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>> Pending home sales here in the US seeing

a surprise uptick in February as

mortgage rates fell to their lowest

since 2022. It's a good backdrop for the

new HGTV show from the Property

Brothers, Drew and Jonathan Scott. That

show is called Property Brothers Under

Pressure. It just premiered on Sunday

and it's a deeper look here not just

into the homes but really into the home

buyers themselves and how they navigate

a competitive market and make budget

conscious decisions for their new homes.

I had a chance to sit down with them

exclusively earlier today and talk about

the state of the housing market and

their journey to HGTV stardom. Take a

listen.

It's

>> unlike anything we've ever done because

people always ask us, "Well, what

happens when the cameras aren't rolling?

What happens behind the scenes?" We show

it. We show we You see our crew. you see

us disagree. You see moments that the

homeowners, you know, I think it's very

relatable for everyone out there because

there's so much pressure on everybody.

>> Well, in an affordability crisis like

there is across the country here. The

stories, we have 14 episodes and they're

all very different stories. Uh we have

families who have lost their house from

the the fires in in LA. We have other

families that are trying to pull two

families together to live in one house

because that's the only way they can

afford. We have so many stories that

will be very relatable for Americans

watching. And we're trying to solve with

really tight budgets. for trying to

solve what everybody out here is trying

to solve to be able to get a home that

they deserve.

>> We talk about the evolution of HGTV and

just these types of programs. It used to

be more about the homes themselves and

they are becoming a lot more about the

people uh and what they're going

through. And you know, here at

Bloomberg, we've talked a lot about the

affordability crisis in the housing

market and particularly out west where

where you guys do a lot of your work. I

am curious if you've seen any sort of

movement in maybe a sort of a future

where you have real starter homes, real

affordable starter homes for people in

some of these markets.

>> There's definitely been a lot of

movement. Unfortunately, it's in the

wrong direction. We have, you know,

about a 4 million short house shortage

of healthy inventory right now. And the

challenge is people don't seem to

understand that we need affordable

housing. any successful city in the

world that has embraced affordable

housing, the cities have flourished and

the costs have come down. But I love the

idea that people can live where they

work. And I think some people hear

affordable housing, they think, well,

that's going to be, you know, drugs and

crime and everything. Absolutely not.

These are teachers and uh, you know, uh,

nurses and police and, you know,

household pe workers, people who want to

live in the same community that they

work. And so that's our our goals from a

messaging standpoint. Show people that

it's okay. You don't have to be a nimi.

you don't have to stop projects that are

being built, you know, in your

neighborhood. On the flip side, we've

invested in companies like modular

builders. So, we're trying to find new

technologies that will physically bring

down the cost of construction. At the

same time,

>> in the hard time though, too, because

there's a lot of talk about rate cuts to

help, you know, government trying to

stimulate, but the problem is when you

have no inventory, cut rates if you

want. That gets people excited to buy,

but if there's nothing to buy, you're

not really solving the problem. We need

to find ways to incentivize or make it

um possible for developers to really

focus in. For example, we I have a real

estate portfolio in Calgary in Canada.

the government in Canada really

incentivizes builders to do affordable

housing. So, it makes it worthwhile and

I can keep rolling money from one

project to the next to the next to

actually make a difference. Down here, I

don't have that same opportunity.

>> Where do you see potentially where those

incentives come from? Obviously, in a

city like New York, affordable housing

has been a huge topic of conversation.

It pretty much swayed our most recent

mayoral election. I'm sure out west

where you guys are, whether it's

California, Vegas, Vancouver, you're

also seeing similar issues there. Are

you seeing things at the state level or

the local level that could potentially

alleviate?

