Disrupting the House and Home

The local stores and gas stations have closed their restrooms to the public. Makes sense; public bathrooms are disgusting petri dishes.

But what if I’m out and about and I gotta go? I have an aviation friend who removed a seat from his Cessna 310 to retrofit a portapotty and sink for passengers. Maybe I can install the same in the back of my Ford Escape.

What makes a house? Four walls and a roof? Electricity and plumbing? A place to sleep, a place to eat, a place to poop? Then I realized they already make cars you can live in. They’re called RVs, and they’re parked all over the Bay Area because that’s the only way service workers can afford to live. Turns out Silicon Valley has been disrupting housing all along.

But that’s not what housing is about. Housing is, first and foremost, a form of wealth. For most Americans, it’s the majority of net worth, a line of credit, and a retirement plan. A house can’t create wealth by itself; you have to build a pyramid scheme around it. Impose scarcity through zoning regulations, then incentivize jobs to create increasing demand for the few homes that exist. Hence the “Twitter tax break” for tech companies in SF.

If Silicon Valley wants to disrupt the housing market, the solution isn’t to build more homes. It’s to create a new source of liquidity.

Here’s a NYTimes column promoting the idea that women should be paid for the work they do as wives and mothers. That got me thinking. Right now, the only path to compensation is to sue for child support and alimony in the event of a divorce. Until then, spousal transactions are untraced, untaxed, and contribute nothing to the GDP. Why are we leaving so much potential wealth locked up in illiquid marriages?

When lockdown ends, divorce rates will skyrocket. We already saw this happen in China. After sheltering in place for three months, children will sue for emancipation. Those who keep their families intact should be able to borrow against that asset. Loans create wealth!

Maybe this is the economic stimulus we need. You might think that familial relationships are too subjective to securitize, but remember — a house used to be a nonconvertible asset too. The Federal Housing Administration was created in 1934 to encourage people to take out mortgages and boost the Depression-era economy. It was only after homes were appraised and collateralized that they became a path to wealth creation.

RVs may be a terrible place to house a family, but as a bachelor or bachelorette pad, they’re downright adequate. If building homes is good for the economy, wrecking homes must be even better. Okay, I’m a Keynesian now.

5 thoughts on “Disrupting the House and Home

  1. Interesting thoughts. You’re a little behind the times with the whole RV thing. The wave of the future is DIY RVing, I think they call it tiny housing. It’s a big difference, because while RVing is incredibly wasteful tiny houses are magically sustainable…. It occurs to me that I’ve never written about this fact, so I think I’ll go do that now. Thanks.

    1. OMG you are right! it never occurred to me that a “Tiny House community” is really nothing more than a trailer park. That’s how good the marketing is!!

  2. But that’s not what housing is about. Housing is, first and foremost, a form of wealth. For most Americans, it’s the majority of net worth, a line of credit, and a retirement plan.

    Correct. Especially the retirement plan and a carefree retirement is somehow the ultimate objective of all Americans, or at least right behind a parking spot as close as possible to the destination entrance. People will toil their lives away in mundane misery to pay the mortgage, maintenance and improvements on a house maybe three times bigger than they need so they can enjoy their golden years watching Seinfeld re-runs while a lady that speaks English as a second language changes their diapers and spoon-feeds them porridge. Taxes are included in mortgage payments and the interest paid is untaxed so any Yankee that fails to fall for this plan is automatically an idiot. But it does keep the economic gears grinding away.

  3. get back to me when these securitizations are bundled, can be shorted, and can have their volatility hedged. I get out of bed for nothing less.

    I also want to start betting on the relationships in my neighbourhood:

    “did you hear the Johnson’s arguing last night? And the week before too? That’s it – short them! liquidate the Jones’ short for the collateral – she’s pregnant now so they’re fine for a while.”

    “so Mrs Smith doesn’t know this yet but Mr Smith is about to get fired. They are solid though, so don’t short them – just long vol and make sure the underlying isn’t European as we need to close it out.”

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