Real estate developers say affordable housing could soon become more profitable
They cite rising costs for land, materials and labor, as well as increasingly restrictive zoning regulations. So-called NIMBYism (an acronym for "not in my backyard"), is also on the rise, with residents fighting affordable housing in their neighborhoods, where home values have soared in the past five years.
"This is a tough time, I think. All of real estate is being challenged by higher interest rates and by higher construction costs, and, by the way, the building department requirements and all the frictions that are making real estate difficult," said Jonathan Rose, founder and CEO of the Jonathan Rose Companies, a real estate planning, development and investment firm.
"But there's also a lot of support, and our job is to weave the pathway in between the complexities, the challenges and the opportunities and find the pathway through," he said.
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Developers like Rose just got some more of that support from the recently passed tax and spending bill. It expanded the Low-Income Housing Tax Credit, by increasing the amount of credits available and lowering the financing requirements. Specifically, the legislation permanently increased the 9% credit allocation to states by 12%. Developers sell these credits to investors in order to help finance their projects.
"It's a big boost for the creation of more affordable housing. In fact, the United States has a shortage of about 10 million units. This won't solve the whole 10 million unit problem, but it'll be a big help," said Rose, adding that he sees a growing opportunity for investors in the space.
Affordable housing advocates applauded the bill's passage, saying that the LIHTC remains the nation's most effective tool for building and preserving affordable rental housing.
"This legislation delivers a significant expansion of the credit by incorporating key elements of the Affordable Housing Credit Improvement Act, aimed at boosting the supply of rental homes across urban, rural and tribal communities," said David Dworkin, president and CEO of the National Housing Conference, in a release.
Dworkin pointed both to the expansion of the credit as well as changes to another tax credit for developers that would make it easier to qualify for the benefit.
"Together, these changes are expected to produce or preserve more than 1 million additional affordable rental homes between 2026 and 2035," Dworkin said.
There does appear to be strong investor demand in the affordable space, both in new development and renovation. The Jonathan Rose Company recently closed a $660 million impact fund, "dedicated to acquiring, preserving, and enhancing affordable and mixed-income multifamily housing in high-demand urban markets across the United States," according to a release.
Rose said he is seeing increased interest in housing-related investments from family offices and foundations.
There is, however, a new wrench in the works. The Trump administration has proposed a $27 billion cut in federal rental assistance programs for low-income tenants. That is reportedly already causing some lenders to pull back.
The cut would need to be approved by Congress, and Rose notes that the House has had longstanding bipartisan support for funding affordable housing.
To his point, the Senate Committee on Banking, Housing and Urban Affairs announced Friday it is moving forward on new bipartisan legislation to expand housing supply and address affordability. The package includes removing regulatory barriers to housing development and providing funds for communities that are building more housing that can be used for water and sewer infrastructure. The legislation, however, is aimed more at making for-sale housing more affordable and less at helping build more low-income rental housing.
And even still, the new tax incentives for rentals won't help NIMBYism, which appears to be rising right along with home values. Even mixed-use buildings, which have a small percentage of units designated as affordable, are seeing pushback from neighbors concerned that any such housing will damage current and future home values.
Even before its expansion, the LIHTC gave developers incentives for more mixed-income buildings, with certain units designated for affordable housing and others at higher price points. Rose said this type of higher-quality, better designed, greener developments benefit owners in the long run by lowering operating and capital costs.
"One of the reasons why communities oppose affordable housing is because a lot of affordable housing – it was built in the '60s, '70s and early '80s – was cheap and ugly, and I wouldn't want it in my neighborhood either," said Rose. "We're deeply committed to creating beautiful buildings."
