WEBVTT 00:00:00.000 --> 00:00:03.980 Welcome to The Debate. Today we are looking at, 00:00:04.099 --> 00:00:07.660 well, the single largest asset class in the world. 00:00:07.780 --> 00:00:10.900 It is the thing that historically defined voting 00:00:10.900 --> 00:00:15.740 rights, status, and wealth. And today it is likely 00:00:15.740 --> 00:00:17.859 the biggest line item in your personal budget. 00:00:18.000 --> 00:00:21.359 We are talking about real estate. And to be clear, 00:00:21.399 --> 00:00:23.260 right out the gate, we aren't just talking about 00:00:23.260 --> 00:00:26.079 Zillow listings or, you know, open houses with 00:00:26.079 --> 00:00:28.960 fresh cookies. We are analyzing the strict definition. 00:00:29.399 --> 00:00:31.800 The land itself, the buildings on top of it, 00:00:31.839 --> 00:00:34.520 and the natural resources, the water, the minerals, 00:00:34.640 --> 00:00:37.880 the crops that come with it. Exactly. It's the 00:00:37.880 --> 00:00:41.359 physical stage upon which new life, well, happens. 00:00:41.840 --> 00:00:44.460 And the central question we are wrestling with 00:00:44.460 --> 00:00:48.109 today is this. Is real estate primarily a fundamental 00:00:48.109 --> 00:00:52.409 expression of natural rights, a vehicle for individual 00:00:52.409 --> 00:00:55.909 liberty and economic stability? Or is it a mechanism 00:00:55.909 --> 00:00:59.149 that locks in social stratification and, frankly, 00:00:59.310 --> 00:01:02.070 accelerates environmental degradation? I'm taking 00:01:02.070 --> 00:01:04.530 the latter view. I think if you look closely 00:01:04.530 --> 00:01:06.930 at the history and the data, you find that the 00:01:06.930 --> 00:01:10.310 estate part of real estate That legal fiction 00:01:10.310 --> 00:01:13.670 we wrap around the land has historically prioritized 00:01:13.670 --> 00:01:18.150 profit over people and extraction over sustainability. 00:01:18.549 --> 00:01:22.849 And I'm here to defend the institution. I believe 00:01:22.849 --> 00:01:25.650 that private property rights, specifically real 00:01:25.650 --> 00:01:28.370 estate, are the bedrock of free society and the 00:01:28.370 --> 00:01:31.150 primary engine for capital formation. I mean, 00:01:31.170 --> 00:01:33.349 without clear ownership, you don't have an economy. 00:01:33.370 --> 00:01:37.469 You have chaos. So let's get into the dirt. Let's 00:01:37.469 --> 00:01:40.379 do it. I want to start with the philosophy because 00:01:40.379 --> 00:01:43.000 it explains why we treat land the way we do. 00:01:43.239 --> 00:01:45.700 The idea that you can point to a patch of earth 00:01:45.700 --> 00:01:48.840 and say, this is mine and the state will project 00:01:48.840 --> 00:01:52.719 my right to it is a profound concept. It's not 00:01:52.719 --> 00:01:55.459 just modern capitalism. You can trace this back 00:01:55.459 --> 00:01:58.700 to Roman law, to Greek philosophy, and specifically 00:01:58.700 --> 00:02:01.319 to writers in the 15th and 16th centuries who 00:02:01.319 --> 00:02:03.599 discussed universal law. You're referring to 00:02:03.599 --> 00:02:06.780 the natural law arguments? Yes. Take Emmerich 00:02:06.780 --> 00:02:10.189 de Wattel. In 1758, he wrote the Law of Nations. 00:02:10.550 --> 00:02:13.050 He was instrumental in conceptualizing private 00:02:13.050 --> 00:02:15.789 property not just as a convenience, but as a 00:02:15.789 --> 00:02:18.370 prerequisite for order. The argument is that 00:02:18.370 --> 00:02:20.750 without the security of ownership, the private 00:02:20.750 --> 00:02:23.789 domain, citizens cannot truly be free or safe. 00:02:24.069 --> 00:02:26.430 I mean, if the king or the mob can take your 00:02:26.430 --> 00:02:29.270 home, you have no liberty. It sounds noble when 00:02:29.270 --> 00:02:32.129 you quote Vattel. It gives it this very clean, 00:02:32.270 --> 00:02:35.050 intellectual lineage. But I think we need to 00:02:35.050 --> 00:02:37.550 peel back that philosophical layer and look at 00:02:37.550 --> 00:02:39.849 what that order actually looks like in practice. 