Original subtitles

Hi, there. Welcome to the show. Still coming to you from this blank void, the

whitest thing on TV this week, aside from Nancy Pelosi desperately trying to

pretend that she knows the words to lift every voice and sing.

It's been a busy week. Juneteenth was declared a federal holiday, the Supreme

Court upheld Obamacare for the 400th time, and Joe Biden had a summit with

Vladimir Putin prompting this uplifting moment.

Do you think that at this present stage we can talk about a new stage

of bilateral relations?

There is no happiness in life. There's only a mirage of it on the horizon.

Wow, that is a dark answer. But I can't really say I expected anything less from

a man whose very face screams, I enjoyed the Joker film.

Because of course Putin dropped bleak Tolstoy quotes.

That's very on brand.

It would have been much more shocking if he'd said, follow your bliss, or it's

wine o'clock somewhere, or Navalny, you have the floor.

But instead of that, I want to focus on Japan, the country which gave the world

karaoke, the best way to learn which of your coworkers is irrationally

overconfident in their singing abilities.

Love on Top by Beyoncé?

The fuck do you think you are?

Tokyo is set to host the Olympics in just a month. They were originally

supposed to take place last summer, but didn't due to... you know.

And yet, despite the fact that the pandemic is still very much not over,

the games seem to be going ahead.

And not everyone in Japan is thrilled about that.

Tonight, Tokyo Olympic organizers say the games are a go, with music, metal

trays, and uniforms.

The possibility of these games going on is 100%. But popular protests

demand they be stopped, with Shigeru Omi, Japan's version of Dr. Anthony

Fauci, saying the situation is not normal.

A daily death rate higher than when the games were delayed last year. A slow

vaccine rollout. Now, with half a million shots each day, but the true

target twice that. Yeah, that's not good.

In fact, only 6% of the Japanese population is currently fully

vaccinated. And while I don't know what the target percentage should be to

safely host the Olympics, I'm pretty sure that right now, it should be higher

than the number of entries in the Fast and Furious franchise.

So, it's frankly no wonder that polls have shown many of the Japanese public

oppose holding the Games this year. And perhaps no one represents that sentiment

better than this YouTuber.

I mean,

that's excellent.

Just tens across the board.

Inexplicable side dive, ten.

plugging his ears instead of his nose? Ten.

Shouting an Aerosmith lyric before his body is consumed by a very shallow

lagoon? Ten again from me.

If the Olympics simply have to happen, I want that guy to be the entire opening

ceremony. Just him, alone in a stadium, screaming Aerosmith jokes while

occasionally jumping into water for four solid hours. I would watch every second

of that.

The Olympics going ahead is undeniably risky, but the organizers seem to be

considering a lot of different factors, with many being financial.

Especially as Japan's already officially spent over $15 billion on these games,

with government audits suggesting it's actually twice that much. And the truth

is, even if Japan wanted to cancel, it's not quite that simple.

The Olympic host city contract signed between Tokyo and the IOC in 2013

doesn't give Tokyo the power to scrap the games.

Only the IOC holds that right.

Yeah, it's true. Japan doesn't technically have the authority to cancel

the games.

Which is kind of weird. It'd be like if your child got the flu, and you tried to

reschedule their birthday party, only to get overruled by the clown you hired.

Hey, I don't care if you got the bubonic fucking plague, from 2 PM to 5, you're

on Bozo's clock, bitch!

To promote safety at the Games, a ton of precautions are being unveiled, from

barring spectators from abroad, to encouraging people to keep a two-meter

distance from athletes at all times, to requesting attendees support athletes by

clapping instead of singing or chanting, which is a real shame, because as anyone

will tell you, half the fun of watching the men's trampoline final is the

raucous bonding with your fellow tramp heads.

And while some of those precautions will hopefully do some good, I will say

others have absolutely no chance.

Olympic organizers typically give away tens of thousands of condoms during the

games for all the athletes, but this year there is still going to be a condom

giveaway, but they are telling the athletes not to use them until they get

home. Well, good luck with that.

Have fun selling that message at the condom booth.

Hi there, 20-year-old Adonis with the physical stamina of a young gazelle.

Welcome to what is essentially a lightly monitored dorm floor that you'll be

sharing with some of the most chiseled bodies on the planet, all of whom you'll

likely never see again.

