But there is a sentiment if you think about it, Jade, there’s 600,000 homeless people in America, 600,000 homeless people in America today. And there was a study done by the Benioff Center at the University of San Francisco that was just published. It shows very clearly California has 12% of the U.S. population, 30% of the U.S. homeless population and 50% of the U.S. homeless non-sheltered population. And the Benioff Center went and looked at it and there’s this narrative that says that people who become homeless in other states move to California because it’s got a large social safety net and it’s also got great weather. Wrong and wrong. 90% of the homeless people in California were living in an apartment or a home in California before becoming homeless.
The reason they are homeless is housing affordability. And what we have is an affordability crisis in America today. And what Fannie and Freddie, and HUD have an obligation to do is to provide capital to the market in market rate deals, in Small A affordable deals and in Big A affordable deals to make sure that there is adequate capital to the market to make it so that we do not have the affordability crisis in America that we have today. So the fact that Fannie and Freddie are at 30% of their annual caps through the first half of the year, I think, is a big reason why housing remains unaffordable for many people. The fact that HUD is significantly under its annual, authorized insurance cap is one of the main reasons why we’re not getting more HUD D4 financing to create new affordable supply into the market.
And so as we sit there and look at that letter that came out of the U.S. Senate going to the FHFA administrator talking about a tenant bill of rights, the real focus right now needs to be on capital deployment. One example that’s just incredibly clear as it relates to housing, affordability and homelessness in Los Angeles County, 79% of the property in Los Angeles County is zoned single-family, 79%. That makes it almost impossible to build new, affordable, multi-family. If you go under the spectrum, Houston, Texas has dropped their homelessness rate by 61% over the last decade. And the reason for that is because of the lack of nimbyism and the lack of zoning, which allows for new product to be built. So, if you think about the difference between Los Angeles, California; and Houston, Texas; Los Angeles, California is a great place to be an owner, it’s a terrible place to be a developer or to be a renter.
Houston, Texas is the complete inverse. Houston, Texas is a terrible place to be an owner, it’s a great place to be a developer and a renter. We need Fannie and Freddie, and HUD to lean in at this time to provide capital, the market across the spectrum to make it so that this housing affordability crisis that’s going on in America, gets their capital and brings the cost of renting down.
Jade Rahmani: Thanks for that. One of your peers took a large write-down in its valuation of prior PropTech investments and just wanted to ask about the outlook for GeoPhy apprise how you’re feeling about those two businesses.
Willy Walker: So as you may recall, Jade, the GeoPhy acquisition had a very significant earn out to it. And so as it relates to the value that we actually paid for GeoPhy and then the total value that we will end up paying out for it I do not expect us to have any need to do a write-down on the GeoPhy acquisition given, if you will, the variable nature of that acquisition with a very large earn-out on the backend. That then leads into small balance lending and a prize. It should be no surprise to you or anyone else on this call that transaction volumes in the appraisal business as well as in the small balance lending business have come down as the market has digested the great tightening. And while we are not where we would have liked to have seen those two businesses, we have fantastic teams in both, we are applying the technology every single day to make both of them far more efficient than our larger businesses and we see great growth opportunities in both of them to both scale them with the technology as well as use that technology to help us grow our larger scaled businesses once they get up and going and the technology gets proven.
So feel very good about GeoPhy as well as the investments we’ve made in our emerging businesses.
Jade Rahmani: Thanks very much.
Willy Walker: Thank you.
Operator: There are no other questions at this time.
Willy Walker: Great. Thank you everyone for joining us today. Have a fantastic day. And we’ll talk to you again next quarter. Thanks.
Operator: This does conclude today’s conference call. Thank you for your participation. You may now disconnect.