00:02:40.189 --> 00:02:43.069 You're talking about real property versus personal 00:02:43.069 --> 00:02:46.210 property. Right. Personal property is movable. 00:02:46.250 --> 00:02:49.030 Your car, your furniture, your crypto wallet. 00:02:49.250 --> 00:02:52.669 Real property is immovable. It's the land. But 00:02:52.669 --> 00:02:54.729 the way we handle that immovability is through 00:02:54.729 --> 00:02:57.650 a legal construct called the estate. That is 00:02:57.650 --> 00:03:00.090 the interest you hold in the land. And my issue 00:03:00.090 --> 00:03:03.250 is that this legal construct has often been weaponized. 00:03:03.560 --> 00:03:06.879 You speak of order, but whose order? The order 00:03:06.879 --> 00:03:10.460 of the majority. Look at the United States. According 00:03:10.460 --> 00:03:13.360 to the Congressional Research Service, as of 00:03:13.360 --> 00:03:18.360 2021, 65 % of U .S. homes are owned by the occupier. 00:03:18.479 --> 00:03:22.219 That is a stunning statistic. In a feudal system, 00:03:22.479 --> 00:03:25.719 the Lord owns everything, and you work the fields. 00:03:25.979 --> 00:03:29.199 In our system, two -thirds of families own their 00:03:29.199 --> 00:03:32.080 slice of the earth. That is a massive democratization 00:03:32.080 --> 00:03:34.680 of wealth. It is a large number, I grant you, 00:03:34.780 --> 00:03:37.039 but let's look at the quality of that ownership. 00:03:37.460 --> 00:03:41.020 We use terms like fee simple and leasehold. These 00:03:41.020 --> 00:03:43.379 aren't just vocabulary words. They define your 00:03:43.379 --> 00:03:45.840 power. I think it's important we define those 00:03:45.840 --> 00:03:47.800 for the listeners because it goes to the heart 00:03:47.800 --> 00:03:51.259 of my argument about liberty. Fee simple is the 00:03:51.259 --> 00:03:53.719 gold standard of ownership. It means you own 00:03:53.719 --> 00:03:55.879 the land, the air above it, the ground below 00:03:55.879 --> 00:03:58.419 it, and, crucially, you can leave it to your 00:03:58.419 --> 00:04:01.740 heirs. It is absolute ownership. When you buy 00:04:01.740 --> 00:04:04.340 a house in the suburbs, you usually get fee -simple 00:04:04.340 --> 00:04:07.439 title. Right. But then you have leasehold, or 00:04:07.439 --> 00:04:10.719 other fractured forms of tenure. In a leasehold, 00:04:10.879 --> 00:04:13.280 you might own the building, but someone else 00:04:13.280 --> 00:04:16.060 owns the dirt, and your ownership expires after, 00:04:16.139 --> 00:04:20.040 say, 99 years. Or look at a condo. You own the 00:04:20.040 --> 00:04:22.939 airspace inside your unit, literally the paint 00:04:22.939 --> 00:04:25.279 to the paint, but you share ownership of the 00:04:25.279 --> 00:04:28.970 structure. The complexity of these estates often 00:04:28.970 --> 00:04:31.810 serves to concentrate control. And historically, 00:04:32.129 --> 00:04:34.290 that control was acquired through means that 00:04:34.290 --> 00:04:36.910 were anything but natural law. Are you referring 00:04:36.910 --> 00:04:39.589 to the origins of the American market? I am. 00:04:39.910 --> 00:04:43.149 You cannot talk about American real estate without 00:04:43.149 --> 00:04:46.029 talking about the Louisiana Purchase of 1803. 00:04:46.350 --> 00:04:49.230 In business schools, it's taught as the greatest 00:04:49.230 --> 00:04:51.589 real estate deal in history. Because it was. 00:04:52.129 --> 00:04:55.410 Thomas Jefferson paid $15 million. Which breaks 00:04:55.410 --> 00:04:59.420 down to about four cents an acre. Exactly. Four 00:04:59.420 --> 00:05:02.180 cents an acre to double the size of the country. 