HGTV's New Focus: Helping Distressed Homeowners

May 8, 2009— -- Back in the go-go days of the housing bubble, when homes were gold-plated money machines, you could hardly turn on your TV without stumbling across another way to get rich with real estate.

It was a boom time for TV shows about housing, and no network did it better then Home and Garden Television, or HGTV.

But now, with the days of hand-over-fist renovation budgets at an end, HGTV itself is undergoing something of a renovation, with new shows for niche markets.

For new home buyers taking advantage of falling prices, there's "My First Place" and "Property Virgins." For selling in tough times, there's "The Unsellables." And for creative ideas for keeping the home you're already in, there's "Income Property," hosted by the network's new face, Scott McGillivray.

At age 31, McGillivray already has a decade of real estate experience.

"I got started when I was in university," he said. "A friend of mine and I decided to buy instead of renting, against all advice of friends and family -- 'you're too young, what are you doing, you've got student debt.' But we bought the house, rented part of it out, lived there and then we repeated the process 30 times."

"People need income properties now because equity is gone, people are losing their jobs, and you know, it's a gold mine," he said. "Most people are sitting on an empty basement. It seems like a no-brainer."

McGillivray says people have always wanted income properties as a way to make extra money, but says they "need" them now when times are tougher. Still, HGTV president Jim Samples concedes that the show probably wouldn't have been on the air a few years ago.

"In fact, when I first saw the show I thought, well, this is probably a small group of people who would be interested in this type of a program," he said. "But we took a chance with it."

HGTV, which is 15 years old, had only seen an upward market. The network has had to make a few adjustments to reflect the market.

"We began to emphasize those shows that are design solutions for better living, de-emphasizing those shows that were about quick things to do to sell your house, because sometimes there aren't quick things that you can do," Samples said.

The Harsh Reality of Home Renovations

"Income Property" shoots in Canada, where each week, McGillivray and his team help out homeowners in distress. When "Nightline" visited the set in Toronto, the subjects were young first-time homeowners James Hill and Daria Hopei, whose 1,200-square-foot bungalow eats up more than half of their take-home pay.

"You never like to say you're house poor -- you have such high hopes when you buy your first place and then you get in here and you realize the furnace needs repairing, the roof leaks, and geez I didn't budget for this when I was doing my little cheat sheet before," Hopei said.

Hopei, who works in public relations and Hill, a golf pro, stretched to buy their first home near downtown Toronto and put their wedding plans on hold to pay for it. Then they saw "Income Property" and wrote in, asking for help converting their unfinished basement.

"We thought, what are we going to do with this space?" Hopei said. "We've got plenty of space upstairs, we don't need it. We would benefit a lot from having somebody here and having that income coming in. So the idea got much more appealing the longer we were here."

"Basically, once we finish the basement we will have doubled the size of the house," McGillivray said.

He gave the couple two options for the conversion: a three-bedroom, two-bath model that could rent for $1,500 a month, or a two-bed, one-bath plan that allows them to keep a shared laundry room and extra storage downstairs, but still bring in about $1,000 a month.

They ended up choosing the second option.

While many housing shows like to paint a rosy picture, McGillivray wants "Income Property" to show reality: the huge crew that makes those quick turnaround renovations possible, and the real cost of the work -- $40,000 in Hopei and Hill's case, though they'll split that with the show.

Perhaps surprisingly, fascination with the housing market didn't plummet with the market. HGTV's ratings remain high -- about 63 million viewers, up 3 percent during the first quarter of 2009. Two of its highest rated shows -- "House Hunters" and "House Hunters International" -- indicate that viewers still want to dream.

Did Housing Shows Fuel the Bubble?

Samples resists the suggestion that the number of shows focusing on the home and housing market fueled the bubble.

"I saw some, some discussion of that and thought, well, they're surely attributing a lot of power to HGTV," he said, laughing. "But I do think that generally, in the country, we had this expectation that it would never end. But we always stayed away from shows that were -- we never did a flipping show, for example, where we were encouraging people to make a quick profit on a home. It was more about increasing the value of your home."

Hill and Hopei are looking forward to increasing the value of their house, but as with most renovations, there have been snags along the way. McGillivray ran into some water problems with the couple's basement apartment -- nothing major, but it did require extra money and time. McGillivray said those kinds of surprises add drama and realism to the show.

"This is not super-super traumatic … it adds drama but it also teaches people a lesson which is why we go with it," he said. "OK, we can just solve the problem, and move on and no one would ever know it happened, or we can educate people and say, these are the kinds of things you're going to run into."

It will all be worth it, he reminded them, when the rent checks start coming in.