'll do Brooklyn on this way boom Queens on the inside. Yep, and then that one right there Perfect Way in there I had to do it I've been waiting we're coming all this. Oh, wait. I gotta make my Tiktok to you So I ended up shooting a couple tiktoks and then running downstairs to grab some food I grabbed a breeder real quick from spot down the street Honestly, it wasn't that good But I was hungry and I needed to eat something and I ended up getting back upstairs to get the shoes So let's go ahead and get back to the footage. All right, so we're on the first floor right now We got to get back up to the fifth floor We had to go get something to eat real quick, but the shoes should be done soon or now I don't know. We'll see so let's go ahead and see what we can find up there Perfect Thank you. All right, I appreciate it All right, let's look at these shoes real quick. We gotta hop in the elevator and we'll go downstairs We're doing elevator Follow me guys I know you can still hear me, but you can't see me but We got cell laces right here And then we got the shoes Oh, we got the shoes I'll show you guys when we get back home. So as you can see right here, you have your classic air force one box You pay retail for these. I think I got the receipt in here to show you the final price of everything And I think there's taxes and stuff too. So the shoes was 110 dollars Air force ones are 110 now. Damn. Okay. Um The custom work is 30 dollars and then I added two extra patches on there and a hang tag So it was three additional dollars per item So you had 110 30 3 3 and 3 the total was 149 taxes nine dollars and 77 cents And additional tax 81 cent for something else. I don't know and then that's some new york stuff right there And then the final price was 159 dollars and 58 cents. So that's what I ended up paying Final sale all sales are final all those different things now. Let's get into the shoes So starting off with the first accessory right here You have a nike gold hang tag which I did decide to add and then it comes complementary with a second pair of laces So I just went with like a sale kind of vintage wash kind of laced to that right there to add to these But honestly, I think I'm gonna just keep it clean with the all whites I don't really want to change anything up when it comes to that aspect So looking at the left shoe right here on the hill We took the bronx logo and cut the dub part off of there because it says dub bronx We cut that off and actually switched it up and added a pigeon right here In that place. So you got the pigeon reading the I think it's a magazine Yes, so just do it magazine or newspaper and then you got the bronx right there Just behind that and then on the inside of the hill We got the Harlem hit right here looking really clean. I like this font a lot I think both fonts honestly look really dope and represent new york really well So this is a nice clean look on the shoe and again, you guys have some detailed looks at it right there Just to show you how nice it is when it comes to the print I feel like they did a really good job on this and make it look like it was already on the shoe Next up right here on the right foot on the outside of the hill You have a brooklyn logo right here The font is similar to the one that you saw with the Harlem right there on the inside of the left foot right there So another clean look I really like that and then you got the queens Right here on the inside of the foot as well in a different font So I like how they had the different ones with the different fonts and the representation of the different burrows in the area So for me, I thought it was super dope to try to get as many areas as I could on the sneaker as they would allow me But I thought it would have been even doper if they would have let me do hits like Like I said in the video I'll just tad up the shoe like all over the toe box and different spots like this But unfortunately they didn't have the stuff to be able to do that So I understand why they couldn't do it because they wanted to make sure that it's simple and easy for everybody When they come in and they can just rinse and repeat for each person that's shopping with them So honestly, I think it was a really dope experience a nice subtle clean hit to the shoe Didn't take too long and it's a nice shoe to have in my collection for a nice id option So if you're ever looking for Nike by you you can do dope things on the website as well With customizing with different colorways and different things like that But when they have different pop-ups in different cities They also give you these exclusive options that you can only get in that area So to get different things like this and add it to my collection I know it may not be like all some resellable shoe or some crazy girl for everybody But it's always nice to have a little story piece and a time stamp shoe Something like this to represent, you know going on the trip being on the billboard different things like that Honestly, I like it. So let me know what you guys think about these down below in the comment section I hope you guys enjoyed this video And if you want to see any other things like this when I go out in the wild and shoot stuff I'll try to remember to keep the camera on so we can catch as much as I can And if not, I'll make sure I narrate as much as I can for you guys. So I'll see you in another one I'm out Yo, before you go, I just launched my sneakerhead academy where we got everything on the inside I teach you all the stuff that I learned over the past 15 years when it comes to sneakers scaling real estate You name it, we talk about all of it in there and there's an eight-week program plus a bunch of monthly giveaways I give away shoes literally way too much honestly, but either way I'll see you guys on the inside hit the link down below in my description or pinned in the comment section For dj sneakerhead academy and I'll see you guys over there


Hi, my name is Ashish and I make math videos at Khan Academy. And I'm here today because of this hashtag. Something remarkable is happening on YouTube this month. Check out hashtag mega-fave numbers. A lot of math YouTubers have come together to talk about their favorite math numbers greater than a million. If you haven't watched these videos, I highly recommend that you give them a try. I've been following some of them for a decade now and they've been my greatest source of inspiration. I invited us to participate and I couldn't stop myself from making a video. So let's get to the point. What's my favorite mega number? That's a really hard question. What's my favorite number? This isn't helping either. Well, what's my favorite thing about numbers? Aha! I love when numbers talk. I know it sounds silly at first, but numbers do talk. I've had so many interesting unforgettable conversations with numbers and I'm actually planning to bring one of them in this video. Okay, let's improve my question. What's my favorite conversation with a mega number? Well, my favorite conversation with a mega number is this thing. Okay, let me introduce my friend here. We have 2 decillion, 619 non-alien, 995 octalien, 643 septalien, 649 sextalien, 944 quintalien, 960 quadrillion, 380 trillion, 551 billion, 432 million, 833,049. The fact that this number has 34 digits isn't at all the exciting part. Every number is an answer to a number of questions and I think that these questions are what make the numbers interesting and a specific question that I met 7 years ago is the following. We have to find the smallest number made up of only 13s that leaves a remainder 1 when divided by 2013. If you want, you can pause the video and think about how to solve this problem, but don't worry about the answer. We already have that. Think about how you would approach this problem. Okay. Made up of only 13s, well, that means that the number that we're looking for has only 13 as its prime factor. We can write this number as 13 to the power n. Now let's look at this remainder business. Leaves the remainder 1 when divided by 2013 means that our number 13 to the power n is actually 1 more than some multiple of 2013. And to find the smallest number, we just need to make sure that the n sitting on top of 13 is as small as possible. We can give ourselves a round of applause here because now we're talking to this math question in a more mathy language.  We're now looking at this. We need to find the smallest number n such that this equation makes sense. A power of 13 leaves a remainder 1 when divided by 2013. Exactly the same thing, but in numbers and equations. Where do we go from here? The power of 13 is a little shy at the moment and that 1 in the corner isn't talking either. Let's look at 2013 for a moment. Forget everything else. Focus on 2013. Let's get familiar with this number before we try anything else. Now, 2013 is not prime. It's a multiple of 3. In fact, if we break 671 down, the 6 and 1 in the corner add up to the 7 in the middle, so 671 is divisible by 11. This is what we have. We have the factors of 2013 right in front of us. There are 3, 11, and 61. What's interesting to note is that we can use this information to move the conversation ahead. The number that we're looking at leaves the remainder 1 when divided by 2013. Think about it. Shouldn't it behave the same when divided by the factors of 2013 as well? Can it leave the remainder 1 when divided by 3 by 11 or by 61? Amazing. Huge progress here. Now, let's talk to each of these baby questions one by one and let's hear what they have to tell us. I'm going to start with the smallest number first. Which power of 13 leaves the remainder 1 when divided by 3? I know that the first power does, 13 by 3 is 4, leaving the remainder 1. And how do we deal with this nth power of 13? It's time to introduce a mutual friend here, who can melt this 13 into two parts, a multiple of 3, and a remainder. Any guesses? Introducing binomial expansion. Now I know there are other tools in the box that we can use to solve this problem, but I'm deliberately choosing the ones that you've seen or will see in high school math. This expansion of a plus b to the power n is as follows. Don't worry about the coefficients for now. Only focus on powers of a and b. See how as we move to the next term, the power of a goes down by 1 and the power of b goes up by 1. This means that the last term will have no power of a and a full blown nth power of b. Think about this for a moment. How can we use this to break 13 down into some useful values a and b? Ready? Here's the fun part. All these terms, except the last term, have at least one a in them. In other words, they're all multiples of a. Now let's look at the last term. ncn is 1, a to the power 0 is 1, and so all we're left with is b to the power n. Thanks to the binomial expansion, we can say that a plus b to the power n is actually a bunch of multiples of a added to the nth power of b. I like to clean the clutter by combining these multiples to form a super-multiple of a. Funny name I know. We now have something that 13 and 3 can use to talk to each other. Want to give it a try? Okay. We can write 13 as 12 plus 1, which means that 13 to the power n is actually the sum of a bunch of multiples of 12 and 1 to the power n. Now looking at this, what can we say about the remainder when we divide 13 to the power n by 3, not 12, but by 3? Well, what's a multiple of 12 is also a multiple of 3. 