Fairness. Homebuilding rising to meet a record in making 98. Not everyone is joining the rally and housing. That joe biden hopes the fed will take on. Joe this is some really extraordinary housing data we got today. Thinknot like anything i we have seen in the past. The homebuilding Sentiment Index off the charts. Homebuilders feeling really good about this. All of the stories of people leaving cities, wanting to put down roots, have a yard, all that stuff. That has been soaring. At the same time, delinquencies have been shooting up as well. The blue line is traffic of prospective buyers. Basically people coming to look at a home. The right line is mortgage delinquencies. Intuitively, you expect it to look like these lines move in opposite directions. That is what we saw in the last crisis. You would think, during periods of rising delinquencies. This may be the only time in history we are seeing a rise in mortgage liquid sees and a rise in people trying to buy new homes. When you look at the data and dial down into it, you see that new jersey is the worst state out there. Is really the situation where you have lower income or more of a starter home feel getting hit a little bit harder as opposed to the wealthy areas like i am sure you live in. Those areas are holding up pretty well. New jersey, to liquid see 11 . Florida, not quite as bad as some people had thought, coming in at about 9. 8 . Caroline it is interesting that some of these states that are hardest hit are those most , theed to leisure pursuits services industry. I am going to have to turn our attention now to beetles. Apparently, they are ravaging lumber at the moment. Romaine i did not know where you were going. Caroline not music, unfortunately. Mountain pine beetles. Ofrently destroyed 15 years log supplies in british columbia, enough trees to build 9 million singlefamily homes. Mountain pineny beetles. This is why you are suddenly seeing a spike higher and lumber prices. Cant be moving right now, cant be making the most of low mortgage rates. A fixerupper at the moment. Building these homes pretty expensive right now. Joe it is very 2020. This moment where there is all this homebuying demand, suddenly a plague of beetles are destroying all the lumber. We will be continuing this housing conversation next with Brookings Institution fellow andre. His thoughts on the impact of devaluation of blackowned properties. This is bloomberg. Continue ours discussion on housing. According to research from the Brookings Institution, homes in black neighborhoods are undervalued by 48,000 per home on average. A fellow at brooking and the price,f know your andre. Erry joiningndrie p us now. Your book and the research you have done on this really do eliminate some of the disparities we have. You can trace that back through housing. You can go back to the freedmens bureau, some of the broken promises there. The redlining, some of the issues our parents and grandparents dealt with in past decades. I wonder if you can put a number that quantifies the broader impact on the community and american prosperity . Andre what i did in my study that anchors the book, i looked at housing prices in black neighborhoods where the share of population was greater than 50 . I compared those prices to areas where share is less than 1 . I controlled for everything from education, crime, walk ability. What we have found, homes in black neighborhoods are undervalued by 23 . Pat 156 billion in lost equity. We know that individuals use that equity in their home to invest in college. It would have paid for more than 8,000,004 year degrees based on the average amount of a fouryear public education. It would have funded more than 4 million businesses based on the average amount blacks on to start up their firm. It would have fixed the pipes in flint, michigan, 3000 times over. When we talk about what needs wealth of a we should look to the policies that created wealth for some and limited it for others. Caroline part of the metropolitan fellow program. Your view as we head to the dnc problemswhat are the that start to target this issue . Andre you will see democrats in particular focus on structural inequality. Thatwill make an argument you need to level the Playing Field in order for people to take advantage of markets and housing. There are millions of people buying homes but they cannot reap the benefits of the American Dream as a result. You need to have programs and initiatives that invest in the people who are hurt by this market. So i have been recommending to have microloans. Programs where you can get low income renters and convert them into homeowners. Areas can do that in where you have a number of homes that are valued at a price that banks will not back in terms of a mortgage. How they need to show can establish new loan product, new credit scoring systems, in ways that allow renters to convert into owners. Joe what about regulatory responses either directed toward banks or the real estate energy, realtors. Appraisals are something that really gets to the pricing. Error thatn contributes to that difference in price is not corrected, you will see technology really step into this arena. Transformer and lyft the services for black residents in terms of taxis not responding to us, you are going to see Technology Step into this arena. Biasesyou have the same from the programmers as others, you will get the same result. Romaine i am curious about that aspect. Technology has been a great equalizer in some areas of our economy. But at the same time, we know that there are a lot of inequalities that have arisen. What are some of the main risks that you would see if it was oft of led by the tech side our society . Foremost,st and remember that these are jobs that will be lost. But lets be clear. Appraisers in this country are white. Clearly, representation matters. The federal government should have some interest in setting up a fund to diversify the field. They also must have some interest in making sure you diversify the number of programmers and software developers. If you do not correct for the bias on the front and, you will get it on the back end. Joe we talk about housing being this key pillar of the American Dream. With these disparities that you identify, what are the followon consequences as a result of areasin black dominated being so underdeveloped impaired to white areas . Thee first and foremost, neighborhoods themselves, municipalities use the revenue generated through taxes really based on the price of the home. Only are billion, not families losing out, these municipalities are losing revenue. When you have individuals not having the discretionary resources to really uplift themselves, and you have communities doing the same, you see communities starting to tax more. Placing residents in a tax trap. We have to correct for this problem. But you cant wave a magic wand because essentially you would lock out low income residents from buying them. We have to figure out ways to add value for people who are burdened by this phenomenon. Just like we got all of the depression and the 1930s, we invested in low income