I have been writing about the real estate startup Opendoor for many years here on the blog. Another promising startup in this space is Knock, and today it was announced that they just raised a $400 million Series B round (led by Foundry Group).

They share some similarities with Opendoor, but they are also different in that their focus is on home trade-ins. They tell you what your current home is worth, help you find a new home, and then coordinate “a seamless swap.” For more on how they work, go here.

One of the ways in which they are similar to Opendoor is that they front the cash for new home purchases. In the case of Opendoor, they buy your home with the plan of selling it in the future. And with Knock, they buy your home with the understanding that your old home will get sold.

It is certainly a more capital intensive model compared to the way that home sales are handled today. But many investors are clearly betting that it is exactly what is needed to change the status quo. 

(Credit to Jeremiah Shamess for sharing the above news with me today.)

This past weekend I saw a few people reacting on Twitter to this article by Wendell Cox talking about how Canadian families are being denied their preferred housing choice: the detached single family home.

The fact that the article is by Wendell Cox should tell you everything you need to know. But essentially the argument is that misguided planning policies are driving up the cost of housing and that we should, instead, be encouraging unfettered sprawl.

There’s lots to discuss here, but the first thought that actually came to mind was: “How would this article sound if we replaced all of the references to housing with references to cars?” In case you too are wondering that, this is how the first paragraph would read:

A new poll by Sotheby’s International Realty suggests substantial disappointment among Canada’s young urban families, unable to afford to purchase the types of [cars] that they prefer. The poll determined that young urban households in Canada strongly prefer [Aston Martins], but they are often “motivated by (financial) necessity to purchases [sic] [cars], especially [BMWs], they do not prefer.“

The article is clearly one-sided. I don’t disagree that there are people who – all things being equal – would prefer to raise a family in a ground-related single family home. Backyards serve a purpose, as do large basements equipped with beer fridges.

But all things are not equal. And there also people who value walkability, a reasonable commute, and the kind of urban amenities that come along with being in a dense city. I am one of those people.

Photo by Adrien Olichon on Unsplash

The New York Times has a recent article up talking about the disappearing “urban advantage” for low-skilled workers. It is based on the work of MIT economist David Autor.

Here is a chart from the article plotting wages against population density from 1950 to 2015:

The clear takeaway is that dense urban centers remain a place where wealth is created – but you probably need a college degree.

The economic advantages of dense cities for those without one appears to be disappearing. The labor market has diverged.

Interestingly enough, David’s research also suggests that college graduates may be starting to abstain from the suburbs – even when they have kids.

And that’s because the returns to being in the city are so great.

For the full NY Times article, click here.