3 will eat away all these multiples of 12 and we'll be left with only this one hanging around by himself. And that's always going to be the case for every value of n. Wow. This statement is always true. We've made tremendous progress, but we still need to gather more clues about n to get to our favorite mega number. Let's try talking to the second equation now. What power of 13 gives the remainder 1 when divided by 11? Not 3, not 2013, but 11. Give it a shot. Don't hesitate to use what we just learned. Yep. I'm talking about a new friend binomial expansion here. Using the same logic as before, we can say that 13 to the power n is equal to some multiple of 11 plus 2 to the power n, but that's not the remainder. We need to go deeper. We need to talk to 2 to the power n now. Our immediate problem is to find the remainder when 2 to the power n is divided by 11. Not sure if binomial expansion would be useful here, but let's not lose hope. 2 is a friendly number. Let's try some powers of 2 and see what the remainder we get. These are the first 4 powers of 2, 2, 4, 8 and 16, the usual suspects. They leave remainders 2, 4, 8 and 5. Even the 5th power isn't useful. But let's keep going. More powers of 2 ahead. These are the next 3 powers of 2, 64, 128 and 256. And they leave remainders 9, 7 and 3. They're all giving different unique remainders, but there's no sign of 1 yet. I mean, where is 1? Presenting the next 4 powers of 2. And with that, some good news. The 10th power of 2 leaves the remainder 1 when divided by 11. Yep. Finally, we found one value, one power of n, that leaves the remainder 1. But what's really going on here? The next 2 remainders are the same as the first 2 remainders. What are these powers trying to tell us? Let's get to the bottom of this. Here's the first 40 powers of 2 divided by 11. None of them leave a remainder 0, as there's no 11 in them. But what's also interesting to note is that these remainders come in cycles. The first 10 remainders keep repeating themselves. What's going on here? I encourage you to pause and think about this for a moment. Well, let's come back to a lab and do an experiment. Let's break the 12th power of 2 as a product of the 10th power of 2 and the second power of 2. Now, we know that the 10th power of 2 will leave a remainder 1 when divided by 11. Now, let's multiply these two terms and see what we get. Expanding this way gives two terms. The first one is a multiple of 11, and the second one is just 2 to the power 2 again. We can now see why the 12th power of 2 and the second power of 2 were giving the same remainders when divided by 11. And this is true for any two powers separated by 10. 6th power gives the same remainder as 16th power, 26th power, and 36th power. This table makes total sense now. Beautiful. Based on what we're seeing right here, we can say that the n that we're looking for has to be a multiple of 10. To get that one remainder that we want, we're looking for an n that is a multiple of 10. Let's step back a little. We started by 2013, 3 didn't tell us much, 11 told us that n is a multiple of 10. I wonder what 61 will tell us. Are you ready for this? What power of 13 leaves the remainder 1 when divided by 61? And both 61 and 13 are scary numbers, I know. But we have come too far to give up now. The first two powers of 13, when divided by 61, give remainders 13 and 47. Not at all nice numbers, I know. And at this moment, you begin to feel that maybe this number doesn't want to talk to us anymore. And right when you're about to give up, this number whispers in your ears and says, Hey buddy, this is really going great. Why don't you try just one more time? So that's what you do. The third power of 13 is 2197. Now there are a lot of different ways to divide here. But since I'm not interested in the quotient, I'm only interested in the remainder, I'll try repeated subtraction for a change. Subtracting multiple of 61 from 2197 to shrink it down, that's what I'm going to do. 61 times 30 is 1830, and if I subtract that, we're left with 367. 61 times 5 is 305, and subtracting that, we get 62. I'm already getting goosebumps. Subtracting one more 61, we get the remainder 1. Yay, third time's the charm. The third power of 13 actually, luckily, gave us the remainder 1 when divided by 61. Using whatever we have learned about powers and remainders in this video, we can confidently say that there are many more powers of 13 that behave the same. Any guesses? You're right. The sixth power, the ninth power, the twelfth power, the fifteenth power, the eighteenth power, and every power of 13, that is a multiple of 3, will give the remainder 1.  And we can check that too. My calculator broke after the thirteenth power, but you can see that the first few powers behave exactly as expected. Remarkable. Alright, time to fit all the pieces together. The power of 13 that we're looking for should leave remainder 1 when divided by 2013. And we can guarantee that this will happen if it leaves the remainder 1 when divided by the factors of 2013. Now 3 doesn't have a lot of problems. But 11 wants n to be a multiple of 10, and 61 wants n to be a multiple of 3. And don't forget that we want n to be as small as possible. Let's give ourselves a huge round of applause because we're finally there. The lowest common multiple of 3 in 10 is 30. And that's our value of n. We finally did it, yay. The smallest number that's made up of only 13s that leaves the remainder of 1 when divided by 13 is 13 to the power 30. And that's my favorite mega number. Again, the number of the digits was not important at all. It was the composition that we had together which was important. And there's so much more left. What would have happened if in the last step we did not have 61 but some other number? What would have happened if we were looking for a different remainder? There were a number of places where our tools did not work. Are there better tools that we can use here? All of these questions and more.  But before you go, I'd like to ask you one last question. What's your favorite mega number? Thanks for watching. I hope you had as much fun as these numbers did. See you later.


Even if the science isn't there, why at least not try treating Alzheimer's with coconut oil? Well, unlike other natural remedies like the Spice Saffron, which was able to beat out placebo and seem to work as well as the leading drug without the side effects, coconut oil is one of the rare plant sources of saturated fat, normally only found in animals, which tends to increase LDL, a bad cholesterol, the number one risk factor for a number one killer heart disease. Hey, you want to try coconut oil on someone with Alzheimer's for a few days to see if it makes a difference? Fine, God, I'd try almost anything. But if, as expected, you don't see any improvement, I'd be hesitant to keep anyone on it long term. Now, those selling coconut oil say one needn't worry because coconut oil contains a saturated fat that doesn't raise cholesterol. You hear the same thing from the beef people. The National Candleman's Beef Association is always going on about how beef contains the saturated fat called steric acid. Unlike those evil saturated fats, pulmitic, meristic, and loric acids, which do increase blood cholesterol levels, steric acid has been shown to have a neutral effect on blood cholesterol. Now, see, that's true, and beef does contain steric acid, but guess what? It has twice as much of the pulmitic and meristic, which they just admit it does raise cholesterol. It's like Coca-Cola saying they know for a fact that soda doesn't make you gain weight because coke contains water, and water has a neutral effect on weight gain. Yeah, but that's not the only thing in it. And the same thing with beef, and the same thing with coconut oil. Years ago, I profiled this study that found that cholesterol levels were significantly lower during a coconut oil diet, but only when compared to a butter diet. You know you've got a problem, and the only way you can make your product look good is to compare it to diets rich in butter. Yes, it made bad cholesterol go up, but not as bad as butter, but how much is that really saying? Now, that was all the science we had for 10 years, but four new studies have recently come out, a population study and three clinical studies. The population was of Filipino women, and although those that ate the most coconut oil had worse levels of bad cholesterol, those that ate the most coconut oil were also more overweight, which alone can raise your cholesterol. When the fact that the coconut oil eaters were eating more calories were more overweight, when that was kind of factored out, the rise in cholesterol lost statistical significance. There's really control for factors, though. You've got to put it to the test. The first clinical trial involved giving people 2 tablespoons of coconut oil a day for three months, and their bad cholesterol went up a bit, but not significantly. During this time, though, they were all forced to lose weight by being placed on a calorie-restricted diet. When you lose weight, your LDL should drop naturally. The fact that it didn't on the coconut oil suggests an adverse effect. The most encouraging study was this one, an open label, meaning not blinded, no-control group pilot study, in which 2 tablespoons of coconut oil a day for a month added to their regular diet did not worsen their cholesterol. Though when tested in a better-designed study, a randomized crossover trial, coconut oil did significantly worse in bad cholesterol. Hence, what will its recommendation from Harvard? If you're going to use it, use it sparingly. Now, look, if you're eating so healthy that your LDL cholesterol is under 60 or 70, then it may not be a problem. Unlike saturated animal fats, coconut oil doesn't cause that spike in inflammation immediately after consumption of animal foods, which makes sense, because as you'll remember it, maybe the dead bacterial endotoxins in animal products ferried into the body by saturated fat that are to blame. In this study, for example, they compared the effects of chocolate cake made out of coconut oil, flaxseed oil, or cod liver oil on the effects on inflammatory markers. Not much change in the inflammatory gene expression for the coconut or flax cakes, but cod liver oil cake may indeed be worse.