Here are some free condoms, but please make sure that you save them until I see

that you're already fucking. Okay, well, please at least move to the side. There

is a line behind you.

But I guess it is good news that they are still handing them out, especially

for Japan's top condom makers, who apparently saw the Olympics as an

extremely precious opportunity to let the world know about Japan's high

-technology prophylactics. Although I will say, I'm not convinced they needed

the Olympics to do that, because Japanese condom ads do a pretty good job

selling their products on their own. Take a look at this.

Yes.

That was part of an anime web series produced by Japan's leading condom

manufacturer, Okamoto, in which a condom battler named Goro finds a magical

rubber on the ground which turns into a suit of protective armor that he wears

while battling a bunch of anime villains.

So, you know, just your average educational contraception themed sci-fi

action cartoon ad for Japanese cock socks about an anime war in which the

dress code appears to be latex casual.

All of which they claim is to be continued, or as that ad says, to be

condom. That is so much more fun. than sex ed is here in the United States,

where it's usually, here's a condom, here's a banana, let's never speak of

this again.

But the fact is, despite protests, it seems like the Olympics are going ahead.

And all of this is a pretty good reminder that hosting the Olympics is

just never a good idea for a city. And it's not like Japan needs the Olympics

to boost tourism.

It's Japan.

It's already got Mount Fuji, bamboo forests, and the world's wettest

comedian. Who would not want to visit?

And while I truly hope for everyone's benefit that this works out, you can't

help feeling that the main motivator in this event taking place is money. So,

will it be worth it?

Well, I guess all we can really say at this point is, to quote my new favorite

web series, that is very much, To Be Condom. And now, this.

And now, please enjoy some better names for the dogs from this year's

Westminster Dog Show.

Raisinette.

Beef. Captain Jean-Luc Picard.

Drama.

Good Carl.

Bad Carl.

Cuban exile and CIA asset Antonio Vecchiana claimed he witnessed a high

-ranking CIA officer meet with Lee Harvey Oswald in September of 1963.

Smooth Chris.

Crime.

Ragnaroth, Devourer of Souls.

Dennis.

And Jennifer Aniston.

Moving on. Our main story tonight concerns home renovations.

There are big commitments that always turn out great, unless, that is, you're

on trading spaces, in which case they can turn out like this.

We are in the room. Okay?

Open your eyes and see your new family room.

Wow.

You're that disappointed?

Well... I'm glad.

Wow, that's a shame.

Kudos to Pam there for being gracious enough to step out. She's showing a

level of restraint that those designers very much did not.

Because why is that fireplace opaque?

Who would look at a sexy flickering fire and say, great, but what if it was

blurry? Also, that is just too many candlesticks. The whole room is a

windowless inferno waiting to happen.

It's deranged, it's unsafe, and frankly, Pam deserved better.

But specifically, we're gonna talk about a way to finance home improvements

called PACE. It was originally designed to provide low-income homeowners a way

to make their homes more environmentally friendly.

And to explain more, here is Netflix's very own Barack Obama.

We're making it easier for American homeowners to take advantage of a new

program called PACE.

Here's how it works.

If you make the switch to solar...

you can now install solar panels or retrofit your home to make it more

energy efficient at no upfront cost, all by paying for them through the future

savings on your energy bills.

Well, that sounds like a great program for homeowners.

And by the way, if you are under the age of 35, let me quickly clear up your

confusion here. A homeowner... is a person who owns their home. They don't

rent it. The house belongs to them. Like your parents. You know how your parents

live in a house where they don't have a landlord and they don't have to sign a

lease and they don't pay a security deposit?

It's like that. It's their house.

Don't worry, though. That will never be you. You're not allowed to do that.

America decided a few years back that if you're born after 1985, you don't get to

own a house. You do get to rent apartments for the rest of your life,

though, as you gradually pay off the student loan debts from your liberal

arts degree. That's the thing that you get to do.

So, if you're under 35, you can actually skip this story. Don't even worry about

it. Go fight with a 15-year-old on TikTok about the coolest way to part

your hair. Your life is sad, and that's okay.

