The dueling teams are challenged this week to create event-friendly homes that are tailor made for entertaining and hosting. This week, the contestants will work on two Spanish-style homes in North Hollywood, Calif. Team Red, led by site manager Erinn, is determined to end up victorious after coming up short in the first two challenges. Team Blue is feeling strong and confident with all of their original six team members still in the competition. However, they struggle to get along with site manager Elaine's strong opinions. Tensions arise when Elaine turns to opposing teammate Lukas for help with the design of her living room. Nate Berkus invites a "neighborhood council" in to vote on which house they feel is the best makeover. In the end, one member of the losing team will be sent home.