Hey, Psych2Goers! Welcome back to another video. Before we start, we want you to know that we're very, very grateful for all of the love and support that you give us. Psych2Go's aim is to make psychology more accessible to everyone, and you help us do that. So, thanks again. Let's begin! Has a close relationship in your life ended because you've lost interest in them or they lost interest in you? Is there an important relationship you're worried might be in danger of falling apart because the other person no longer feels as strongly for you as they once did? Here are ten telltale signs that can help you figure out whether or not someone is losing interest in you. Number one, they talk to you less. Think back on your last few conversations with this person. Do you still talk to them as much as you used to? Or have you noticed them being a lot more quiet and reserved around you lately? When you're interest in someone fades, you feel less attached to them and less inclined to involve them in your lives. You stop telling them things, sharing news with them, or divulging your secrets with them because you just don't feel as close to them as you once did. Two, they act differently around you. Are they acting more distant and casual about your friendship? Or have they suddenly become polite and obliging, losing their usual sense of humor and playfulness? Another clear sign someone is losing interest in you is if they start to act differently around you. They can either be a bit more dismissive and aloof or awkward and tense. But either way, it means that something in your relationship has changed and they don't know how to be around you anymore. Three, they don't reach out anymore. When your friend or significant other stops making an effort to keep in touch with you, it means that they're no longer as invested in the relationship as they used to be. They don't text you or call you first, they never initiate contact or plan things for you to do together, and sometimes they even disappear for days on end without a warning or an explanation. Four, they stop asking questions. Have they stopped asking you questions about your day or how you're feeling? Has their attentive attitude towards you suddenly vanished into thin air? It's only natural to be curious and inquisitive about the people you're interested in or care about, whether it's your friends, family members, or romantic partners. So if someone special in your life has stopped asking you questions lately, it may mean that they no longer feel you're worth their time or attention. Number five, they're no longer responsive. How do they respond when you tell them about something amazing that just happened to you? You text them a long heartfelt message pouring out your feelings to them and they leave you on red. Wait, what? Were they a no-show at an important event for you? Sound familiar? A lack of responsiveness is a very telling sign that someone is losing interest in you. They don't return your calls or messages, they cut your conversation short, they answer you vaguely, and they always act like they're in a hurry to leave. Number six, they stop making an effort. When someone stops making an effort to see you and keep you in their life, they're sending you a message that they no longer want a relationship with you. They don't make time to see you or talk to you anymore because they aren't as invested in the relationship as they used to be. So if you start to feel that you're the only one holding on, it might be time to let go. Seven, they cancel and make excuses. Do they canceling you with the last minute and make excuses for it? This not only conveys a lack of respect and consideration, but also a lack of interest. So when someone often cancels on even the most important plans, despite the fact that you've repeatedly told them about it ahead of time, you know that they just don't care about you or your feelings as much as they do about their own fun and excitement. Number eight, they make other plans. Have you ever called up your best friend or significant other and asked them to hang out? Only to discover they've already made plans with someone else? Yikes. When this happens, it can be difficult not to feel hurt, jealous or betrayed. And while there's nothing wrong with spending time with other important people in your life, if this person is starting to make you feel excluded lately and leaving you out of all their plans, it may mean that they're no longer interested in you. Nine, they prioritize other people. Social media makes it easier to find out what our friends are up to when you're not with them. They tell you that they can't see you because they're too busy, but somehow they always seem to find a way to spend time with others. Just close to show maybe they no longer consider you an important person in their life. And ten, they found someone else. Does it seem like they enjoy spending time with someone else more than you? Do they look happier and have more fun with them than they do when you're together? It's painful to see the person we love, be it romantically or platonically, move on with someone else.  Having a relationship end is never easy, but you deserve to feel loved and appreciated rather than being in a one-sided relationship. Have you had to look over a relationship recently for the above reasons? Did you notice any of these signs around you? Share with us in the comments below. Also remember to like and share this video with those who might be interested. Subscribe to site to go and hit the notification button for more videos. As always, thanks for watching.


Good morning. This is the morning meeting of the House Appropriations Committee on March 31st and we're pleased to have as a guest this morning of Seth Leonard who is with the Vermont Housing Finance Agency and as members know that Mr. Leonard when we are doing the budget we are on such a sprint that we can it is hard for us to take the time to pause and really understand programs and and so that's what we're hoping in that you can help us with now that we're not sprinting said we're when she noted we're kind of walking and sitting and just help us understand the proposal for the so-called missing metal and what it will accomplish how you know the ends and outs of that. So I turn it over to you. Wonderful. Thank you. Thank you for the invitation to be here. It's an honor. And can't start without sharing deep gratitude and appreciation for all that you have done on an annual basis for the state of Vermont. But I know especially right now your jobs have been especially difficult. So thanks for all your hard work. And just to go through who I am again my name is Seth Leonard managing director of community development for Vermont Housing Finance Agency. I manage our lending programs in the multifamily and single family development side also asset management compliance and our research and communications and community relations departments as well. I have slides that I shared with the committee and I understand that you all prefer just to pull them up yourselves or look at printouts instead of me sharing screens. And to go through all those would be about 30 minutes. Is that is that an OK time frame or would you prefer me to condense that down to allow for additional discussion with the window you have 30 minutes is fine and we'll try to let you get through it and we'll hold some time for questions after. Okay. Great. And am I right that I will not share screen right you all have a copy of the slides. We all have our devices and I pulled up and I see a couple of my colleagues B H F A building access to home ownership. Perfect. Yeah. I'll reference a few graphs so that that's helpful if you have that handy. Yeah. So thank you very much. So I think most presentations and discussions usually end with resources and research. But I think a really important part of understanding this proposal is knowing that there has been a lot of work and time and thought put into and policy development conversations that support a number of the items in S 226 and many of the solutions and ideas didn't come out of thin air that thin air they were from measured pressures that we've seen in the housing market and from measured need that we've seen in the housing market for some time so you've got a list of those research pieces and slides and hopefully links to them but you'll see at the top is a housing needs assessment link. That told us before the pandemic set in in Vermont. We had 90,000 Vermont renter and homeowner households who are paying more than 30% of their income on housing costs. That's what we would call cost burden households and that 39,000 of those households or 16% of all Vermonters were paying more than 50% of their housing costs. So we had an affordability issue prior to the pandemic that's been exacerbated by the conditions inspired by the pandemic. You see a link to a cost study that we performed in 2019 and released an early 22 pre pandemic again, the highlighted that as a state we were already seeing tremendous pressures on our housing community development fields from a well defined combination of permitting regulatory and process barriers. Yes, that's part of the part of the feedback you'll hear from builders and developers in terms of why we aren't maybe reaching our housing building and development goals. But there were already also emerging labor and material costs which will spend a good amount of time today talking about as well. And then a to 2021 report that focused on land use regulations at a local level where we had 22 of 69 responding towns indicate that they don't have zoning less than a half acre for a lot sizes anywhere in their community which is speaks to the challenges of sometimes placing the right homes in the right places as we like to say to be sure that we're doing responsible growth and development. And then you have a 2021 report called the state of development Vermont and if you have time to read one I think for for this conversation this is a particularly helpful one. And a lot of the slides and discussion today in this program are really a continuation of discussing what that paper is pointing out is which is in the housing development field we've really run into a perfect storm of chronic lack of meeting our production goals are are inability to produce enough housing units as a state along with pressures created by the pandemic related to cost and labor especially and those those things all building compound off of each other. And it's made it's made the challenge now a lot of people are rightfully calling your crisis. So, and just a quick plug to the timeless resource and all this research ages but housing data org does not so if you aren't using that site to great place to see ladies and grace in terms of research housing data and information. The next thing I want to point out is just a little a list of the existing programs to help home buyers so if you're falling along at home that'd be that next slide three, which is a list of the various resources we have available in Vermont we have about $60 million in a given year after we convert all the federal and state tax credits into equity we have about $60 million to spend on affordable housing. And now we spend between $1.9 and $2.9 million of those dollars on single family investments as a state so you can see the overwhelming number of investments go towards multifamily housing development and primarily are the majority of our resources for single family have gone towards down payment assistance which