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WHEN: Today, Friday, August 8, 2025 WHERE: CNBC's "Squawk on the Street" Following is the unofficial transcript of a CNBC exclusive interview with Paramount Skydance Chairman & CEO David Ellison on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, Friday, August 8. Following are links to video on and All references must be sourced to CNBC. DAVID FABER: Well, as we, of course, have told you, Paramount and Skydance have officially completed their merger. Long wait there. David Ellison taking over as the company's chairman and CEO as of yesterday. And he joins us now in a CNBC exclusive talking about, obviously, your plans for the company. It's good to have you. Thank you for being here. DAVID ELLISON: Thank you. It's a pleasure to be here on day two. FABER: You know, you and I did have a chance to talk when you first got the deal. That was a long time ago. Finally, I feel like at least you may have some opportunity to sort of expand on some of your thoughts, particularly when it comes to technology, David. You know, you've talked a lot about the importance of technology at the new Paramount. But what does that actually mean in reality? ELLISON: Yeah, of course. So, I'll give you a couple of examples. And look, I want to be clear. When I think about kind of our priorities, we think in order to be able to effectively transition this business, the number one thing we need to do is obviously win on content. And that means being the number one destination for the most talented artists and filmmakers in the world, number one destination for the most important sports rights. But when we talk about technology, what we mean is we want to be the most technologically capable media company. And I think -- and so, I'll give you a couple of examples for that. The company, obviously, Paramount+, being a scale streaming service is incredibly important to our business, right? Right now, the company operates three independent streaming services on three separate stacks on multiple clouds. That is the most ineffective way to do it. And it is also the most expensive way to do it. So, one of the first things that we're going to do is obviously converge all of those platforms on the one unified tech stack in one cloud. And by doing that, we will actually be able to deliver a better experience to our customers. But we will also be able to make the product significantly more efficient. FABER: Yeah. Many of us yesterday watched the rollout of ChatGPT-5, at least the live stream of it. I don't know if you had a chance. You had a very busy day yesterday. But it's hard to imagine a world where AI doesn't exist and doesn't obviously impact your business to a certain extent. Yesterday, you said during your press availability that AI will not be a replacement for creativity. But watching what they can do with ChatGPT-5, not to mention any of the other platforms, do you really believe that will be the case? ELLISON: I really do believe that's the case. FABER: Why? ELLISON: So, first, everything we do, obviously, at Paramount is really about empowering artists to tell great stories. And I think artificial intelligence is a remarkable tool to be able to do that. And I -- and you're right, it absolutely will impact every aspect of basically our business. It's going to impact our platforms, right? When you think about what has been kind of the traditional machine learning for the next 10 years and how frontier models are going to really impact things like search, I mean, you're already seeing that with obviously ChatGPT and Google— FABER: Without a doubt. ELLISON: -- Discovery, how things are recommended to you. We're going to get a lot better at that. And to me, a combination of those two technologies working together. But also, I think when you -- I'll use animation as an example. The main issue right now for professional content creation is all around this notion of controllability, right? You know, the greatest filmmakers in the world are not going to tell stories through text prompts. I just don't think you're ever going to live in a world where that happens. FABER: You don't? ELLISON: I don't, but what I think you will eventually get to is a place where model-based GPU pipelines are going to give you the same level of control that a filmmaker has on set with his camera. And when that happens, you're going to be able to tell better stories because you're going to be able to iterate faster. Like, you know, one of the -- one of the phrases we always took from kind of the early days of Pixar was, you know, be wrong as fast as possible. You know, you get to make the movie about eight times before you release it. You board it over a four-month period of time, you put it up on the screen, you look at it, you get notes, you break it apart, spread the cards, you know, out on the floor and figure out how to make it better and put it back together. Imagine if you could do that 10 times or 16 times in the same amount of time for the same amount of money. You're actually going to allow filmmakers to make, to tell better stories in a more efficient manner. FABER: When does that start? When does that actually really come to bear? ELLISON: So, the answer is we're going to find out, but I think -- I think if you look at it, it's solving that controllability problem is something that's really important to us, and it's going to require deep partnerships to be able to solve that issue. And then I think the other thing, which Sam would probably be better to talk to than me, since you were talking about ChatGPT, but I think the one thing is we're going to get to a world where images can be generated in real time. And once you actually get to real time, some really remarkable things can happen. How fast you can iterate in storytelling is going to become incredibly quick. And you're also going to be able to do amazing things never thought of, like my four-year-old daughter loves "PAW Patrol," like Skye is her favorite character. FABER: OK. ELLISON: You could actually have a 10-minute conversation with Skye if you wanted to, powered by obviously a frontier model. So, I think it's really going to significantly impact all aspects of society and entertainment. FABER: Yeah. I just wonder if, I mean, the ability right now even to create a short video out of AI, if I have a good idea, is there, will only grow in terms of the complexity and the ability to render those kinds of characters. Is it a competition to you? I mean, does long form even matter anymore in a world where I can find anything I want and create whatever I want personally? ELLISON: Of course it matters. I mean, I would