folks. Wecan do the same thing if identify the folks that really do need the kind of stimulus that will uplift not only individuals, but the economy as a whole. Caroline we are looking at pictures that are reminiscent of brooklyn, particularly crown heights. I hate this word, but gentrification. When anou ensure that area becomes vibrant, that people who lived there all the time a lot of it is making sure that they are homeowners at the point that the price point takes off. But how do you ensure that we still get that level of selfimprovement and making it such an attractive area that all people win . You really dont change that phenomenon unless you make direct investments in people. Investments in place or program withoutve values up giving people the same kind of resources to move along with that market. You need to invest directly in the people in the form of low interest home loans, microloans to current homeowners. Drive prices in a way that really pushes people out. Again, just like the 1930s, make direct investments. Cut the checks to individuals and business owners. That is how you spark the economy. Nobody is worried about gentrification when you own a home, own a business. You are not worried about folks moving in driving up prices. Caroline great to have you with us. Ry, fellow at the Brookings Institution and author of know your price. Next, we turn our attention to the coronavirus. Florida allifornia, showing signs that their outbreaks are easing after a summer surge. This is bloomberg. Romaine welcome back. Here in the u. S. , some sun belt states are showing signs that the coronavirus outbreaks are easing. We are seeing slowing in states like florida and arizona. Joe has one chart that we might have missed. Joe i think it is interesting, because of course we saw this huge collapse in Economic Activity when the first wave hit in spring. Theivity just did not same way. The opentable data, this is texas. It did fall in june and july, but not that much. Higherhas been powering throughout the last couple of months. There you see it at the end of august. You have to exclude that one spike in june. Dining in texas is at its highest level since the crisis. It is something to consider as we continue to see flareups and hotspots around the world. Caroline quite amazing when you think about that reaction in texas, what with think about what is happening in new zealand at the moment, they go to 17 and shut down auckland entirely. In europe, there is a lot of fear about the risk of resurgence. You have greece restricting hours of bars and restaurants. France warning that all of the countrys virus indicators are trending upwards. So what about europe . Our next guest thinks shutting down the economy is the wrong way to target covid19. What are you making at the whatt of the reaction, happens in europe, the travel and leisure being impacted, and holding back any sort of vshaped bounceback . Instead we are seeing this plateau about 10 or 15 lower than where the economy was for restarted. Closing down the economy is proving to be a very blunt instrument. Think the experts have learned quite a bit about the virus, who are the vulnerable populations. What i think we should think about doing, maybe get the economists together with the epidemiologists and figure out a way to surge resources to where they are needed and implementing the right social distancing at everything else. Just this shuttering of the , anomy and closing it down sledgehammer, it seems to me. From a we have heard lot of prominent politicians in the u. S. That basically any shutdown at least nationwide is out of the question. We have seen certain countries and cities, including in asia, more or less remain open when working through the crisis. They have managed to sort of blunt some of the bigger impacts. I am wondering, what is the model for doing that when you keep people safe and keep businesses operating . A learning byre doing, incremental approach. We took this approach in march, a lot of the countries, sheltering in place, shutting down activity, travel, everything else. That is obviously aimed at stopping the spread of the virus. But this virus seems to be mortality 80 90 of depending on the country, age 70 or older. Caroline mentioned new zealand. Australia is going through a very sort of draconian lockdown at the moment, particularly in melbourne, victoria. It is very concentrated in nursing homes, in some of the hotels where people have been quarantined. Just need to mobilize the information that we have in each country, in each city, in each state, and target on where are the hotspots, where are the issues that need to be addressed, and surging resources toward them. The economic damage is just enormous. The numbers that we are seeing, the gdp and unemployment numbers, not only are they the worst since the Great Depression , they put the Great Recession into the shadows. But the deterioration in the economy is much faster. We never saw such a big spike in unemployment, even during the Great Depression. I think we need to take the economic losses into account as well because they will have over time their own probably dire Health Consequences as well. Joe there has been a lot of optimism lately towards europe. Largepect is that, by and , the virus has been well suppressed. Fiscal optimism about burden sharing. For the first time, euroarea countries will have a joint effort. Is this the start to sort of more sustainable economic architecture in europe . Paul i think it is moving in the right direction. The problem in the euro area in particular, 19 countries out of 27 countries in the eu of it has formed a fully fledged Monetary Union but did not form a fiscal union. Ever since the sovereign debt crisis in 2010, it is bits and pieces of a fiscal union, fiscal risksharing have been put in place. Euro packageion that was put together, which also has the European Union able to tap Capital Markets on a larger scale than in the past, i think is a welcome step. My concern is really twofold. We are not really getting the democratic legitimization of these moves toward fiscal union. They have done a little bit by stealth. Day,nk, at the end of the because this involves national sovereignty, at some point the people have to be brought into this conversation. Second, is this a little too slow, too late, even the 750 package does not start to kick in until next year and for the next two years after that. But if you look at the magnitude, they really dont move the needle on the recovery in the euro area. The best we can hope for is a template of something much bigger later on. Caroline thank you. Senior fellow at Harvard Kennedy school. That is all from our new, improved whatd you miss . With joe back at the table. Bloomberg technology is next. Romaine welcome back, joe. This is bloomberg. Emily welcome to bloomberg technology. Techstocks climbing with Companies Like amazon and google driving the gains. The president has renewed criticisms of amazon, claiming the financial giant is putting pressure on the u. S. Postal service. It could be the opposite with amazon keeping the Postal Service in b