I would qualify as being a demand side thing helping people compete in the existing housing market. And that's important because what the missing middle proposal really is is it's trying to change the market a little bit it's it's we're trying to increase the inventory of homes available to buy to make those borrowers who might otherwise be totally rely on down payment assistance, more competitive in that environment. So as you walk through those various programs that this state has done. It's also worth noting that at various times that our states faced either economic or environmental crises. We have invested one time state or federal funds or increased our programming for housing investments as a result of those, those will crisis is of the past. The state tax credit program is probably the most recognizable to folks the state's investment affordable housing tax credits that is paired in some cases for multifamily projects with the federal for 4% low income housing tax credit for multifamily rental apartments, but also has the home ownership portion, which over its history has created $14 million and in state tax credit tax credit equity that's gone for tone ownership and VHFA manages that program. And it's included over $6.6 million in stick built homes, remembering that a portion of those state credits also go towards down payment assistance and also support a manufactured home replacement program out of that state credit pool. That credit pool has consistently been increased in response to various crises, including Hurricane Irene probably most most recently when a large boost was done for the program. In 2008 we use the federal funding programs called harp to make investments in 74 homes that were purchased and rehab across the state similar to the VHIP program honestly that you have also probably had some inner interactions within some cases. But that program was extremely successful good example of using that the federal relief for that type of program. I mentioned to you'll see a slide. If you're following along again number six that talks about our response to hurricane or tropical storm excuse me Irene. And the fact that since that one time and increase in the investment that we had in state tax credits has been enacted. We've been able to replace 263 manufactured homes across the state that are owner occupied so that's tremendous achievement from that program and it's had a really sustained benefit to Vermonters in some cases making sure people are getting out of floodways and environmentally hazardous situations and in some cases just replacing dilapidated homes that otherwise would not not be safe and fit to live in and otherwise would not get replaced. We've also invested as as an agency and as a state in preservation of manufactured home communities where possible manufactured home communities are the largest source of uns traditionally unsubsidized housing in our country and Vermont's no different. You would end up with over 7000 people if you combine all the manufactured home communities in the state it would ranked as one of our larger towns or municipalities and it's been an important part of our home ownership investment portfolio. And then traditionally via to face participated in over $18 million in home ownership construction. Now if I compare that to what we've done on the multifamily side. We do $18 million in construction lending in a year on multifamily but there is a pattern in history of our investments in that area to try to inspire a single family investment single family home development. But by and large in comparison especially to the rental side of things it's it's been pretty low in terms of what we've invested for home ownership in the state. Again, if you're following along slide nine show points out that the single family down payment assistance program has now helped over 1300 Vermonters since 2015 and that's probably been also the bailiwick program for the state in terms of what we've relied on to really support Vermonters and accessing affordable home ownership. One thing that's been really clear that we haven't moved the needle effectively on if you're following along again slide 10 is this frustrating craft that shows you our current breakdown of home ownership rates by race and white loan households experiences 72% home ownership rate while black or African American households in Vermont are experiencing a 24% ownership rate. This is at a time where our country just shattered the record for what we would call tappable home equity. There's $9.9 trillion in homes and tappable equity across the country. So if you think about the fact that home ownership in our country right wrong, you know, don't agree with it myself that it's the vehicle for wealth and and generational transference of resources, but there's a reality that it is, and it provides stability from a financial standpoint for a lot of families. And when you see this kind of imbalance in the percentage of home ownership between, between races that's that's extremely concerning because that means that 24% of households versus 72% for for black and African American families aren't getting access to something that as a country accounts for about 30% of the total wealth that households have. So that's a that's a disturbing trend and one that we think inventory has a lot to do with and availability and opportunities for purchasing. When we do focus on demand side and we send borrowers into the market for to participate. We need to also be aware of what the market's doing and the next few slides walk you through what we're seeing as a country we just crossed $400,000 for the at the median home sales price. Vermont's not quite there yet, but we are on our way. So the first graph here shows you a little bit that the prices have climbed precipitously. So prior to the pandemic, we were experiencing medium home price increases of about 2 to 3%, but from 20, 2020 to 2021, we jumped up to 10%. And now over the course of the COVID-19 pandemic, the price points for homes have jumped up 19%. And I think we would all agree that the household incomes over monitors have not done the same thing. So home home price doesn't exactly match up with household growth observed in and since it's that another area. So Chittenden County, for example, has the highest prices median prices between $385,000 for a single family home and $425,000 for a single family home. Meanwhile, in the Northeast Kingdom, Caledonia, Essex and Orleans, we still have median sales prices around $153,000, but we're seeing new growth that's been really interesting to see because traditionally, if you look at slide number 12, we would see a real imbalance across the state and where we see home price growth. But what this is showing you is actually the cost increases that have been experienced in the graph where it shows you where home prices are going has been statewide. It's not been located to a couple markets and it's popped up in some really interesting places that would be hard to predict. And there is certainly, you know, some of the recreation and tourism sites like Menden, Dover, Ludlow and Warren are high up on that list. But there's also been increases that have been really, we would say out of whack in places like Addison, Barry and North Hero, where there aren't as high a percentage of second homes or seasonal or vacation homes. So that's been interesting to watch. And we would argue has a lot to do with slide 13 about home home construction and our inability to really add enough units. Vermont's projected home home growth between 2025, according to the housing needs assessment was projected to be about 0.18%. That's well over a percent lower than where we have been in the past and is really near stagnation and that that accounts for homes that are aging We have the second oldest housing stock in the country and going off the market in addition to just the inability to build enough new homes. So, you know, we're losing a certain number of homes because we have a whole older housing stock and not adding enough new. And the call it encouraging if you want. I was on a call yesterday with the other housing finance agencies across the country and heard that right now there are accounted for proposals across the country to spend about $2 billion of state and local fiscal recovery and housing efforts across the country. You all in Vermont have been leaders. We've been leaders on making sure that we prioritize those investments. But there's a lot of discussion about how to get at the homeownership piece of things as well. We obviously work a lot on rental but we're really interested in this. And there's been a falling for from the federal level about the worthiness of these investments to and so when we approach the homeownership program development. We thought looking at the federal proposal called the neighborhood homes investment act was a really great place to start and you've got a couple slides that break down the way that that program looks the neighborhood home investment act is essentially matching up homeownership investments to the way low income housing tax credits work on the rental side of things. So you've probably have all heard about the 9% or 4% low income housing tax credits for rental developments. Our largest pool of resources year over year that we have a non pandemic ARPA and one time spending times to develop multifamily housing and this would replicate that but provide funding for single family home development. We really focused on how we could prepare for that program and build something that would prepare our state to take it on should it pass. It was part of build back better. It's really hard to say what's going to happen with that federal program. But we still think it's really smart to model any kind of state investments in homeownership to something that will translate easily to that because if you think about it we won't be standing up a brand new program if this federal opportunity passes. Which we think will provide about $8 million or so every year to the state in terms of funding to support single family housing. So we thought about preparing for that we want to increase opportunities specifically for households below 120% am I Typically our homeownership programs have focused more at the 80% level of ownership and sometimes lower so that was a little higher. But maps to what the Neighborhood Homes Investment Act and the federal side was seeking to achieve to. We want to support large and smaller scale developments that could meet needs across the state we can't build 100 new homes in every community. But there are a lot of projects out there that need help and would like to add some affordable units that are four, five and six and good fits for their community. And we would like to be able to scale program that's easy enough and has few enough administrative barriers to be able to reach those homes to or those communities as well. And that's about that creation of accessibility to. So the high points on the Neighborhood Home Investment Act, what is basically that the federal program would create funds where we could subsidize up to 35% of the construction cost of either building a new home or acquisition rehabilitation of a home. So that would mean a builder on the acquisition rehabilitation side could buy a home that's in disrepair repair it and then sell it back and the subsidy would help both take on the repairs that it was sold for a more affordable price than what we're seeing in the market right now. That particular