Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Tag: property rights

  • Happiness vs. satisfaction

    I have heard from some of you that you don’t like it when I write about crypto and NFTs. This personal blog is supposed to be largely about city building after all. So today I thought I would write about crypto and NFTs. More specifically, this podcast episode, which I watched last night.

    It’s with Marc Andreessen and Chris Dixon of the venture firm a16z, and it’s actually less about specific things like NFTs and more about the reinvention of the internet in general. Why I found it particularly interesting is that Marc co-invented the first widely-used web browser. Anyone remember Netscape?

    So he was around for what we are now calling web 1 and he is around for what we are today calling web 3. And there are lots of parallels between then and now. Similar to today with crypto, the early internet had lots of critics and lots of people who thought it was dumb and that it would never amount to much.

    Oops.

    Here are a few other thoughts and ideas from the podcast that I found interesting (some of them even relate to city building):

    • No matter how many times we have seen the same movie, humanity seems doomed to repeat the same mistakes when it comes to, among other things, embracing new ideas and innovations. I agree with Marc in that part of this is generational. Younger people are often more open to new ideas because they view it as a way for them to establish themselves and make their mark on the world. Whereas older people (established people) often view new ideas and change as a threat to their current position in the world.
    • Marc drops a number of books throughout the talk and one of them is The Mystery of Capital — Why Capitalism Succeeds in the West and Fails Everywhere Else. This is a well known book by Hernando De Soto and the big idea is that property ownership and property rights are really the fundamental ingredients in our modern world. People need to know that if they hold title and invest money into something, it’s not just going to get taken away by someone. And it is this underlying legal structure that has allowed people to leverage property into wealth.
    • This is a fascinating observation in its own right, but it also relates to crypto. Hear me out. Chris Dixon makes the argument in the episode that web1 democratized information (anyone can search for stuff), and that web2 democratized publishing (anyone can share stuff through platforms like Twitter or the blogging platform I’m writing on right now). He then goes on to argue that the promise of web3 and crypto is really to democratize ownership of the internet. Anyone can buy crypto tokens.
    • Why might this be a big deal? Well if property rights in our offline world are a fundamental ingredient to modern society, it seems logical to me that property rights in our digital world(s) might also be equally transformative. And this is precisely one of the things that blockchain technologies enable for the very first time.
    • Finally, on a mostly unrelated note, I liked Marc’s comparison of happiness vs. satisfaction in life. Happiness, he explains, is like getting an ice cream cone on a hot summer day. The first and second feel great, but after that you move on. Satisfaction on the other hand is enduring. It’s the feeling you get from working on something really challenging and then finally succeeding. And that’s exactly how I feel about real estate development. There are lots of shitty days and lots of grinding. But in the end, I do feel very satisfied.

  • Protection against risk of expropriation

    Property rights, whether for real world things or for digital things, are the foundation of developed economies. Because if you don’t feel like your property is going to be safe and secure, why would you bother investing and trying to accumulate assets?

    Above is a chart I found, in this great thought piece by Ryan Goldman, showing the direct relationship between “protection against risk of expropriation” and GDP per capita. The more protection, the higher the GDP.

    This is, of course, fundamental to the way we live our lives offline. But it is also becoming increasingly important in the way we live our lives online. Because we now have digital assets that people actually care about owning and protecting. You know, like pictures of apes.

    This market is only going to continue to grow and the above relationship between rights and economic development will certainly hold true. But I think the big question is whether there will be more distributed and equitable access to opportunities in this emerging world.

    I hope that will be the case.

  • Public access at Martin’s Beach

    I just learned about the ongoing legal dispute on Martin’s Beach (south of San Francisco) through this New York Times article. 

    To briefly sum it up, tech billionaire Vinod Khosla bought a 53-acre beachside village known as Martin’s Beach in 2008. On the land is about 47 beach houses, a shop that sold ice cream at one point in its life, and a road that provides the only access to the beach. The road is private, but over the years and before Khosla purchased the property, it provided both parking for and access to the beach. 

    After acquiring the property, the county told Khosla that he had 2 options with respect to the road:

    (1) Keep it open (there’s a gate that controls access). And charge no more than $2 a car for parking, which was the rate charged in 1972.

    (2) Apply for a Coastal Development Permit to change how the access works.

    Khosla opted to do neither and in turn the residents of Martin’s Beach sued him. He’s been in a legal battle ever since. But according to the New York Times, he has about $3 billion sitting in his war chest. For him it is both a matter of principle and a matter of protecting property rights.

    Not surprisingly, tech billionaire fighting to keep people off a public beach makes for a sensational headline in the media. The NY Times argued that every generation has some sort of rich Californian fighting to privatize the waterfront. Khosla is this generation’s “beach villain”.

    But beneath the headlines lies a fascinating legal debate that you can read more about through a blog post that Khosla published earlier this year. For you property lawyers out there, I would be curious to hear your thoughts in the comment section below.