Blockchain technology and DeFi could help solve the housing crisis.

The prices of houses are sky-high all around the world, and homebuyers are feeling the pain. While affording a home has never been more difficult for many people, the ability to raise funds to construct new homes has never been easier, thanks to decentralized finance (DeFi). The newly launched Home Construction Collective is attempting to leverage blockchain’s coordination and fundraising potential in an effort to fund the construction of, and therefore increase the supply of, affordable homes.

On Episode 14 of The Agenda podcast, hosts Jonathan DeYoung and Ray Salmond speak with Home Construction Collective co-founders Isaac Lidsky and Erich Wasserman about the housing crisis and how blockchain technology may offer a solution.

Unpacking the housing crisis

According to Lidsky and Wasserman, the housing crisis is not truly a crisis of prices — instead, it’s a supply crisis. “We have systematically underproduced homes for decades,” Lidsky said. “Depending on what estimates you look at, we’re short between 4.5 million to 7 million homes today.” Exacerbating this problem is that more and more homes are being built specifically to be rented out rather than sold to prospective homeowners.

The lack of affordable homes has profoundly impacted the net worth of younger generations. “Home ownership is usually the biggest investment that people make in their lifetimes,” said Wasserman. “It’s the gateway to financial access. Homeowners have a staggering 40 times the net worth of renters.”

Related: Tokenized mortgages can prevent another housing bubble crisis, says Casper exec

Lidsky added: “In their 40s, the baby boomers accounted for 21% of all wealth. In their 40s, Gen Xers, it had dropped to 2%. And for us millennials, we’re at 4.8%, with Mark Zuckerberg alone representing 2% of that 4.8%. And those are the horrendous numbers.”

Using DeFi to incentivize starter home construction

Home Construction Collective is focused on financing the construction of “starter homes,” or homes that first-time buyers can afford, which Lidsky reported are in incredibly short supply. “The more of them we can put on the market, the more affordable they’ll become,” he posited.

To help achieve this goal, the project fractionalizes the investment process, allowing people from around the world to invest in the construction of a new home and profit once it sells. Wasserman broke down the project’s mission in this regard:

“The problem we’re trying to solve and the thing we’re trying to do is to broaden investor access to these assets, which have been the, really, exclusive domain of regional banks and private lenders. And we’d submit they’ve not done a terribly good job over the last decades in keeping up with demand.”

Lidsky and Wasserman also co-founded a protocol called Rigor, which uses blockchain to streamline the construction supply chain and payment process. Lidsky said that by using Rigor, the cost of manufacturing the homes financed by Home Construction Collective is reduced:

“In the background, we’re also, at the pace of innovation in Web3, moving smartly to sort of further develop our tools ultimately to bring down the cost to produce these homes, bring down the cost in cycle times and in dollars. And so it’s a powerful one-two punch.”

To hear more from Lidsky and Wasserman’s conversation with The Agenda, listen to the full episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t forget to check out Cointelegraph’s full lineup of other shows!

Magazine: ZK-rollups are ‘the endgame’ for scaling blockchains, Polygon Miden founder

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!


Was this article helpful?

93 out of 132 found this helpful

Discover more


Fortune Magazine interview with Nubank founder How Brazilian fintech leads the United States by 5 years

How a Brazilian digital bank valued at $25 billion views the potential of financial technology and cryptocurrency rev...


The Future Looks Bright for Spot Ether ETFs: A 70% Chance of Approval by May

According to Eric Balchunas, an ETF analyst at Bloomberg, there is a 70% likelihood of Ethereum ETFs being approved b...


Price analysis for 7/31: SPX, DXY, BTC, ETH, XRP, BNB, ADA, DOGE, SOL, LTC

Bitcoin price remains resilient as traders anticipate a potential trend reversal fueled by increased volatility.


Do NFT transactions need to be taxed in Canada?

This article will first deeply discuss the basic principles of NFT taxation in Canada's cryptocurrency tax system.


Report suggests it's time to switch from Ethereum to Bitcoin.

The growing interest in Bitcoin has led analysts to recommend a greater focus on BTC and a moderate decrease in expos...


'Enterprise blockchain: 'Ethereum for Business' explains use cases'

With the increasing adoption of blockchain technology by businesses, Paul Brody's latest book titled Ethereum for Bus...