program set is targeting households up to 140% AMI area media income and I'll show you what the prices look like in a second for that sorry to use jargon and have an acronym on there. But we have said 120 has felt better from a priority standpoint for the state and matches a lot of other programming that we do. So there are geographic limitations on the Neighborhood Home Investment Act proposal on the federal side that we're not big fans of and we've been working with our congressional district delegation to be sure that those get changed or fixed to meet but the nice thing about what we're proposing with the state funds the missing middle proposal is there is no geographic limitation for us other than making sure we build in smart places responsible growth and spread it across the state to the are the best of our ability. And then this is a big topic when it comes to this subject which is how is the subsidy retained if there's a state or federal resource going into a home. What's our expectation in terms of its future affordability and what's going to happen to that subsidy for the Neighborhood Home Investment Act. It's pretty loose there's a reduction in the amount of required recapture from a from the appreciation in other words the game that a borrow might realize the neighborhood homes value as it increases over time that they don't receive a full windfall of it in the beginning but it reduces over time how much equity they get to take with them from that appreciation. They get full access to the equity. I want to say that in this in the Neighborhood Homes Investment Act the sweat equity so if you've paid your mortgage down blank number you realize all all of that equity but if there's an increase in the cost there's a calculation that federal program that restricts that. So we took all that information that housing data kind of where we have been as a state and that Neighborhood Homes Investment Act information and put together the missing middle program and it focused again on that same benchmark number of not exceeding 35% of total development costs for a home to buy it down to allow purchases to occur for household affordable at 120% AMI and I'll show you what that number looks like in just a moment. It's based off of two stages of subsidy being needed. The first is called the value gap. The value gap is the difference between what it costs to build a home right now and the appraised value. So you've probably seen some news stories from what it looks like to build a home right now when builders are even building modest homes and with their best building methodologies possible right now given where costs are from labor and materials in particular. They cannot build a home for what it will appraise for it costs too much. So what would happen with the program is it would first address that value gap and fill the difference between what it costs to build a modest home and what its actual value is so that really level sets the builder from the beginning to the marketplace so they're not over the price on that home further by selling it for what it actually costs them to build and in many cases it would actually map back to what it's worth and what its value is. The second is an affordability gap which is to say that despite where appraisals are right now. That's still not affordable because of the lack of inventory and where we're seeing prices occur so what is happening is transactions are getting cash only buyers multiple bids and they're going way above their appraised value for sales to right and as a result the markets kept pushing those home values up and up. So what we've said is in addition to getting to that appraised value there would be an affordability gap that will allow the program to provide a subsidy that would further push the value or purchase price of the home down to that number that's affordable to somebody at 120% So that value gap will get a modest home down to its appraised value. That appraised value still may not be affordable to somebody at 120% AMI. The affordability gap would step in as a secondary resource. The affordability gap what we've said would then be retained in the home as a permanent subsidy and would buy down the price for future buyers. There is in the Senate side of things there was a little discussion or quite a bit of discussion about you know should there be an option for the buyer to be able to pay that subsidy back instead of have it pass on to the next buyer should we require the next buyer to be income qualified and those are all things that there were questions about on the Senate side of things. What's proposed is that the subsidy remain in the home make the home affordable for future buyers. I'll show you some math on that too. It layers well with existing programs. It does not require on face the use of the exact model of shared equity that we've historically used and supported with the state tax credit program. It is opening up the opportunity for different solutions or more multiple solutions. The shared equity program can sometimes struggle and in other areas of the state outside of Chittin County and we would really like to see the opportunity for builders nonprofit and for profit in those areas to try other approaches and other calculation methodologies when they try to think how to make homes affordable into the future. There's a second portion of this program which is a construction access capital access program. I actually don't want to spend a lot of time on this today because I think it can it can confuse it a little bit but I wanted to just note that as we talk to builders and developers. One of the things they cheered for was also help us on the construction side because getting up front capital will help us build more homes. And so we've partnered with my housing and conservation board to create a $2 million pool that will provide construction guarantees to Vermont banks and credit unions who are making loans to home builders that will reduce some of the cash that they have to set aside as security when they start their projects and also increase the amount that they can borrow because it will provide a credit enhancement of sorts to their construction loans. So that maybe they can add a couple more homes to the projects that they're working on and those those homes that that program applies to have to be program eligible. So in terms of eligible homes for what's being proposed it's single family homes single family homes though can contain between one and four units as long as its owner occupied. It can be a condominium unit a house or apartment or a cooperative. So one thing to note is it could be a percentage if you're building six homes you don't have to use the program for all six homes. You could have for market rate homes and include two program homes so the subsidy would only assist you with those two homes and same thing in a condo development. And that's a pretty great tool when you think about the fact that there are a lot of municipal municipalities across the state that have asked builders to build a certain percentage of their homes at an affordable price but are actually providing them any kind of financial resources to get there. And that can sometimes cause the other homes around there to bear the cost of those affordable units and just drive their prices up even more which is in a great formula. The eligible costs can include land acquisition pretty much every hard construction costs you can think of and a lot of the soft costs associated with the development of single family homes. The affordability levels I talked about are posted on our website. We have a affordability chart. This is actually what's used for other state programs when you talk about reaching affordability levels to. And I have a little arrow there because we think that that's really the sought the sweet spot statewide for the program so you can think about what that looks like. And it's getting those homes available at the 319 500 to 255 500 range outside of Chittenden County. And then within Chittenden County, that 100% AMI levels where we think the sweet spot is for the program. So, you know, we fund projects right now with state tax credits that sometimes the units will cost, you know, close to $400,000 in some cases to build. But the final sales price to the borrower is $170 $180,000 that's for our program right now. This would not go that deep on face. However, when this program steps in and gets that sales price down to 319 500, it could be layered with other traditional resources from Vermont Housing and Conservation Board, or from BHFA. If a developer decided to do that and when to layer in those resources and reach deeper. So we think it's a great tool to get home affordability down to 120 100% AMI. And then there are programs that will drive it down even lower, especially to hit those 80% AMI levels. So that's the target in terms of where we think the sweet spot is and where we think the real need is. We have built priorities around this program that have talked about how we're going to and we've built underwriting guidelines and resources internally. But these program priorities stand tall in terms of how we would analyze projects and give you a good sense if you're falling alongside 20 and 21 especially. So this is the first location again geographic to distribute a little bit about we are not interested in this being a sprawl program we want to make sure that it's thoughtful where the homes are going. We want to ensure that homes are modest, it's not to build large homes which right now in this marketplace that's where builders are being pushed to right now. A lot of builders have said I don't like building the stuff I'm being asked to build right now I want to build stuff like this and this could help me do that. Deeper affordability will be will be considered as will energy efficiency and the development and if there's a historic nature of the project to which we do have some buildings that could possibly do that. The program guidelines include construction cost size limitations and profit limits for builders. And those are all part of a standard review of a project so there are there are guard guard rails on this and the numbers that we're going to be using for that. We'll use the survey data from the National Home Builder Association, along with what we compile about what a modest home looks like in Vermont and what's appropriate for different size bedrooms and households. So I talked a good bit about the subsidy definitions but want to provide a slide there for you so because I think that's helpful that value gap. Think about it as the difference between the cost to build the home and the appraised value. The affordability gap is okay you've got the appraised market value that still may not be affordable to those households were trying to reach. So let's subtract off the affordable sales price for that target median income, and then that subsidy retention would be either repaid or reduced to the next, the next buyers from a price perspective. And so the way the mechanics of it work in the subsidy example I've got both a new construction and an acquisition rehab there for you to see if you had a 400,000 home that cost $400,000 to build. And I got to tell you right now that's that's sounding pretty good in terms of costs because it's it's really hairy out there when it comes to looking at costs, but cost to build a home $400,000. If the appraised market value or $375,000 of appraisal said that's what the home's worth the value gap would