actually argue it matters more than it's ever mattered before. I mean, I think if you look at the consumption of basically media, the pie is just getting bigger. And you said the key word, which is idea. And basically those ideas come from filmmakers, they come from artists, and that's not being replaced. I mean, that's not actually what exists in terms of the frontier models. And so from that standpoint, it really is about giving incredibly talented filmmakers and storytellers the tools to basically bring their visions to life. FABER: Right. But we're not there yet. I mean, there's no example you can cite yet, whether it's Skydance or something under development at Paramount that exemplifies this. ELLISON: No, I mean, look, this technology is moving incredibly quickly. FABER: Yeah. ELLISON: I think that's absolutely something that's on the future, on the horizon. But no, that is a problem that people are still trying to solve. FABER: Alright. Let's talk about the future. And for our audience, of course, there's still a public float out there. You are the control shareholder, and your group is certainly. Three to five years for growth, I think, is what you said yesterday. You sort of were pointing to people that. So, what does that mean for the next couple of years in terms of what the future holds for Paramount? Is it just about reorganizing, restructuring, trying to save money? ELLISON: So, I would say it's like, one, we -- yes, we've announced obviously $2 billion in synergies. You know, we're not giving formal guidance today. We're going to do that on our Q3 earnings call. I can tell you those, you know, obviously, we will significantly exceed that number. But I also say you can't cut to grow, right? like, I think we've seen that's a business model that doesn't work. And so what we're going to do is restructure our business to run significantly more efficiently. And then we're really going to invest into our growth areas like studios and streamings and sports. FABER: Right. ELLISON: And so -- and I think what's important between my family and our partners with Gerry Cardinale and RedBird, we own 70% of the economics of this business. So, we are focused on one thing, which is truly long-term value creation. And— FABER: So, you're not going to pay attention to the stock price, I wouldn't think, then? ELLISON: What I would say is we're not going to be in the business of basically managing for the short term. I think if you look at media as a whole, the analogy I kind of like to use is, you know, two things. One, all linear is not equal. I think if you look at broadcast and the power and reach of broadcast and CBS, which is where a vast majority of our linear value is, that's actually not declining or declining very slowly. Cable is obviously being replaced by direct to consumer. FABER: Yes. ELLISON: And so, fundamentally, we have to be in the business of becoming a scaled streaming service and replacing our cable business. That absolutely does have to happen. And we're going to invest in more content to be able to get there. We're going to invest into technology to be able to get there. And I do believe it's going to be that combination of great art and storytelling working hand-in-hand together will ultimately transform the business. FABER: Right. Well, you mentioned obviously Paramount+ is your direct consumer offering, or at least your main one. And it is subscale now, 77 million or so subscribers, not insignificant. But how do you get to scale? Because you're spending all that money on content. It's obviously a lot better to spread it over a much larger subscriber base. ELLISON: Yeah. What I would say is we're really excited with actually where we're starting with Paramount+ and actually want to be really complimentary to the team and artists and filmmakers and the company that we just acquired. I mean, when you look, you know, at the content Taylor Sheridan is creating is truly best in class. Our sports partnerships with the NFL. If you go back to Q4 of last year, when you look at the top 10, according to Nielsen, between the Paramount content engines and the Skydance content engines, we had 40% of the top 10 originals, according to Nielsen. So, we're going to take those content engines and use that to power our platforms, which we think will make us incredibly competitive. But what we also need to do is really rebuild. And we have a great foundation, but we can -- I believe we can significantly improve the user experience for Paramount+ and really how our overall tech stack works. FABER: Well, that will add the subscribers that conceivably you need to take you out of sort of being, you know, smaller. ELLISON: Very simply, you need to increase engagement that comes down to content and storytelling like you actually just, you need to have more and you need to have a better platform to create a better user experience. It's the combination. FABER: You mentioned two things I want to ask questions about both. One is the NFL. My understanding has been, and I know this, there was a change in control provision at CBS in terms of the ownership there that the NFL could come to you and say, hey, we're going to get out of the deal unless you give us more. My understanding is you have reached a deal with the NFL. I don't know what you're paying them. Is that -- is that correct? You have reached a deal. Can you tell us what it cost you? ELLISON: So, what I would say is we have a great relationship with the NFL. And, you know, just to give a little bit of history that I'm not sure everyone realizes is, you know, the NFL is actually now an investor in Paramount. FABER: Right. ELLISON: Through our joint venture with Skydance Sports. I was incredibly grateful to everything the commissioner obviously said at Sun Valley when and all of the feedback we've gotten from ownerships about the importance of our partnership. I want to be clear, though, they still do have an out, but it's not something that we're worried about. FABER: Well, have you negotiated it yet? Is it over and done with? ELLISON: We've not had that conversation with the NFL. What I can tell you, though, is that we're both committed to being partners for the foreseeable future. And as we get there as a publicly traded company, you know, we obviously can't disclose that until we get there. FABER: Understood. It's such an important component, though, as you say, of your overall content. The deal ends in '29, I think the current deal with the NFL. ELLISON: So, there's -- so, everybody has an out and basically, you know, we'll obviously deal with that when the NFL is ready to talk. FABER: Do you think you're going to have the financial