PACE, though, stands for Property Assessed Clean Energy, and the idea

originated in California as the brainchild of this guy, Cisco DeVries,

the former chief of staff to the mayor of Berkeley, who described himself as a

capitalist hippie, which absolutely tracks for a guy whose name sounds like

he's about to gentrify jazz.

They're actually...

two PACE programs, one for commercial properties, and one for residential

ones. And we're gonna focus on the second one, where there are huge

problems. Because after a trial run in Berkeley, the residential PACE program

exploded across California.

In just the second half of 2014, lenders issued $148 million in PACE loans, and

just a year later, as more counties across the state signed on, that number

quadrupled to over half a billion dollars.

Right now, these three... Some states have active PACE programs, but plans to

expand to other states, including New York and Ohio, are very much in

development. And that should be a cause for real concern.

Because when PACE loans go wrong, they can go very wrong.

Take this California couple who ended up losing their home.

They say their problem started when a contractor turned up at their house,

pitching a PACE-funded improvement.

Their house badly needed a new roof, so they signed up. I thought it was a

wonderful thing.

It was just really a godsend.

One thing led to another.

Once he saw the roof, he says, well, looks like this wall.

Then it was the floor. Well, I think there's some damage there. Then a few

months later.

Jumped our mortgage payments, $600 a month.

Our life began to unravel at that very moment. My thought is that we're going

to want to open a tent. Look.

There are some situations where the idea of ending up in a tent is exciting. If

you're going camping, for example, or seeing the circus, or walking into the

forest to finally abandon society forever and live among the trees. But it

shouldn't really be the desired outcome when you're just trying to fix your

fucking roof.

Unfortunately, the story of Pace is a cautionary tale about how good

intentions, when not paired with careful, smart design, can end in

disaster. And given that Joe Biden promoted the program as vice president

and promised on his campaign website to expand the utilization of PACE, it

seemed that tonight, it might be a good idea to take a look at it. And let's

start with how PACE works.

Because basically, it's money designated for repairs or upgrades to your house.

The average PACE loan is about $25,000, and repayment periods usually stretch

between five and 25 years.

But the way you pay it back... is both unusual and very complicated.

Even though I've already called it a loan, it's technically a lien on your

house, a kind of debt directly attached to your property, in which, in this

instance, you gradually pay back through your property taxes.

And ads promoting Pace have liked to put that fact front and center.

Your house is actually borrowing the money, and not you personally.

It's more like the house is getting the financing.

because payments are made through an assessment on your property taxes.

It's as if your house is borrowing the money, not you personally.

Okay, stop, because there is an obvious problem there. Even if your house is

technically borrowing the money, that money comes in the form of property

taxes, and you pay for those. Your house doesn't, because houses can't pay taxes,

because houses don't have money, because they're houses.

It's the equivalent of buying a new sweater and telling the cashier, oh, the

sales tax is on the sweater, so the sweater will pay that. That's not how

taxes or indeed sweaters work.

Those ads are from Pace administrators.

Those are private companies hired by cities to handle the logistics of the

program, including providing financing and approving loans.

Some of the biggest players are these companies, the largest of which is

called... which is just objectively a stupid name.

It sounds like a contemplative jazz album from Kermit the Frog.

But the real origin of the name is somehow even stupider, as a Y Green

representative explained during a local sponsored content segment.

Y Green, I love this. It's easy to remember because it's actually energy

spelled backwards. Exactly. Most people don't figure that out, but a couple of

reminders, they usually get it. Yeah, of course they get it, because it's not a

hard thing to get.

Y Green basically put about as much effort into their name as trading spaces

put into Pam's family room.

there are a number of big flaws in how Pace programs are designed. And here is

one of the first key issues.

While companies like Y Green may promote Pace through ads and SponCon segments,

the majority of actual sales to customers are done by individual

contractors who'll be performing the renovations. And think about what that

means for a moment.

The people with responsibility of pitching a very complicated financial

product, a pseudo-loan... that's technically a tax lien are contractors,

whose training is not in finance.

No judgment here, it's just people are trained for different things. It's the

same reason that you don't ask a banker to re-grout your bathroom tile.

They're going to make a mess.

In practice, the way it usually works is a contractor will approach you, maybe

outside a shopping center, or at your church, or even knocking directly on

your door. And they'll offer to install, let's say, solar panels or a new air

conditioner with the promise of no money down, and that crucially, the

improvements should pay for themselves through huge future savings.