be $25,000. And then if we looked at our chart and said we want to reach that 100 to 120% am I level that means we're going to need to get that home down to 319 500. And that that says our affordability gap subsidy would be around 55,500. And just to say this allow this very closely models a very real development that we did in Woodstock. Just this year, building some homeownership unit so it's very close to that in terms of the numbers. And then the final price and sale subsidy total from the program would be 8080,500. But it's that 55,500 that would be passed on to that next buyer that would reduce that number so the buyer would get an appraisal or excuse me the seller would get an appraisal if they decide to sell the home in the future. And then we would subtract that 55,500 from that appraisal and say that's the maximum sales price that's what's being proposed in the program. I do want to note that the Senate included language, referencing am I for future households. And that's where what we will probably ask for is an opportunity to have to say the seller will either offer it for sale to reach the am I level that they bought it from so whatever that sales prices at the time our chart will adjust or pay the subsidy back so we can spin it in another home. But that's that's a piece that's going to need to get ironed out as it's moved over the house in terms of some of the language that came in last minute from the Senate. And this was an acquisition rehab example on there to if you're calling along the side 24 which is if you bought a home that was in disrepair for $220,000. And this is really for builders to buy the home not for an individual to take on that responsibility themselves, and it cost $180,000 to rehab the home, the value gap again because their praise value would come in at 375 would be $25,000 and the affordable subsidy would be $55,500. So those numbers all look the same. It's just showing that instead of that new construction costs equal $400,000. If you combine the cost to buy the home with rehabilitation. It's got the opportunity to help bring homes online that aren't in great shape across the state. I put on there in terms of subsidy retention requirements. I'm happy to talk through I realized that I'm at my time, and then also just share shared a real life example of a development it's in Jericho the builders that mind us telling that story now but where they were in the community in town to build homes that have emerged maximum purchase price of 343 500, but it's $370,000 to build the home, and it, they've got to do. They've got to do two duplexes, or excuse me two homes one duplex of the total six total homes there have to reach that affordability level. And just to be really blunt about what this builders faced with doing as a result of that affordability requirement which is really well meaning and is a great idea from the town, but we just don't have resources to step in and help. As a state, they're just going to add that price on to those other market rate units they're going to throw in slightly nicer cabinets and countertops and this is their quote, and they're going to, they're going to put the price into those market rate units and charge more for those. And that that's not the intent of that policy that's not what we'd hope to achieve when we say the town's affordability inclusionary zoning can be a great idea and a great tool for you. Yeah, so I'm apologize I think I'm a minute or two over so I want to I want to pause and see how I can help best. Please do not apologize. I feel an awful lot better informed now else. If I watch this YouTube a couple times and maybe I'll finally get it in my brain. Thank you. That was very, very helpful few questions here. Thank you. I have two questions. So thank you for coming in. And I agree. I'm feeling much more informed throughout the presentation you talk about a praise value a praise value, you know, really important because that's as much as you're ever going to get from the banks, unless you are, you know, capable of, in other words, that's as much as you're going to be able to buy the house for unless you have funding above that level to be able to to pay more for the house. So the affordability the the piece of a praise value is really important. And you talk about the the concept I think you mentioned Jericho one of the last things you discussed. Sure, great idea. But if those homes are going to be purchased by individuals that need to take out a home loan, and the builders are on the market value units. You know, that's where they're, they're getting their costs for the units that are being affordably billed. They're overlaying their costs over there if those units don't appraise at a point where someone can buy them. So what's happened, how is that being addressed. That's my first question and I just have a question that about the $60 million you talked about the, like the second slide you went into but please first first you know how is that being addressed the appraise piece. So, so just to say this aloud and I don't want to make this the boogeyman but we've seen a 38% increase in the purchases that have occurred from out of state buyers, and it is safe to say that more of those out of state buyers are high cash borrowers. So in my personal story, I can see a house from my window that was purchased in 2016 for $195,000 by a friend of mine, and she put that house on the market and the realtor said I think around 275 in 2021 is the right price for you. So she put that home on the market for 275. The home ended up appraising for 285 as negotiations started with a buyer but they she had multiple offers. The home ended up selling for 334. And the seller, the buyer came in and just said I can make up the gap with cash on the appraisal. I don't mind. So you're absolutely right. And what's more frustrating right now is individuals who have government sponsored loans, USDA rule development, HUD loans, VHFA loans and down payment assistance programs are less competitive in those environments because as you said, our programs just won't even allow them to get into that kind of trouble where they're upside down on the value of the home right away. But in an overrated market and people ignoring their appraisals, that's extremely problematic. So to answer your question, we do think that's really important. I want to make sure I think I'm answering it. We think it's important to start from that point. Thank you. And then my next question is on slide three programs to help homeowners and buyers. And you mentioned that the $60 million a year. Can you speak more to where those funds are coming from? You know, how does the state of Vermont receive those funds? Sure. I would actually refer to that housing investment report. That's the best place to go. So Department of Housing and Community Development aggregates all those different sources and resources. There's the HUD consolidated plan that tells HUD how we're spending our money and that links to that document. But it's from the federal government in the form of direct investment from HUD programs like home, national housing trust fund. But that number also includes we receive an allotment every year of federal low income housing tax credits that then get sold and turned into equity for multi-family development primarily. And so that number does include those resources. So for example, every year we get in the range of $28 to $31 million in equity from our low income housing tax credit program on the 9% credit side of things. So that gives you an idea of how those resources start stacking together. But the housing investment reports are great resource for that. Thank you. Thank you. Representative Tolano. Thank you. I have a couple of questions I think in sequence. The slide that has home that's titled home construction fails to keep pace with demand. I don't know what slide number that is, but. So first. 13. Thank you. Slide 13. So I had seen somewhere more in an interview saying that we dropped from 3000 units a year in the 80s down to as low as 400. That doesn't quite match with this chart. So the low point in the early 2010 era post Irene right or no post 2008 crash. You know that clearly was a weak point. So, but it but if if 3000 for the sake of argument 3000 had been our average from the 1990 to 2020 that would be 90,000 more units. Whatever the average has been. Let's say it's been 2000. So let's just say it's 1000 net a year. That's 30,000 units net. Am I right so far. I mean like that. I mean, this is a this is a back of the envelope contextualizing questions so it doesn't have to be perfectly, but am I making sense so far. I can follow your reasoning. Yes. All right. So then the slide doesn't say anything about what the demand curve is. So it says fails to keep pace with demand but the data isn't about the man that the data is about permits. And so I'd love to see that offset against aggregating our sense of what the demand is from the housing survey. So that we're looking at those two data points together and we're understanding why there is a market failure or mismatch between demand and total housing. So that's one piece of it. And pivoting to the I think on the later slide it says 15 million for this program. And I'm understanding correctly in order for this to be permanently affordable and therefore to be carried sort of carried forward. We don't ever get that money back it doesn't come back out in any format because otherwise it would defeat the purpose of kind of carrying forward the affordability gap subsidy. Am I right about that? That's correct. Yes. It's proposed to stay in the home and be passed to the next home buyer. OK. And so then if we if the average subsidy was 50,000 then that 15 million would buy us 300 units approximately. Right. And so I'm just looking at yeah yeah I think that's right 300 units at 50,000 would be 15 million I think that somebody double checked me if I'm off by an order of magnitude. Please go on. Okay, so then I'm thinking 300 units for 15 million versus an accumulated gap of at least 30,000 units. And I don't like I can see the value for the individual families that are in the market for housing. Totally get that. I don't understand how you can make any claims about any market impact at all. I don't see how this addresses the underlying systemic drivers that are creating this mismatch in the market. I see 16 different recommendations for systemic interventions. I see in that data report a statement that we cannot say with certainty what causal connections there are above market as an average out of that. I see 16 drivers are relevant. It's not quantified how much of the gap is driven by those 16 drive, you know, drivers and there's no coherent strategy for how with this, at least in this in that report I don't know where maybe it is in the Senate policy how we're getting at the systemic issue at the same time. I guess my question is comment on the relative scale of this impact versus sort of the market claims. Can you provide a demand curve on that slide so we understand, you know, has the, you know, over time is the gap between demand and what the market is producing increasing is a relatively stable but persistent. You know what's going on. Sorry, that's a lot. So, we think about demand, maybe a little differently so the what we do in the housing needs assessment and if you have the opportunity to bring that up by all means page six is a good one to start because it talks about the unmet needs in the state. And at the onset of the pandemic