00:05:02.339 --> 00:05:05.519 It paved the way for Western expansion. It created 00:05:05.519 --> 00:05:08.480 the inventory that allowed millions of poor immigrants 00:05:08.480 --> 00:05:11.259 to come over and become landowners, something 00:05:11.259 --> 00:05:13.600 they never could have done in Europe. Paved the 00:05:13.600 --> 00:05:17.079 way is doing a lot of heavy lifting there. Legally, 00:05:17.100 --> 00:05:20.000 scholars categorize that under acquisition by 00:05:20.000 --> 00:05:23.920 conquest or discovery. We bought the rights from 00:05:23.920 --> 00:05:27.139 France, but the land was fully occupied by indigenous 00:05:27.139 --> 00:05:30.399 peoples. France didn't really own it in any practical 00:05:30.399 --> 00:05:32.560 sense. They just had a map that said they did. 00:05:32.660 --> 00:05:35.160 That natural right to property you mentioned, 00:05:35.339 --> 00:05:38.040 Vattel praising, it apparently didn't apply to 00:05:38.040 --> 00:05:40.420 the people actually living on the land. It was 00:05:40.420 --> 00:05:43.120 a transfer of raw power, not a sterile business 00:05:43.120 --> 00:05:45.980 transaction. I acknowledge the violence of the 00:05:45.980 --> 00:05:49.040 acquisition. That is undeniable. And it's a dark 00:05:49.040 --> 00:05:52.079 stain. But we have to look at what happened after 00:05:52.079 --> 00:05:54.980 the acquisition. Once that land was brought into 00:05:54.980 --> 00:05:57.480 the legal fold, the system that was built, the 00:05:57.480 --> 00:06:00.300 surveying, the recording of deeds, allowed for 00:06:00.300 --> 00:06:03.459 a stability that didn't exist before. You mentioned 00:06:03.459 --> 00:06:05.420 business schools. Let's talk about the industry 00:06:05.420 --> 00:06:08.639 itself. It moved from the Wild West to a profession. 00:06:08.980 --> 00:06:11.660 A profession of gatekeepers. A profession of 00:06:11.660 --> 00:06:14.100 standards. The oldest real estate brokerage in 00:06:14.100 --> 00:06:17.810 the U .S., Baird & Warner, started in 1855. The 00:06:17.810 --> 00:06:19.790 National Association of Realtors was founded 00:06:19.790 --> 00:06:23.750 in 1908. Before that, it was chaos. You could 00:06:23.750 --> 00:06:25.970 buy a farm and find out three other people thought 00:06:25.970 --> 00:06:28.490 they owned it. These organizations established 00:06:28.490 --> 00:06:30.970 a chain of title. When you buy a house today, 00:06:31.050 --> 00:06:33.149 you know you own it because of that infrastructure. 00:06:33.490 --> 00:06:35.810 That professionalization protects the little 00:06:35.810 --> 00:06:39.209 guy just as much as the big guy. Does it? Let's 00:06:39.209 --> 00:06:41.230 talk about who that professional infrastructure 00:06:41.230 --> 00:06:44.069 was designed to protect. The National Association 00:06:44.069 --> 00:06:46.819 of Realtors. which you cite as a beacon of order, 00:06:47.019 --> 00:06:50.139 presided over decades of segregation. We had 00:06:50.139 --> 00:06:53.420 the National Housing Act of 1934 and the Banking 00:06:53.420 --> 00:06:56.519 Act of 1933. Which saved the banking system during 00:06:56.519 --> 00:06:58.699 the Great Depression. They stabilized the banks. 00:06:58.800 --> 00:07:00.959 Yes, they created the 30 -year mortgage, which 00:07:00.959 --> 00:07:04.459 is great. But they also institutionalized redlining. 00:07:04.620 --> 00:07:07.500 The government maps explicitly graded neighborhoods. 00:07:07.779 --> 00:07:11.199 Green was good. Red was hazardous. And red almost 00:07:11.199 --> 00:07:13.870 always meant... black populations. We were looking 00:07:13.870 --> 00:07:16.529 at this through a modern lens, though. We have 00:07:16.529 --> 00:07:20.089 to. The Fair Housing Act didn't pass until 1968. 