>> Well, one of the biggest things is I

think federally there needs to be better

policy that allow and incentivize uh

builders and developers to pull out more

cash. So, for example, in in Canada, if

you create a certain amount of

affordable housing units within your

building that you can finance up to 95%,

whereas here, not even close. And so, a

lot of builders are leaving 40% of their

cash in a building and that prevents

them from building forward. Also on the

building side, if we're you if you're

using uh you know, say you're building a

building for easy figures, $20 million

building, if you do that as an

affordable building using uh public

funds for some of that construction,

there's all this regulation that all of

a sudden the cost is about 40% more just

to do the exact same building. So I

think we're getting tied up in, you

know, the minutia and we're not stepping

back and looking at the fact that we

haven't seen rapid enough growth to

solve the problem uh when it comes to

actually supplying inventory and it's

also adding density again there there

are different areas that are doing great

things but when you can add some some

more density even in California so for

example my house I'm allowed to have two

suites I can have two ADUs which is

great cuz I could rent both those out

and it's helping with the crisis however

the backlog to get to that point one of

my my ADUs it should have been approved

in a week I wait to 5 months and there's

such a backlog and the process is so

archaic. We need to revitalize the

process to get people moving to add

density. This is one of the things where

I'm hoping that AI is actually helpful

because the bureaucracy behind trying to

wait through the planning process.

Anyone who's taken on a renovation knows

how annoying it is to wait on your

permits, wait for the city, also wait

for the utilities to go through and

process everything. I would love to see

something that automates a lot of that

to make sure that the, you know, eyes

are getting dotted and the tees are

getting crossed, but you can actually

get in and do the work. And I was going

to say you this, this literally is right

now in modern uh history, this is the

absolute worst affordable housing market

in history for first-time home buyers.

Look at first- time home buyers are less

than 25% of the market right now, and

that should be a lot higher. It's just

not feasible for people to get into real

estate like it used to be. Obviously,

you've had a presence uh specifically on

HGTV now for more than a decade. Uh

you've had a lot of iterations of your

uh of your show and and obviously shows

that don't actually uh feature you two.

How much has that changed in terms of

being able uh to produce a show like

that at a reasonable cost uh have

whatever relationship you have with HGTV

and actually make it profitable for

everyone?

>> I mean, so we are one of the largest

unscripted producers in North America.

We have 15 series that we produce. We

host two of them. Um, but we we have

found a huge shift because what we used

to have for budgets for our shows down

here on HGTV or with other partners, we

don't have that anymore. So, we as

producers have to get more creative and

sometimes that means going to Canada,

greenlighting with a co-pro out of

Canada and then coming down with a

license um or or co-proing with the US

down here. So, we we're really good at

getting creative, but plus our company

stands out from other production

companies because we are up in Toronto

for our production base. that we can

actually take advantage of a lot of tax

incentives up in Canada that are great

that a lot of US producers can't. Well,

and we're also seeing explosive growth

in, you know, digital and, uh, other

forms of media, uh, you know, YouTube,

everything else. So, you know, find

trying to, we've always stayed a step

ahead. We're always looking at where the

industry is going. Right now,

television, traditional television,

>> I mean, what's the word imploding? Uh,

[laughter] everything is everyone's

uncertain. There's a lot of mergers

happening and so things are on are

paused. But that's that's what I like is

the fact that we're constantly looking

ahead. So there's enough opportunity

that we can still find placement

>> as has some of the mergers particularly

Warner Brothers being absorbed into

Paramount has that affected at all maybe

your outlook for what HGTV and Discovery

ends up being?

>> Yeah, absolutely. It's it's it's more of

a pause. That's what it is right now cuz

nobody wants to jump in a direction if

they don't know who's going to own the

company or what the focus is going to

be.

>> But if you look at Netflix, they were

only interested in studio side

streaming. They weren't interested in

linear cable. So Paramount's taking

everything. So that does mean that we as

we're the largest producer for HGTV for

Warner Brothers on the Unscripted now

will have that opportunity to do the

same with with Paramount.

Jonathan and Drew Scott there, the

Property Brothers, uh, on the launch of

their new program. But more importantly,

an interesting conversation there about

housing affordability, particularly in

the markets that they're focused on,

primarily out west and in