Today it was announced that venture firm a16z has made a $350 million investment in Adam Neumann's new residential rental company called Flow (which is kind of ironic).

The company is set to launch in 2023 and nobody on the outside seems to be entirely clear on how it plans to revolutionize the multi-family rental market, but supposedly this funding round values Flow at more than $1 billion and supposedly Neumann will be rolling in the 4,000 or so apartments that he has been buying up.

In any event, here's how a16z described the opportunity (I think the key sentence is probably the one about creating a system where renters become like owners):

Only through a seismic shift in the way industry relationships are structured and the mechanisms through which value is delivered can we hope to address the underlying problems of the current system and build the solution. Doing this requires combining community-driven, experience-centric service with the latest technology in a way that has never been done before to create a system where renters receive the benefits of owners. This means rethinking the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders. And given the fragmented nature of the ecosystem today, we can only hope to accomplish any of this by bringing every aspect of the living experience together.

What I will say is that I think it's great to see this amount of innovation-focused money flowing into the residential real estate space, which is, after all, the biggest asset class in the world and one that could certainly use some fresh ideas. Apparently it's also the biggest funding round that a16z has ever done.

But I also find a16z's characterization of the problems a bit odd. Renting an apartment is described as this soulless and profoundly lonely experience where you're so ashamed of where you live that you're even hesitant to invite friends over. They also conflate house with home, as if to say that you can't have the latter without the former.

On second thought, maybe these are exactly the right problems to be solving. It is our biases that we need to do something about.

Oof.

Let's assume for a second that you penned an article back in April 2020 called, "It's time to build." And in this article, you argued, among other things, that we're not building nearly enough housing and that home prices are skyrocketing as a result.

Now let's assume that a new multi-family zoning overlay is being proposed for your own neighborhood in an attempt to increase said housing supply and alleviate some of the concerns around home prices. And in response to this proposal, you pen this:

One might call this being hypocritical. But I'm not here to name call. I think the real lesson is what Jerusalem Demsas points out in her recent article, "The Billionaire's Dilemma."

What we have is a macro-micro disconnect that policy makers need to be more aware of. At the macro level we know what we should be doing in order to achieve our stated objectives. But if we allow people at the micro level to veto these efforts, they often will, and sometimes using ALL CAPS.

Today it was announced that venture firm a16z has made a $350 million investment in Adam Neumann's new residential rental company called Flow (which is kind of ironic).

The company is set to launch in 2023 and nobody on the outside seems to be entirely clear on how it plans to revolutionize the multi-family rental market, but supposedly this funding round values Flow at more than $1 billion and supposedly Neumann will be rolling in the 4,000 or so apartments that he has been buying up.

In any event, here's how a16z described the opportunity (I think the key sentence is probably the one about creating a system where renters become like owners):

Only through a seismic shift in the way industry relationships are structured and the mechanisms through which value is delivered can we hope to address the underlying problems of the current system and build the solution. Doing this requires combining community-driven, experience-centric service with the latest technology in a way that has never been done before to create a system where renters receive the benefits of owners. This means rethinking the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders. And given the fragmented nature of the ecosystem today, we can only hope to accomplish any of this by bringing every aspect of the living experience together.

What I will say is that I think it's great to see this amount of innovation-focused money flowing into the residential real estate space, which is, after all, the biggest asset class in the world and one that could certainly use some fresh ideas. Apparently it's also the biggest funding round that a16z has ever done.

But I also find a16z's characterization of the problems a bit odd. Renting an apartment is described as this soulless and profoundly lonely experience where you're so ashamed of where you live that you're even hesitant to invite friends over. They also conflate house with home, as if to say that you can't have the latter without the former.

On second thought, maybe these are exactly the right problems to be solving. It is our biases that we need to do something about.

Oof.

Let's assume for a second that you penned an article back in April 2020 called, "It's time to build." And in this article, you argued, among other things, that we're not building nearly enough housing and that home prices are skyrocketing as a result.

Now let's assume that a new multi-family zoning overlay is being proposed for your own neighborhood in an attempt to increase said housing supply and alleviate some of the concerns around home prices. And in response to this proposal, you pen this:

One might call this being hypocritical. But I'm not here to name call. I think the real lesson is what Jerusalem Demsas points out in her recent article, "The Billionaire's Dilemma."

What we have is a macro-micro disconnect that policy makers need to be more aware of. At the macro level we know what we should be doing in order to achieve our stated objectives. But if we allow people at the micro level to veto these efforts, they often will, and sometimes using ALL CAPS.