00:07:20.589 --> 00:07:23.230 That means for the first 60 years of this professional 00:07:23.230 --> 00:07:27.069 industry, it was legal and often policy to discriminate 00:07:27.069 --> 00:07:30.449 in renting, buying and financing based on race. 00:07:30.610 --> 00:07:33.980 The stability you love. was purchased by excluding 00:07:33.980 --> 00:07:37.420 entire demographics from building equity. You 00:07:37.420 --> 00:07:39.600 can't separate the asset class from that history 00:07:39.600 --> 00:07:42.420 because wealth compounds. If you were locked 00:07:42.420 --> 00:07:45.480 out in 1940, your grandkids are feeling it in 00:07:45.480 --> 00:07:49.800 2026. I agree that the history is flawed, but 00:07:49.800 --> 00:07:52.199 the mechanism of real estate, the ability to 00:07:52.199 --> 00:07:55.819 hold and transfer value is neutral. The policy 00:07:55.819 --> 00:07:59.240 was bad. The asset is good. And that brings me 00:07:59.240 --> 00:08:01.899 to the economic engine. You can't deny that real 00:08:01.899 --> 00:08:04.199 estate is the primary vehicle for wealth creation 00:08:04.199 --> 00:08:06.939 for the middle class. It is the only leveraged 00:08:06.939 --> 00:08:09.379 investment most people will ever make. I can 00:08:09.379 --> 00:08:12.199 deny that it should be. And I can certainly question 00:08:12.199 --> 00:08:14.980 the mechanics of it. Let's pivot to the money. 00:08:15.480 --> 00:08:18.860 You view real estate as an investment. I view 00:08:18.860 --> 00:08:21.720 it as shelter. When you mix those two, you get 00:08:21.720 --> 00:08:25.589 distortion. They aren't mutually exclusive. If 00:08:25.589 --> 00:08:28.209 I buy a home, I get shelter and I get a store 00:08:28.209 --> 00:08:31.389 of value. It's a forced savings account. Every 00:08:31.389 --> 00:08:33.789 month I pay down my mortgage, I am essentially 00:08:33.789 --> 00:08:36.590 paying myself. But look at the speculative side. 00:08:36.809 --> 00:08:40.070 We treat houses like stocks. We have investors 00:08:40.070 --> 00:08:43.389 buying properties in markets just because prices 00:08:43.389 --> 00:08:45.970 are rising, with no intention of living there. 00:08:46.190 --> 00:08:49.409 That signals value, though. It drives capital 00:08:49.409 --> 00:08:52.990 to where it's in demand. Take flipping. It gets 00:08:52.990 --> 00:08:55.789 a terrible reputation. But strip away the reality 00:08:55.789 --> 00:08:59.830 TV drama and what is it? It's arbitrage. Arbitrage? 00:09:00.110 --> 00:09:03.889 Yes. Arbitrage. Taking advantage of a price difference 00:09:03.889 --> 00:09:06.970 between two markets. An investor finds a property 00:09:06.970 --> 00:09:09.149 that is undervalued because it has a hole in 00:09:09.149 --> 00:09:12.509 the roof or, you know, 1970s plumbing. The market 00:09:12.509 --> 00:09:15.269 has discounted it heavily. They pour capital 00:09:15.269 --> 00:09:18.149 and labor into it, fixing the roof, updating 00:09:18.149 --> 00:09:21.070 the pipes, and they sell it for a profit. They 00:09:21.070 --> 00:09:23.129 have improved the housing stock. That is value 00:09:23.129 --> 00:09:26.210 creation, not extraction. If they didn't do it, 00:09:26.230 --> 00:09:29.029 that house would rot. In an ideal world, maybe. 00:09:29.210 --> 00:09:32.110 But often that flipping is purely cosmetic. Gray 00:09:32.110 --> 00:09:34.289 laminate floors and white paint over structural 00:09:34.289 --> 00:09:37.250 issues. Or it's just writing a bubble. And speaking 00:09:37.250 --> 00:09:39.389 of bubbles, if real estate is such a stable store 00:09:39.389 --> 00:09:42.669 of value, explain the crashes. Markets fluctuate. 00:09:42.909 --> 00:09:45.929 That's the nature of economics. Fluctuate is 00:09:45.929 --> 00:09:48.789 a very gentle word for what happened in 1929. 