The thing is, though, contractors are not always completely straight with

customers about just how much their property taxes could go up.

They came to my house, they said that I needed the solar system, that it was

gonna dramatically reduce my light bills. When my property taxes came back

in November, I had... I went from $600, uh, property taxes to almost $10,000

property taxes, which I could not pay.

$600 to 10,000. That is not good.

The only time the value of something should change that dramatically is if

Elon Musk shits out a tweet about it. We truly live in the best possible system.

But also, it seems pretty unlikely solar panels are gonna cut her electricity

bill by $10,000.

In fact, for all of the talk about how pace improvements will pay for

themselves, there is a fundamental flaw there, as this professor who has studied

them will tell you.

A foundational flaw of the PACE program is that there is no independent energy

audit required of a home before home contractors can start suggesting all

sorts of things to do to it. Some of these things are maybe put in incredibly

expensive high efficiency windows, even though the existing windows are not the

main source of energy waste, and you would do much better just caulking a few

leaks. Exactly.

There is no independent party required to assess whether your renovations would

cut close to enough energy costs to be worth it, which really seems like

something you'd want verified by a third party.

It's the same reason that we have independent health inspectors put a

letter grade outside a restaurant, as opposed to letting the owner put up his

own sign that says, trust me, it's clean.

And that actually brings us to the next key quirk of the PACE program.

Because if those energy savings don't cover the additional taxes you incur,

you could be in big trouble.

Remember those ads about how your house pays for the financing, not you?

What that means is your house is now the collateral for the debt. So if things go

wrong, you could well lose your home and, you know...

end up in a tent.

And there are far fewer protections to prevent that than you might think.

Because this is a tax lien rather than a loan, the financing isn't subject to the

same consumer protections that you would get with a standard home loan. So, for

instance, in Florida, the state doesn't require PACE providers to explain the

cost of improvements, check if the people who sign up can actually afford

to pay back the money, or if they even understand the terms.

And Pace administrators will insist that they do all of those things anyway, that

they're diligent about vetting homeowners, the projects that they take

on, and their ability to repay.

But there are so many examples of failures to do that. Thanks to Pace, one

Missouri homeowner wound up with $25,000 of debt on a home that was appraised by

the city at the time at just $8,400.

And if at this point you're wondering why on Earth... people sign up for these

loans is because they're often presented as a government program, one that,

remember, President Obama promoted, which might instill a false sense of

security. They did mention a government program, and that's why you hear

government, you think this is an awesome deal.

And you don't expect...

what happened happened.

In a hidden camera investigation last May, we caught contractors touting

claims of government programs.

So because of what you have going on, this government problem could actually

help you. Oh, that is a government problem. Yeah. When we showed up, the

sales pitch was over, and they had some parting words.

You suck, by the way. Look.

I'd say I felt bad for that reporter who was clearly just doing his job and was

then met with a man berating him from his compact Toyota.

But think of it this way, at least now he knows what it's like to be a woman on

the street who doesn't smile back.

And if all of this is starting to feel potentially predatory, that's because it

often is.

And if you know anything about the history of predatory lending, it will

not remotely surprise you to learn that an analysis of one of the largest

markets for PACE in Florida found that many of those with the highest debt

burdens under PACE financing were found to be in majority-minority zones.

And it doesn't stop there, because contractors have also been accused of

targeting neighborhoods of non-English speakers, senior citizens, and even

those with intellectual disabilities like this man, who, as his lawyer points

out, absolutely did not understand what he was signing up for.

It's very apparent from speaking with him that he doesn't understand these

loans. He doesn't understand the contracts that he entered into. He had

kitchen remodeling done, and he doesn't even cook. He gets meals on wheels.

He doesn't use his kitchen. He's a nice guy.

He wants someone to talk to, so he invites them in. He talks to them, and

they talk him into, hey, you need these windows replaced. You need your kitchen

remodeled. Look.

I get that you're on his side, and I do appreciate that, but your client is

sitting right there.

Someone should, at the very least, have thought to move that interview outside.

The number one rule of talking about someone behind their back is that their

back should not be anywhere in your immediate vicinity.

