The global housing crisis has made homeownership increasingly unattainable for many individuals, but decentralized finance (DeFi) and blockchain technology may hold the key to solving this problem. The newly established Home Construction Collective aims to leverage the coordination and fundraising potential of blockchain to fund the construction of affordable homes and increase their supply.
In an insightful conversation on Episode 14 of The Agenda podcast, Isaac Lidsky and Erich Wasserman, co-founders of Home Construction Collective, shed light on the housing crisis and how blockchain technology could provide a solution. They highlight that the crisis is primarily a supply issue rather than a pricing one. Estimates suggest that there is a shortage of 4.5 million to 7 million homes globally. Furthermore, an increasing number of homes are being built for rental purposes instead of being sold to prospective homeowners.
This lack of affordable housing has significantly impacted the net worth of younger generations, as homeownership is often the most substantial investment they make in their lifetimes. Compared to renters, homeowners have a staggering 40 times higher net worth. The decline in net worth among younger generations is alarming, with baby boomers accounting for 21% of wealth in their 40s, while Gen Xers dropped to 2% and millennials stand at just 4.8%, including the contribution of individuals like Mark Zuckerberg.
Home Construction Collective aims to address this crisis by focusing on financing the construction of “starter homes” that first-time buyers can afford. These homes are currently in short supply, making them less affordable. To achieve their goal, the project fractionalizes the investment process, allowing people worldwide to invest in the construction of new homes and earn profits when those homes are sold.
Additionally, Lidsky and Wasserman have developed a protocol called Rigor, utilizing blockchain technology to streamline the construction supply chain and payment process. By incorporating Rigor into their operations, Home Construction Collective reduces the cost of manufacturing the homes they finance, leading to more affordable options for potential buyers.
The integration of DeFi and blockchain technology offers a powerful combination to revolutionize the housing market. It broadens investor access to assets that were previously exclusive to regional banks and private lenders. Simultaneously, it enhances transparency, simplifies processes, and reduces costs, ultimately making homeownership more accessible for aspiring buyers.
To delve deeper into Lidsky and Wasserman’s insights on this topic, listen to the full episode of The Agenda on Cointelegraph’s Podcasts page, Apple Podcasts, or Spotify. For a comprehensive range of other shows, explore Cointelegraph’s complete lineup.
Disclaimer: This article provides general information and should not be considered as legal or investment advice. The expressed views and opinions belong solely to the author and may not necessarily reflect those of Cointelegraph.