is what we said is it would take about 5800 homes 5800 homes in Vermont to house everyone who's experiencing homelessness to provide enough market absorption that would reduce prices down to the point that we think it would stabilize a high percentage of those households who are cost burden because, you know, in theory, if we add those units in and I understand it is in theory it's all, you know, until you practice it and put those units and you don't know exactly how things are going to respond. But in theory, if we put those in there, it should help stabilize some of those rental costs and demands to if we add those units but most of it is based off of if we provide enough homes for cost burden households to reduce some of the competition for those units that allow for the rents and or the prices being charged by the owners to be to reduce some of the pressure on that. So that would be what I would point to. And in relation to your question about market numbers. And just to be clear, the affordable housing resources, I like to say that we can produce about 200 units in an average year like that's that's about the I think we can do with our year over year resources that we have and the X, you know, there's a lot I could go into how a development pipeline in the state responds to the availability of funding resources. But that's that's a safe bet for me. And we added the one time pandemic resources if you take that 5800 homes that we were trying to get to, if we drop those in alongside our existing resources in the five year period, which is what that 5800 homes were saying in five years we need to get it would get us about, you know, roughly, I think it's about 30% of the way there but that's the affordable housing resources we have to believe and trust that the market will also produce some units as well that's the idea is that there will also be market rate units coming online it's not all going to be affordable housing development, although in some communities, that is the new stuff that gets built that's a reality that we deal with. So, I guess that's the starting point on the demand side of things. In regards to the question of how are we getting at the systemic issues. We don't control the major systemic issues. We can talk about permitting and land use regulations and the impact that, and the trade offs that we have as a state about conservation and what that means for the predictability timeline of a builder and how confident they are that they're going to get a project through and we look at the difference between applications for permits and actual starts and right now that number is more mismatched than it usually is. But it's a good sign that builders are dreaming big and pulling permits it's not a great sign that the pull through rate in terms of the completion certificates for occupancy aren't at the same level. And that's a sign though, not just of regulatory and land use barriers, but also just of construction price increases. And we've just seen exorbitant increases. We had a 10% increase last year in our in our rental housing development pipeline. And this year we're looking at potentially a 20% increase. And I don't need to explain to you all that our resources at the same time haven't grown by that much from the federal government to build house affordable housing right. So we're, you know, we're scrambling to try to find ways to deal with those cost increases. And then, you know, encourage you to talk to nailer and brain that they're, they're a great one to talk about this topic or Jim Bradley at the Home Builders Association who will point to you that builders can't hire people right now. They're having a really hard time doing that and the thing that they point to kind of ironically and cyclically is that the builders and trades people that they need can't afford to live here and are having trouble finding homes. So we do think that some of these homes would fill that range and if you talk to builders $25 an hour and lower is where they are having the hardest time. And we think we could, we could hopefully get at that in some ways on here doesn't solve all the problems, and we don't control all the labor mechanisms and we certainly don't on the supply side of materials, but just to follow things. One is a statement totally understand it's not your responsibility to solve the systemic issues. It's ours. And so I what I, my point was really, I want to make sure, as we look at what the Senate policy is, and we're addressing that they're, you know, that there's lots of questions, but there's clear performance gaps. Just a clarifying question. The housing needs assessment 5800 units is for affordable housing, but the permit slide is for all permits not affordable housing permits right. The 5800 is, is total housing stock so that's looking at all units actually like that's the number that we set off. Sorry, I didn't mean to cut you off sorry go ahead finish your sentence and the permit slide is for all homes as well. Okay, and then, but that 5800 is pre pandemic while we see being, we've seen a real estate spike. It's about the state of people buying second homes, which it, you know, came out of virtually came out of nowhere, and it's been a huge force on the market. And so how much is there anywhere that we're starting to quantify the impact of the that sort of pandemic purchase cycle on those projections. And what I would say to you is is, we're just starting so and I gave a presentation yesterday to the house natural resources committee about this topic. And we do have, you know, quite a bit to say about where things are in terms of building and household sizes and where workers are. But it's too soon to say like what the long term impacts of the others are going to be. So we have some pandemic indicators for housing on the on our website and then we recently I think it was around March the 6 took apart the state's transfer tax data from last year and compared it to several years to try to get at that while also looking at the current home sales data and put together an article that I won't try to summarize here but it's pretty good at at giving our best guesses at what we think the defined pandemic impacts are and what the potential long term ramifications for prices and costs are. Is that something that you would be willing to send along to the committee. Sure, happy to release to me. Sorry. Thank you. Thank you. Thank you very much. Thank you for these concrete examples you gave us at the end of the presentation. It makes more sense to me that way, but on the very last one I'm struck for you actually point out that this that there's still a gap because this number of the maximum purchase price doesn't include the builders profit or his other soft costs and how would those costs be covered. And how would they be covered. Yeah, for another. Just price a higher purchase price. Or is there an agreement that somehow the builder would be subsidized. Sure. Yeah, so this was a rough budget. I think it's a little bit different from a builder who I will say would make their money off of what I would call vertical integration, meaning, or what some people might say is conditions, meaning that they are, they are realizing revenue from the budget analysis that we've built for the program that was actually asked builders to do that and sign off on a, on a cap across all the building process of what their gross earnings would be at the end. So I think the, the point I was making is I don't actually think they can build that home for $370,000. I think probably when they put their profit on there, as you're saying, it's probably, you know, more than the 390s or something like that. I think there's a bigger problem there than even the builder was acknowledging. My concern would be certainly that even even builders who are sympathetic to this whole concept and are being willing to offer a, you know, a very modest profit in order to do this, it would still be difficult to do that without covering some that process certainly. Yes. And the other question I had was, I understand the subsidy stays with the program and it needs to be continued on to the next homeowner. But what if these homes don't turn over very quickly. Do you mean that the individual stay in them for a long time? Right, right. The individual has a great deal and they're going to stay there for 10 years. We think that's a great outcome, frankly. Like that's, that's the ideal outcome. We get, I think people get more uneasy when they think about the idea that's, you know, there's an opportunity for people to realize appreciation and equity from sales. And that's why keeping the affordability portion of the subsidy in the home or getting recaptured back to the program to, you know, do another home with was key. So we think that people staying would be a good thing and we prescribe and subscribe to perpetual affordability as an organization. It's something that we usually strive for in all of our investments too. So as much as we can create, you know, cornerstone for affordability in communities, we think that that's a good thing. But the difference between traditional shared equity is that it promises to sell the home to an AMI level that subsidize later on that subsidy is created by the seller sharing their equity as part of that transaction. And this program is not prescribing that that's a requirement to do that. And as I explained, we think that having optionality for multiple right solutions to that problem is a good idea. And especially as we look outside Chending County. Thank you. Mr. letter, I'd like to, this is Mary Hooper again. I'd like to go back to the kind of the systemic issue that reptilina was raising. And it strikes me to say this very an artfully that our housing partners in the state are absolutely terrific at what what they're doing and the creation of the programs that they've created. I mean, I think every one of our communities has been transformed by the financing that you've helped with by the local housing agencies who figured out how to make it work. But that's, you know, that's only getting that current terms only getting at 30% of the problem over over this five year period. And I'm just fearful that we're going to look back and say, oh my gosh, we still haven't solved it. And it strikes me that in fact it is on the where we haven't been as smart is figuring out how to help communities either lay down the infrastructure necessary to create the zoning or be at the physical infrastructure necessary for housing to be developed more affordably. Arguably, we could if we underwrote permit costs, if we took the same amount of money and applied it to permit costs, that would take probably 30 million 30,000 off of each home cost. So you are really good at the housing development side, but I don't think we're as good on some of the other sides. And can you kind of help. And so one of the things I'm thinking of is, we have lots of investments in water and sewer. If we were laying out in designated downtown, expanding our water and sewer and laying out a road system like we did in the 50s, or 60s and other parts of the country, you can build affordable homes. If we underwrote the permit costs, you could build more affordable homes. Can you help us think about that or help me think about that. Sure. So I have a little cycle I always call the it's the capital absorption sort of cycle of the way things work for how housing development pipeline gets built, and it starts with need. And they're being demand for homes knowing