And companies routinely defend themselves by arguing that they disclose

everything clearly and that people simply shouldn't sign these contracts if

they can't understand them. But that's a little disingenuous when their whole

operation so often emphasizes speed over slow deliberative consideration.

These companies' websites brag about their super-fast approvals or their

speedy approval process, or make claims like, get approved for Y Green financing

in 30 minutes or less.

And the clear implication there is you can basically get... you money like

that. Oh, shit.

Oh, for fuck's sake. I'm sorry, George. I snapped my fingers without really

thinking. You know I'm busy, right? I do. I do.

Actually, what are you up to right now, George? Anything fun?

Yeah.

Fair enough.

The point is, though, a common sales tactic here... is fast approvals.

Contractors often go door-to-door with a tablet, encouraging people to sign

electronically. And in one company's video, a contractor talks openly about

just how fast the e-sign process is.

I just take the people to the adopt and sign portion of it, have them pick a

signature, sign all the remaining pages, and we're done in just a matter of

minutes. I was in a house in Rialto...

The patio door was open behind me, the rain was pouring, the TV was on loud,

three dogs barking, four kids yelling, and we got through it, and I fell in

love with the E-Sign program after that.

Oh, I bet you did.

Although I'm not sure look how easy it was to get this stressed out homeowner

to sign a legally binding document is quite the flex he seems to think it is.

There are indeed several things you can do in a matter of minutes while four

children are screaming and three dogs are barking in the background. You can

schedule a grocery delivery or have a tense eye contact only argument with

your spouse or like an Instagram post from an ex announcing they're making

music now, then...

find that ex's music on SoundCloud, then send that ex's new songs to your group

thread, then watch as they mercilessly tear Tevis's amateur EDM tracks a new

arsehole. All of that can be accomplished under those chaotic

circumstances, but signing up for a massive lien on your house from a guy

who is in love with his iPad probably shouldn't be.

Because this isn't like agreeing to the terms and conditions of an iTunes

update. This is like sitting across the table from a banker potentially signing

your house away.

The problem is, the incentives just aren't really there for contractors to

make sure that the people that they're selling to can actually pay back the

loans they're taking on.

Especially because in the final quirk of this program that makes it so dangerous,

the PACE loan isn't just a lien on your house, it's what's called a priority

lien. Meaning that, in the event of a foreclosure...

Pace lenders get to collect their money first ahead of the mortgage lender or

anyone else.

The fact that that's the case enables companies like Y Green to bundle that

debt together and sell it on Wall Street as a very safe investment because for

those investors, it's a near guaranteed return.

But for homeowners themselves, it can spell complete disaster.

For one thing, it can make it much harder to sell your house because no

one... wants to buy a house where they lean on it for tens of thousands of

dollars for renovations that might have been done a decade ago.

If you are house hunting and you find that out, it's like hearing the realtor

say, here's the garage slash meth lab, or here's the basement where the

kidnapped kids were chained up, or here are the popcorn ceilings. It immediately

kills any appeal the house ever held.

And it's not just homeowners raising the alarm here. That priority lien placement

is the primary reason why, in 2010, Fannie Mae and Freddie Mac stopped

backing mortgages on homes that had PACE loans.

And this is yet another potentially devastating consequence to a system with

no real accountability baked in. Remember that California couple?

Here is their contractor explaining why none of what happened to them is his

fault. Did you as a contractor, though, ever confirm if they had the ability to

pay? Because this is an older couple on fixed income. They say there's no way

they could have paid for the work that you took on in their house.

What you should do, I don't qualify people.

Pace qualifies people.

Well, there's a lot of passing the buck here because... No, there's no passing

the buck, miss. What you should do is talk to Y Green, who they had the

contract with. Well, hold on there.

Because it's pretty bold to claim there's no passing the buck, only to

immediately then pass the buck.

It harkens back to that famous sign in Harry Truman's office, the buck stops

here, with Larry down the hall.

He's the one who handles all the paperwork.

You should really go talk to him.

The point is, every player here... is perpetuating a cycle of zero

accountability. The Pace administrators blame the contractors, the contractors

blame the administrators, and sometimes, the finger of blame gets pointed

directly at the customers themselves. Because here is where, legally, I have

to tell you that Y Green, which is energy backwards, by the way, it's very

clever, insists that they have... rigorous disclosure practices, exercise

robust oversight over contractors, and have never personally foreclosed on a

home. They also insist that that couple received all the appropriate financing

documents and that they...

not Y Green selected the contractors to work on their house. Sort of implying

that it was all their fault. Which is pretty hard to take, given that Y Green

selects which contractors it allows into its program.