00:09:49.289 --> 00:09:51.509 The stock market crashed, and in the four years 00:09:51.509 --> 00:09:54.169 that followed, real estate values depreciated 00:09:54.169 --> 00:09:57.570 by 50%. Half the value of the nation's housing 00:09:57.570 --> 00:10:01.090 stock evaporated. That destroys lives. If your 00:10:01.090 --> 00:10:03.769 safety net can lose half its value in four years, 00:10:03.870 --> 00:10:06.750 it's not a safety net. It's a gamble. And we 00:10:06.750 --> 00:10:09.850 saw it again in 2008. But look at the response 00:10:09.850 --> 00:10:12.870 to that 1929 crash. That's my point about the 00:10:12.870 --> 00:10:15.090 resilience of the system. We didn't just let 00:10:15.090 --> 00:10:19.049 it rot. We created Fannie Mae in 1938. a government 00:10:19.049 --> 00:10:22.809 bailout mechanism. A structural innovation. Before 00:10:22.809 --> 00:10:25.429 Fannie Mae, a bank had to hold your mortgage 00:10:25.429 --> 00:10:28.029 for the full term. If they ran out of cash, they 00:10:28.029 --> 00:10:30.210 couldn't lend to anyone else. Fannie Mae was 00:10:30.210 --> 00:10:32.570 created to buy those mortgages from the banks, 00:10:32.669 --> 00:10:35.350 giving the banks fresh cash to lend to new homeowners. 00:10:35.690 --> 00:10:38.350 It created liquidity. It proves that the real 00:10:38.350 --> 00:10:40.750 estate market can evolve to support the population. 00:10:41.049 --> 00:10:44.070 It proves the market is so volatile, it requires 00:10:44.070 --> 00:10:47.360 massive federal backstops to function. And on 00:10:47.360 --> 00:10:50.279 the high end, it's even worse. The source material 00:10:50.279 --> 00:10:53.019 notes that luxury real estate in London and New 00:10:53.019 --> 00:10:55.879 York is essentially a safety deposit box for 00:10:55.879 --> 00:10:58.840 global corruption. Foreign officials use shell 00:10:58.840 --> 00:11:01.679 companies to buy penthouses, not to live in, 00:11:01.779 --> 00:11:04.200 but to launder money and protect it from seizure 00:11:04.200 --> 00:11:07.820 at home. Those are criminal edge cases. You don't 00:11:07.820 --> 00:11:10.860 judge the entire auto industry by bank robbers 00:11:10.860 --> 00:11:14.379 who use getaway cars. You do if the car is designed 00:11:14.379 --> 00:11:17.360 specifically to hide the robber. The opacity 00:11:17.360 --> 00:11:19.820 of real estate ownership, the ability to hide 00:11:19.820 --> 00:11:23.320 behind LLCs, is a feature, not a bug. We can 00:11:23.320 --> 00:11:25.759 argue about regulation, but I want to pivot to 00:11:25.759 --> 00:11:28.000 the physical reality of the asset. We've talked 00:11:28.000 --> 00:11:31.059 about laws and money, but real estate is dirt 00:11:31.059 --> 00:11:33.779 and timber. You mentioned earlier that the industry 00:11:33.779 --> 00:11:37.480 prioritizes profit over the planet. In 2019, 00:11:37.779 --> 00:11:41.279 the real estate sector was responsible for 39 00:11:41.279 --> 00:11:48.080 % of total global emissions. 39 %? Nearly 40%. 00:11:48.080 --> 00:11:52.519 And here is the kicker. 11 % of that wasn't from 00:11:52.519 --> 00:11:55.299 heating or cooling. It was solely from manufacturing 00:11:55.299 --> 00:11:58.679 the materials. The concrete, the steel, the glass. 00:11:58.919 --> 00:12:02.120 We are literally burning the atmosphere to build 00:12:02.120 --> 00:12:05.259 these assets. I'm glad you brought that up. Because 00:12:05.259 --> 00:12:07.620 this is where the industry is actually making 00:12:07.620 --> 00:12:10.700 its biggest strides. You are looking at legacy 00:12:10.700 --> 00:12:13.809 data. The modern real estate market is obsessed 00:12:13.809 --> 00:12:17.370 with efficiency. Since the 1970s, Poe inciting 00:12:17.370 --> 00:12:19.230 with the World Commission on Environment and 00:12:19.230 --> 00:12:21.889 Development, we've seen the rise of green development. 