that if you build that home somebody will buy it or somebody needs to live in it, even as a nonprofit developer if you're building subsidized units you need to know that the area has need, and that people will occupy those homes. That has not been a problem in Vermont we have never had a loan or a property in our portfolio default in the traditional sense, and because of, you know, lack of people to live there and need. The second thing is the availability of capital and the capital that has come via ARPA the capital that's come from the housing revenue bond in the past. Those, those tell developers and builders that there's resources for me to use and I need to amp up my efforts to build a pipeline. And then they build capacity internally, and we see additions to staff happening right now to people to keep up with the current ARPA money. But I think what you're getting at is this next piece which is development really thrives off of predictability and process and timelines. And so if I were to take a development budget for you for a single family or multifamily home, I would guess that the permitting costs are actually only about 9% and I can say that definitively on the multi family side it's 9% of the average development that we do. So you could take that cost away, but when units on the multifamily side are costing us now 368,000 per unit to build that 9% isn't a huge isn't a huge number. What the builders or developers would tell you is that it's the opera. It's the cost of uncertainty that happens when there's unclear local process to how their development gets approved and what opposition and obstacles might cause in terms of time and cost delays. So they would point to places where they're just like it, I couldn't take the risk. I wasn't, I couldn't see clearly enough through the fog to start putting money into this thing to really make it move. And a lot of it, when you talk to builders and developers of that starts with those regulatory and permitting processes. So that is absolutely part of the the entire cycle. What gets me excited about 226 and we've been vocal about is we align our investments, typically with the state's designation programs and try to achieve our community development land use regulatory goals as a state not just thinking about housing, but land use patterns and settlement patterns overall. And the bill does have a lot of really good enhancements and investments in improving and evolving the state's designation program providing municipal planning grants so that communities can get pressed. In some cases to doing the right thing when it comes to allowing housing appropriate density, so that we do build build homes in the right places because we're talking about the numbers here today about how many units we need to produce. But when I go and have conversations with natural and conservation folks, there's a lot of, you know, equally balanced concern where it's like where all those units going to go, and are we going to be sure that they go the right places. And I think that's really married to the systemic issues that you're talking about there and I do feel like in Chris Cochran's a great person, Jacob hemorrhage to speak to that that there are some good provisions in this bill to help with that those issues. Thank you. Let me do a follow up and then we have another question. I heard you correctly, permitting costs are on the order of about, or the development costs are on the order of about 9% of a project cost and I think you said, that's not a lot. And I can appreciate that in instruction world that's probably a normal number, but it's also over in is more than the value gap, and it's what two thirds of the affordability gap is that went away. What you were trying to finance would be entirely different. Yeah, and I want to correct myself there because 9% is actually the soft cost bundle that actually also includes architectural and design. I should have quantified that because when you talk to a builder that's the number we focus on when it comes to permitting because a lot of the expenses associated with permitting adjustments actually show up in architecture and design adjustments. So it is a I will, I should have said it's a bundle of services because you're totally right the permitting line item is a percentage of that 9% that was kind of broadly stated sorry about that. Okay, thank you and I've always heard about 10% for the total soft cost that makes sense now representative Yacoboni. A couple of questions to follow up. And this has been helpful out of that the $60 million tax credits. Do you know how much of that comes from the Vermont Treasury. So from a state basis, I'm going to quote the total. I will write back with the exact breakdown of the state credits between rental and home ownership. I've got too many numbers in my head this week I apologize. But the state provides an affordable housing tax credits. On a much lesser magnitude and in percentage than the federal program. So the, the state program creates a couple million dollars in total equity every year for home ownership and rental development, where the federal programs create create a couple 10s of millions of dollars every year for development. Thank you. And then I wanted to go back to the manufacturer homes. Nice manufactured homes. Certainly in my community. I live in one. Very nice. But I'm wondering that market. Isn't it much less than the two to build than the 300,000 range that you speak up. We do see that as an affordable path for home ownership there's yes. The answer is absolutely. They have gotten quite a bit more expensive recently it'll surprise especially when you get an energy efficiency but yes. I would, I'm just curious why wouldn't in a period where, you know, land, labor and materials, the three drivers housing are all at high peaks. They don't fight that fight.  And I realize not everyone wants that type of house, but for many it's adequate. I'm just wondering why wouldn't we go there. I know you have read the material, almost 5600 units over the last two years. Any, any insights on that. Yes. And so this, this proposal is also paired in the 226 bill with a manufactured home community investment opportunity that combines a couple of different things. The first is small scale capital needs to help with things that state programs aren't picking up with for the communities themselves. Representative, I think one of the items you're pointing out is we have lots that are inactive right now that could be active in communities. So from a manufactured home community standpoint, it could help clean up those lots remove abandoned and dilapidated homes and help put together foundations that will then enable the next home owner to access that that lot with greater ease and potentially use the states down payment assistance program at the same time and included in that bill is an expansion of the down payment assistance program for the manufactured home replacement. They could also be used outside of lots on owned land by individuals throughout the state as well. So that is, that's part of the total package for us to. So I realized when we talk about our housing portfolio, it's huge and this is about one segment, everything from section eight, all the different programs that we have. You know, if I were to say, can you show me the distribution of our portfolio. So is there anyone who could do that and behind my question is, I was at a housing conference last night. The family that my wife is working with that's being evicted on Monday. And I think the data said there were 500 children in motels. And one goes towards you take care of the children's need first don't you you mitigate that in a significant way before you start talking about home equity, which is very important. I don't deny that at all. And is that Vermont's policy, shouldn't be Vermont's policy to first go after the, what I call the emergency situations. And then, once that's tamp down whatever the terminology when he was, then you address the others or is it such that you have to multitask you just can't do one. Any insights on that. Sure. Yeah, so first of all, just from a statewide perspective we we say there are 13,900 total government subsidized units for apartments on the rental side of things statewide. And that includes, you know, VH of a as a portion of those in the tax credit program those also include private owners who have portable voucher holders living in their units or rental assistance from the state housing authority. It also includes affordable housing built through USDA role development, and our public housing authorities, which might not be in our quote unquote portfolio from we funded it with tax credits or some other kind of thing but that includes the total universe. And so we keep track on the on the housing data. So if you ever like to like to see the kind of breakdown we try to do that on that site with various views. So let me know if you've got specific questions but we can absolutely break things down for you about apartments and how many homes have been created in things like that the programs. I do think we're multitasking and I think you all have approved some incredibly substantial and very much appreciated investments in one time spending for rental housing development and that we have prioritized that funding towards creating units for those in the most urgent need in homeless households and we work very closely with the agency human services. Most of those projects that are being done with the funding you put through VHCB from ARPA and one time funding also are using tax credit program so we're all working together to get those units built and that all those developers and builders right now are running as fast as they can to get as many units online as quick as they can with those resources that are so critically needed to provide that emergency housing and and make sure people start off with a safe decent home to live in and you're right that that is always first and foremost our priority is that that should be something everyone expects to have the opportunity to be able to have a safe home a safe decent home. We do start there. We do think though that this is part of the market that deserves attention and that as time goes on. Home ownership has really positive net benefits Habitat for Humanities are great entity if you've got time to hear from people to talk about the benefits of the owners of their program which this could be combined with it's it's incredible what can happen to people with that tool as well so we want to do all of that and we think that this is appropriately sized given what we're what we're doing on the rental side too. I don't want to trespass on your time anymore. I personally found this tremendously helpful in understanding this so we're really grateful for you taking more than an hour more than an hour with us so yeah. And we look forward to watching watching good things happen with these investments. Yeah. I appreciate all your work. Thank you. Thank you. Yeah. I'm honored to join you. Thank you. Hope you all have a great day. Good luck with the water bottles to go searching. Okay, committee were next back in here at one o'clock. I looked it up and now I forgotten again. The Justin Kenny on performance government accountability that that conversations so we're back here at one. And then we are on the floor at three. So with that you want to take us offline. Oh, that's right. So and then to a clock with that there was from the Department of Labor so we'll be good. Yeah.