If your seafood restaurant sells tainted lobsters, they shouldn't get to shrug it

off by saying, well, you picked the one you wanted out of the tank, when they

put those lobsters in there in the fucking first place.

And companies are always going to insist that this is just a problem of a few bad

Apple contractors, and that they are always improving their processes.

But I would argue the flaws of this program are baked into how it operates.

And no one knows this better than tax collectors, because they are the ones

who end up having to collect on the debts homeowners rack up. And they can

be the ones having to do the foreclosures.

Just listen to this Missouri tax collector begging his county to get rid

of its PACE program just last month.

I can tell you what the facts are going to be. The more of these that you have,

some percentage of the people will lose their houses. And you can make the

consumer protections better, and you can make them a little more rigorous. But at

the end of the day, some people will have their homes taken from them. I

think the bottom line is that there is no circumstance, in my opinion, in which

it makes sense to offer the county's power to take your house in return for

getting you money to to buy a new air conditioner or a solar panel or whatever

it may be.

Exactly. Nobody in this country should be losing their home because of an air

conditioner. They should be losing their home because of unexpected medical

bills. You know, like an American.

And all of this may be about to come to a head if foreclosures begin to rise in

the wake of the pandemic.

In fact, one Florida tax collector has even warned that Pace will become

Florida's next mortgage crisis if we're not careful, which is chilling. Because

the conditions are primed for a disaster, but it seems like we're not

doing anything to stop it. It's like how we inexplicably let Harrison Ford

continue to fly planes.

We all know what's going to happen. Somebody do something before it's too

late. So, what can we do here? Well, we could try some reforms like stopping

door-to-door sales, but the truth is, as that guy said, people could still end up

losing their homes.

The tougher question might be whether or not reform is even worth it. Because for

the record, PACE isn't even the only way that low-income homeowners can get help

to finance green energy upgrades.

Nationally, there's the Low Income Home Energy Assistance Program and the

Federal Weatherization Assistance Program, or WAP. as it's known to

absolutely no one.

And in Florida and California specifically, there are several programs

that can assist low-income households in energy funding.

The point here is, if you, your parents, or anyone you know is considering a PACE

loan, you should definitely see if you or they are eligible for programs like

these first.

And if you live in a county that is thinking of implementing a PACE program

with for-profit administrators, do whatever you can to stop it. Because the

fact is...

This business model is fundamentally flawed.

And I'm not saying that affordable clean energy isn't something we should be

investing in. It absolutely is.

But we shouldn't be putting vulnerable people in a position where they are

risking their homes.

Sadly, this is yet another example where a well-meaning public program has been

corrupted by the presence of private companies. And if they come to where you

live, you would be well advised to tell them to cuff foe.

It's actually, fuck off backwards.

Most people don't figure that out, but after a couple of reminders, they

usually get it. And now, this.

And now, the winner of best in show at the Westminster Dog Show breaks

newscasters' brains.

So, I thought it was...

I mean, he's pretty, obviously. He's very beautiful.

It's just like hair on the floor.

It looks like a head of hair. Like, Amber, I picture yours or my hair just

walking on the ground with no legs. I can tell you. Like someone's wig is

controlling their brain, and then it jumps off and scurries off. Like alien.

Yeah. He is gorgeous.

He's just so weird.

Super odd looking, but good for him.

That person.

probably spend more time on that dog's hair.

And money. Or money, yeah. The three of us combined and we do TV every day.

I'm not into that.

It's just not cute. That is so ugly. That is such an ugly dog. No offense to

anybody. Well, you can't say that's an ugly dog and then say no offense.

You've offended. I don't mean it to be offensive.

It looks like a walking wig.

Yeah, it looks like a cousin it. The very unique look that Wasabi has.

And what do you mean?

What? What do you mean unique look?

Furry.

You mean smushed face?

I was asking a serious question.

Yes.

That's our show. Thanks so much for watching. We'll see you next week.

Goodbye.