00:12:22.190 --> 00:12:24.909 Is it substantive change or is it just marketing 00:12:24.909 --> 00:12:27.149 brochures with pictures of leaves on them? It 00:12:27.149 --> 00:12:30.250 is substantive. Look at LEED certification. Look 00:12:30.250 --> 00:12:33.669 at the demand for green infrastructure. But more 00:12:33.669 --> 00:12:36.210 importantly, look at how the market prices risk. 00:12:36.779 --> 00:12:39.440 Today, you almost cannot close a commercial deal 00:12:39.440 --> 00:12:41.860 without an Environmental Site Assessment, or 00:12:41.860 --> 00:12:44.879 ESA. Explain what that is for the listener who 00:12:44.879 --> 00:12:48.019 hasn't bought a warehouse lately. An ESA is a 00:12:48.019 --> 00:12:50.679 due diligence report. A surveyor goes out to 00:12:50.679 --> 00:12:53.960 check for contamination, oil in the soil, asbestos, 00:12:53.980 --> 00:12:56.879 groundwater issues. If the land is sick, the 00:12:56.879 --> 00:12:59.580 deal dies or the price collapses. The market 00:12:59.580 --> 00:13:01.980 is explicitly putting a price tag on environmental 00:13:01.980 --> 00:13:04.879 health that forces owners to be better stewards. 00:13:05.419 --> 00:13:07.379 If you pollute your land, you lose your equity. 00:13:07.659 --> 00:13:10.539 That is a very optimistic take. I see it differently. 00:13:10.779 --> 00:13:13.860 I think the profession of environmental surveying 00:13:13.860 --> 00:13:16.879 is what we might call a self -licking ice cream 00:13:16.879 --> 00:13:20.220 cone. How so? The industry degrades the land 00:13:20.220 --> 00:13:23.440 for a century. Then it creates a cottage industry 00:13:23.440 --> 00:13:26.799 of surveyors to tell us how degraded it is. Then 00:13:26.799 --> 00:13:29.240 we pay developers to remediate it and call it 00:13:29.240 --> 00:13:32.440 green. It's a profit cycle based on fixing our 00:13:32.440 --> 00:13:35.480 own mess. And even with green buildings, look 00:13:35.480 --> 00:13:39.000 at the macro layout. Sprawl. You mean the suburbs? 00:13:39.320 --> 00:13:42.399 I mean the list of detached dwellings, mansions, 00:13:42.519 --> 00:13:46.080 villas, split -level homes. This model requires 00:13:46.080 --> 00:13:48.919 massive amounts of land per person. It requires 00:13:48.919 --> 00:13:52.080 miles of asphalt roads, more pipes, more wires. 00:13:52.259 --> 00:13:54.980 You can put a solar panel on a villa, but if 00:13:54.980 --> 00:13:57.279 that villa replaced a forest and requires a 40 00:13:57.279 --> 00:14:00.159 -minute commute in a car, it is not green. But 00:14:00.159 --> 00:14:02.720 that is what people want. You are criticizing 00:14:02.720 --> 00:14:06.200 the market for responding to human desire. People 00:14:06.200 --> 00:14:09.600 want space. They want privacy. They want a detached 00:14:09.600 --> 00:14:13.019 home. Real estate developers are just organizing 00:14:13.019 --> 00:14:16.940 space to meet human needs. Organizing space is 00:14:16.940 --> 00:14:19.740 a very sterile way to put it. We are turning 00:14:19.740 --> 00:14:22.919 wild animals and growing crops, which are part 00:14:22.919 --> 00:14:25.799 of the definition of real estate, into paved 00:14:25.799 --> 00:14:29.220 subdivisions. We are extracting utility from 00:14:29.220 --> 00:14:32.139 the earth at a rate that is unsustainable. But 00:14:32.139 --> 00:14:34.940 what is the alternative? Cramming everyone into 00:14:34.940 --> 00:14:38.080 high -rises? The beauty of our system is the 00:14:38.080 --> 00:14:41.039 variety of tenure. We have condominiums where 00:14:41.039 --> 00:14:43.580 you share the land. We have housing cooperatives 00:14:43.580 --> 00:14:46.500 where you own shares in a corporation. We have 00:14:46.500 --> 00:14:50.169 townhouses. This diversity allows people at different 00:14:50.169 --> 00:14:53.049 economic levels to enter the market. It allows 00:14:53.049 --> 00:14:55.789 entry, sure, but it also creates a hierarchy. 