wherewithal to keep the NFL for the -- for the -- for the foreseeable future? ELLISON: We believe we're going to be in business with the NFL for the foreseeable future. Yes. FABER: And what about Taylor Sheridan? Obviously, such an important part of Paramount+ in terms of so many shows that he's created for you. You know, my understanding is he may have the opportunity to go elsewhere should he decide to do that, finish up everything he owes to you. Is that a risk for you guys? Have you spoken to Mr. Sheridan about his future plans? ELLISON: So, I have a really good relationship with Taylor and I think he is literally a singular genius and content creator. I mean, when you look at him, he literally has a perfect track record. And so, from that standpoint, I'm thrilled that, you know, we have an exclusive deal with him through 2028. And my goal is to have Taylor call Paramount his home for as long as he wants to be telling stories. FABER: And CBS News, it was just -- ELLISON: Oh, sorry, please. FABER: No, what were you going to say? ELLISON: No, no. After you, please. FABER: OK, good. Alright. We're going to move on to CBS News for a second because it was interesting to note yesterday. First three or more questions from your press availability were all about CBS News. Let me -- let me get your response to this. Commissioner Gomez on the FCC put a press release out yesterday in which she said, "CBS now has a government sanctioned truth arbiter. Their role will be to ensure that journalists at CBS do not criticize this administration or express views that conflict with its agenda." I'd love you to respond to that criticism from the FCC Commissioner. ELLISON: So -- so, that's just very respectfully not with the commissioner, just the very opposite of accurate. I mean, when it comes to news and one of the things I'm truly dedicated towards is being in the truth business and being in the trust business. I think when you think about the legacy of CBS News and 60 Minutes, the home of Walter Cronkite, it is a storied legacy that we intend to honor and carry forward. And, you know, and also when you think about the ombudsman, that's -- which was obviously what -- FABER: Which is what she's referring to there. Yes. ELLISON: Yes. So -- so, by the way, it is not that, it is a vehicle for transparency, not oversight. And it basically is a way for both external and internally for people to provide feedback. And then that gets reported up to the president of Paramount, Jeff Shell. It doesn't get reported anywhere else. FABER: Is it a distraction? I mean, interesting to note you announced your new big deal. It's the first few questions yesterday. Is it a political liability? Is it going to take up way too much of your time given its importance to the company overall? I'm talking CBS News here specifically. ELLISON: Look, what I would say from that standpoint is I think we've been really clear in terms of our dedication to news and independent journalism. But what I will also say and look, I think this is important and this is just I'll talk to me personally. Our number one job is to entertain and inspire audiences around the world. And with respect, I don't believe that that means that they want us to inject politics into everything we do. I actually think they want the opposite. And so from that standpoint, we just believe that if you're breathing, you're our audience and we don't intend to politicize the company. FABER: Do you see that first episode of "South Park" season 27? Did that send shivers down your spine? They came after the president pretty hard. ELLISON: Look, Matt and Trey are singular content creators. And I think over the 27 seasons of "South Park," I think they proved that they're pretty good equal opportunity offenders. FABER: Yeah, without a doubt. You know, "South Park," I mean, you guys own that. You're going to keep it on the Paramount platform. When it comes to movies and the ability to monetize them in that middle window, which I think you currently have. Back to your point about wanting to have as much and control as much content. Do you change your approach in terms of films, for example, and say we're going to own them completely and just take them to Paramount? ELLISON: So, I don't think you can put those into one. I don't think there's a one size fits all approach here. I mean, I think "South Park" is a great bellwether for our commitments, obviously investing in original content to grow and scale our streaming platforms. But when it comes to movies, I'm thrilled that Dana Goldberg, my partner for 15 years in partnership with Josh Greenstein, is going to be running Paramount Pictures. And it's a remarkable team. We actually won a competitive project yesterday with James Mangold and Timothee Chalamet that we're thrilled about, which is really all the credit in the world to Dana and Josh. And we're going to invest into our studios business. And, you know, next year, Paramount's going to have six to eight movies. We want to get that to 15 by 2027. And then also we are looking at how like we do believe in windowing. FABER: Right. ELLISON: So, we think it's important for there to be a window on Paramount+, but also believe that there's significant value to be created in a windowing process. FABER: In terms of third parties. ELLISON: Correct. FABER: Yeah. Your father, how involved is he going to be in terms of your running this company? ELLISON: So, look, I have a great relationship. My dad, he's obviously the largest shareholder here. I have the vote in him, obviously, in running the company day to day. But I literally talk to my father just about every day about the business. He's been an unbelievable mentor. And I think if you look at his track record of long-term value creation, he's a great person to have weighing in. FABER: There's no doubt about that. And finally, David, when you and I sit here, and I hope we will in the future, how should I and how should the viewers at home who perhaps own this stock measure your progress? What do you want us to measure you on in terms of whether you delivered on some of the promises you've made today? ELLISON: So, I think when you come back, you want to look at -- we need to obviously have significantly grown our studios business, significantly grown our streaming business, that we've effectively restructured the company, and that we've really built platforms that are competitive with some of the best that are coming out of Silicon Valley. FABER: David, appreciate you taking the time. Thank you. ELLISON: Thank you so much. FABER: David Ellison, Chairman and CEO and controlling shareholder of Paramount. Want to point that out as well.
