“Our nation has a housing crisis.
Marc Andreessen – A16z
The demographic trends driving America’s housing market are impossible to ignore: our country is creating households faster than we’re building houses. Structural shortages in available homes for sale push housing prices higher, while young people are staying single for longer and increasingly concentrating in highly desirable urban centers. These factors put enormous pressure on rents in the nation’s most dynamic cities, starkly revealing the troubling realities of both sides of the housing market’s two historical models.”
I love this industry. It just never stops giving. In this case, Adam Neumann, the founder of WeWork has decided to turn his attention to residential real estate. It’s called Flow. Plus A16z, basically the Catholic Church of venture capitalists, have written their largest individual check in a round of funding to the company 🤯. This puts Flow’s valuation somewhere north of 1 billion dollars. And Marc Andreessen is going to sit on their board. Oy vey!
When I first read about this I just rolled my eyes. Is Adam Neumann some sort of hypnotist? The rise and fall of WeWork is legendary. My wife and I watched the AppleTV movie, WeCrashed, and loved it (now my wife sometimes tells me “You are a Supernova”.). But I can’t shake this story out of my mind. Details are sparse, but I love this part…
“The first model is: you own a home you call your own, typically with a multi-decade mortgage, near your current employer. IF you can find a house, as these locations often aren’t building new housing. IF you can afford that house, as housing prices in many such places have skyrocketed. And even then, you’re now stuck — you can’t move, even if your economic opportunity or life path wants to take you somewhere else.
Marc Andreessen – A16z
The second model: you rent an apartment, but: it’s a soulless experience; do you even meet your neighbors, much less have any friends in your complex? Does it feel like home, or just a place to sleep? Are you proud to bring friends and family to visit, or hesitant? And you can pay rent for decades and still own zero equity — nothing. There’s a reason the federal government started subsidizing home mortgages: someone who is bought in to where he lives cares more about where he lives. Without this, apartments don’t generate any bond between person and place and without community, no bond between person to person.
Those of you who are regular readers and listeners to my podcast will recognize this is a subject I’ve been talking about for years. We need more ways for people to have ownership of where they live.
I’m sold. My thought is this is a new concept of living. Beautifully designed homes/apts which lean more towards more communal living, where you have co-ownership and can move from one Flow neighborhood to another. Think Divvy Homes /Zeus Living / Curbio / Pacaso.
And I can’t wait to find out more.
Do you think it will be individual apartment-like communities? Or do you think they might include big hedge fund REIT inventory too? If it’s a new concept, it seems like they should have put literally anybody’s name on this instead of his. Maybe they should bring on Elizabeth Holmes as COO 😆