00:14:56.269 --> 00:14:59.490 The fee -simple, single -family home is the dream, 00:14:59.629 --> 00:15:02.669 and everything else is a compromise. And frankly, 00:15:02.870 --> 00:15:05.769 the complexity of things like co -ops often serves 00:15:05.769 --> 00:15:08.309 as another layer of exclusion. Have you ever 00:15:08.309 --> 00:15:10.470 tried to get approved by a co -op board in New 00:15:10.470 --> 00:15:13.289 York? It's not just about money. It's about social 00:15:13.289 --> 00:15:16.750 acceptability. It's about protecting the community's 00:15:16.750 --> 00:15:19.730 interest. That is the essence of real estate, 00:15:19.889 --> 00:15:22.769 balancing the individual right with the collective 00:15:22.769 --> 00:15:26.350 value. And I argue the balance is off. I think 00:15:26.350 --> 00:15:29.210 we need to zoom out to conclude. Despite the 00:15:29.210 --> 00:15:32.090 flaws, despite the redlining of the past and 00:15:32.090 --> 00:15:34.649 the emissions of the present, I keep coming back 00:15:34.649 --> 00:15:37.669 to the fundamental utility. For the average family, 00:15:37.909 --> 00:15:40.450 the home is the only leverage investment they 00:15:40.450 --> 00:15:43.429 will ever make. It is the only way they can turn 00:15:43.429 --> 00:15:47.169 a monthly expense, shelter, into an asset, equity. 00:15:47.769 --> 00:15:50.490 It is a powerful tool, I don't deny that. But 00:15:50.490 --> 00:15:53.110 it is a dangerous one. We are tying the financial 00:15:53.110 --> 00:15:55.509 future of the middle class to an asset that is 00:15:55.509 --> 00:15:57.909 physically vulnerable to climate change, which 00:15:57.909 --> 00:16:00.769 the asset class itself is driving. It's a vicious 00:16:00.769 --> 00:16:03.789 cycle. And by treating homes as financial vehicles 00:16:03.789 --> 00:16:06.809 first and shelters second, we create a society 00:16:06.809 --> 00:16:09.169 where housing is increasingly unaffordable for 00:16:09.169 --> 00:16:11.210 the people who actually need to live in it. My 00:16:11.210 --> 00:16:14.250 view is that the legal structure, the distinction 00:16:14.250 --> 00:16:17.129 between real and property, The professionalization 00:16:17.129 --> 00:16:19.990 of the industry provides the stability we need 00:16:19.990 --> 00:16:22.409 to solve those problems. We are seeing the shift 00:16:22.409 --> 00:16:24.370 to green building. We are seeing financing open 00:16:24.370 --> 00:16:27.389 up. The natural right to property is a vehicle 00:16:27.389 --> 00:16:29.909 for liberty, and we are getting better at ensuring 00:16:29.909 --> 00:16:32.870 everyone has a set of keys. And my view is that 00:16:32.870 --> 00:16:35.590 we need to stop looking at the espate, the profit, 00:16:35.769 --> 00:16:38.250 the rights, the flipping, and start looking at 00:16:38.250 --> 00:16:41.690 the real, the land, the water, the community. 00:16:42.240 --> 00:16:44.720 If we don't prioritize the physical reality of 00:16:44.720 --> 00:16:46.879 the earth over the legal fiction of the deed, 00:16:47.000 --> 00:16:49.480 we're going to find that our store of value is 00:16:49.480 --> 00:16:52.539 underwater, figuratively and literally. It is 00:16:52.539 --> 00:16:54.919 certainly the intersection where the physical 00:16:54.919 --> 00:16:57.360 world meets the legal world. And where the checkbook 00:16:57.360 --> 00:17:00.039 meets the chainsaw. We hope this discussion has 00:17:00.039 --> 00:17:02.480 encouraged you to look at your own housing situation, 00:17:02.840 --> 00:17:06.700 whether you rent, own, or are looking to buy, 00:17:06.880 --> 00:17:09.700 and consider how it fits into these global systems. 00:17:10.250 --> 00:17:12.430 Dig into the history of your own deed. You might 00:17:12.430 --> 00:17:14.970 be surprised what you find. Thank you for joining 00:17:14.970 --> 00:17:16.430 us on The Debate. Goodbye.