WOW. Tremendous piece, Joel. And well written. This is the sort of thinking we need to start addressing the true root of the perverse incentives problem we have in cities.
Another issue with co-ops that we were told during a mini conference I attended on the subject was that there’s often a lack of expertise among the residents to properly manage the finances and upkeep of common elements. We have co-ops here that are forced to sell parts of their property to fund capital repair projects. It’s a shame because with better management they could have potentially avoided that. But they seem to die and get liquidated by a thousand cuts, and so this leaves me to think that there needs to be extra supports available to help co-ops with property management. Maybe a special tent organization that provides help, advice, resources and even financing that is suitable for the asset.
A third thing to consider: it is hard to find a group of people who are organized enough to get a project like this off the ground. Do we create processes that allow developers to kickstart them? Do we create a place for ppl to meet and find potential partners? I know DAOs have elements that potentially addresses part of the coordination issues but the messy human bits and dysfunctional real estate context still require addressing.
Thank you so much for the comment and kind words! Those are some great things to think about.
I certainly agree that management in a lot of co-ops could be an issue since most members wouldn’t have any professional training in that area. That’s something where I think working at the scale of a neighborhood or small city would be advantageous over just a building. At that scale, it makes sense to hire a professional management team just like one would in a company. They would be appointed by a board, who would in turn be representing the shareholders of the business (and of course you would want the board and management team all to be significant shareholders in the whole thing)
Running the entire community that way instead of individual buildings would bring a different set of challenges, but I think we’re at the point with crypto that it can be done. It wouldn’t have been possible 5-10 years ago because of the really high transaction costs of coordinating that many people, but I think we are getting there.
Also, I think some kind of digital interface could make interactions with the organization on a daily basis much easier for individuals. I’ve always been interested in local news and local politics (Since that’s the scale where people can have an impact) and am interested in why people get so disillusioned by it. Well, it’s kind of obvious: the current system was developed hundreds of years ago when information took weeks to move and people’s lives looked very different than they do now.
I’ve been reading A Pattern Language again and a theme that really jumps out to me is Alexander’s focus on governance at the right scale - advocating for pushing decision making to the lowest level possible - even down to clusters of individual houses for certain things. Not only does that result in more diversity because each area can govern and invest money in its own way, but it humanizes the process and invites people to engage with it.
And to your last point - yeah, the bootstrapping problem as Joni Baboci calls it (I’m actually chatting with him next week about this) is the most difficult to overcome.
My thought would be that something like this would be best attempted not in the middle of nowhere like many new cities are. Instead, it should be done directly adjacent to an already established place that has infrastructure and demand for housing. So it can access and use that demand and infrastructure but not be under the political jurisdiction of that city.
So you could probably get a majority of residents who are wanting to move to the adjacent city but move to this location instead, because I think though it would be new it offers a compelling value proposition in that it’s likely more affordable than whatever other housing is in the city, and presents an opportunity to be part of something interesting.
Then whichever residents you can attract from other locations because they think it’s a cool project are just a bonus! I think remote workers who tend to move around every few months would be interested too
Anyway, this was a little long-winded, but I appreciate your comments so much! I am thinking about this a lot, and will try to write the second issue this weekend. I’ve been under the weather so not sure I’ll get it done by Sunday, but we’ll see!
WOW. Tremendous piece, Joel. And well written. This is the sort of thinking we need to start addressing the true root of the perverse incentives problem we have in cities.
Another issue with co-ops that we were told during a mini conference I attended on the subject was that there’s often a lack of expertise among the residents to properly manage the finances and upkeep of common elements. We have co-ops here that are forced to sell parts of their property to fund capital repair projects. It’s a shame because with better management they could have potentially avoided that. But they seem to die and get liquidated by a thousand cuts, and so this leaves me to think that there needs to be extra supports available to help co-ops with property management. Maybe a special tent organization that provides help, advice, resources and even financing that is suitable for the asset.
A third thing to consider: it is hard to find a group of people who are organized enough to get a project like this off the ground. Do we create processes that allow developers to kickstart them? Do we create a place for ppl to meet and find potential partners? I know DAOs have elements that potentially addresses part of the coordination issues but the messy human bits and dysfunctional real estate context still require addressing.
Anyhow, something to also think about. :)
Fei-Ling,
Thank you so much for the comment and kind words! Those are some great things to think about.
I certainly agree that management in a lot of co-ops could be an issue since most members wouldn’t have any professional training in that area. That’s something where I think working at the scale of a neighborhood or small city would be advantageous over just a building. At that scale, it makes sense to hire a professional management team just like one would in a company. They would be appointed by a board, who would in turn be representing the shareholders of the business (and of course you would want the board and management team all to be significant shareholders in the whole thing)
Running the entire community that way instead of individual buildings would bring a different set of challenges, but I think we’re at the point with crypto that it can be done. It wouldn’t have been possible 5-10 years ago because of the really high transaction costs of coordinating that many people, but I think we are getting there.
Also, I think some kind of digital interface could make interactions with the organization on a daily basis much easier for individuals. I’ve always been interested in local news and local politics (Since that’s the scale where people can have an impact) and am interested in why people get so disillusioned by it. Well, it’s kind of obvious: the current system was developed hundreds of years ago when information took weeks to move and people’s lives looked very different than they do now.
I’ve been reading A Pattern Language again and a theme that really jumps out to me is Alexander’s focus on governance at the right scale - advocating for pushing decision making to the lowest level possible - even down to clusters of individual houses for certain things. Not only does that result in more diversity because each area can govern and invest money in its own way, but it humanizes the process and invites people to engage with it.
And to your last point - yeah, the bootstrapping problem as Joni Baboci calls it (I’m actually chatting with him next week about this) is the most difficult to overcome.
My thought would be that something like this would be best attempted not in the middle of nowhere like many new cities are. Instead, it should be done directly adjacent to an already established place that has infrastructure and demand for housing. So it can access and use that demand and infrastructure but not be under the political jurisdiction of that city.
So you could probably get a majority of residents who are wanting to move to the adjacent city but move to this location instead, because I think though it would be new it offers a compelling value proposition in that it’s likely more affordable than whatever other housing is in the city, and presents an opportunity to be part of something interesting.
Then whichever residents you can attract from other locations because they think it’s a cool project are just a bonus! I think remote workers who tend to move around every few months would be interested too
Anyway, this was a little long-winded, but I appreciate your comments so much! I am thinking about this a lot, and will try to write the second issue this weekend. I’ve been under the weather so not sure I’ll get it done by Sunday, but we’ll see!