this is a story of two houses house one
house one is in the bay area three
bedrooms two baths new construction and
it’s news and new countertops new floors
you don’t have to worry about termites
you don’t have to worry about rust in
fact you don’t have to worry about
anything at all because your builder
just inspected everything when you apply
for an occupancy permit yeah if you were
the kind of person to climb on your roof
before you bought a home you would find
that the tar on the shingles was still
sticky the water heater in your garage
that you were going to use and not think
about for the next 20 years 25 years it
still has this for sale sticker it still
has its warranty if anything goes wrong
with that water heater next year the
year after or the year after that redeem
your warranty and there’s a new water
heater waiting for you now house 1 isn’t
perfect it only has a 1 car garage it
doesn’t have air conditioning it only
has 3 available places to put all of
your clothes but I would bet the given
the right opportunity house 1 would keep
your family dry in a rainstorm and it
would give you the opportunity to thrive
now the cost of house 1 is 23,000 $100
I can tell looking around now some people have very serious questions about
people have very serious questions about buying house well that’s okay we’ll save
buying house well that’s okay we’ll save those house to house – what to say about
those house to house – what to say about house to house – is also in the Bay Area
house to house – is also in the Bay Area also three bedrooms two baths but house
also three bedrooms two baths but house 2 was built 50 years ago needs a little
2 was built 50 years ago needs a little bit of work it got a new roof 25 years
bit of work it got a new roof 25 years ago the roofs last about 25 years so
ago the roofs last about 25 years so something to keep an eye on we haven’t
something to keep an eye on we haven’t checked the water heater in a while but
checked the water heater in a while but we’re pretty sure it’s okay maybe maybe
we’re pretty sure it’s okay maybe maybe not but it does have a two-car garage it
not but it does have a two-car garage it does have a dishwasher and the kitchens
does have a dishwasher and the kitchens and bathrooms are updated in the night
and bathrooms are updated in the night nineties oh the nineties it’s funny like
nineties oh the nineties it’s funny like we have entire stores dedicated to
we have entire stores dedicated to mid-century modern like we love the 50s
mid-century modern like we love the 50s 60s and a little bit of the 70s but you
60s and a little bit of the 70s but you get to the 90s and people cannot stand
get to the 90s and people cannot stand it but you see like black frigerators
it but you see like black frigerators and like gold faucets and those weird
and like gold faucets and those weird Ice Cube locks but anyway that’s house
Ice Cube locks but anyway that’s house to also keep you giant a rainstorm we’re
to also keep you giant a rainstorm we’re just not sure for how long the cost of
just not sure for how long the cost of house two is five hundred and sixty one
house two is five hundred and sixty one thousand dollars so which house would
thousand dollars so which house would you rather buy interesting interesting
you rather buy interesting interesting so we have twenty three thousand we have
so we have twenty three thousand we have five hundred sixty one thousand we have
five hundred sixty one thousand we have new construction we have fifty years old
new construction we have fifty years old we have no weird Ice Cube locks and we
we have no weird Ice Cube locks and we have plenty of weird Ice Cube locks but
have plenty of weird Ice Cube locks but you guys probably know this is a trip
you guys probably know this is a trip somehow and it is so before you answer
somehow and it is so before you answer you should know they’re the same house
you should know they’re the same house let’s talk about why in 1970 the average
let’s talk about why in 1970 the average cost of a home in California was
cost of a home in California was twenty-three thousand one hundred
twenty-three thousand one hundred dollars by 1990 that number had grown
dollars by 1990 that number had grown almost ten times to one hundred and
almost ten times to one hundred and ninety five thousand dollars the market
ninety five thousand dollars the market crests in 2007 things get bad in 2008
crests in 2007 things get bad in 2008 they get worse in 2009 but then we kind
they get worse in 2009 but then we kind of forget about the whole thing
the average cost of a house by the end of this year beginning of next year is
of this year beginning of next year is projected to be 561 thousand dollars so
projected to be 561 thousand dollars so why the misleadingly titles story of two
why the misleadingly titles story of two houses everything’s more expensive than
houses everything’s more expensive than it used to be right sort of this is the
it used to be right sort of this is the Consumer Price Index it gives us a sense
Consumer Price Index it gives us a sense of the average cost of a cart of goods
of the average cost of a cart of goods over time this is the cost of housing
over time this is the cost of housing over the same amount of time so as
over the same amount of time so as expensive as everything else is gotten
expensive as everything else is gotten the cost of housing is drawing three and
the cost of housing is drawing three and a half times faster if I get rid of the
a half times faster if I get rid of the CPI just leave the cost increase in
CPI just leave the cost increase in housing over time does anyone want to
housing over time does anyone want to guess what the Green Line is that is the
guess what the Green Line is that is the growth of income over the same period
growth of income over the same period yeah but it gets worse if house one was
yeah but it gets worse if house one was fifty years ago in house two is
fifty years ago in house two is present-day house three is 50 years from
present-day house three is 50 years from now do you even want me to push ahead
over the last 50 years home values in California have appreciated it seven
California have appreciated it seven percent a year we’ve had booms we’ve had
percent a year we’ve had booms we’ve had busted netted out to seven percent if
busted netted out to seven percent if you take a straight line seven percent
you take a straight line seven percent and apply that to the next 50 years our
and apply that to the next 50 years our once $23,000 home now retails for just
once $23,000 home now retails for just under 17 million dollars yeah so I think
under 17 million dollars yeah so I think you guys can agree with me that this
you guys can agree with me that this path is probably unsustainable the topic
path is probably unsustainable the topic of this TED talk is movement and the way
of this TED talk is movement and the way it was explained to me the American
it was explained to me the American Dream is predicated on socio-economic
Dream is predicated on socio-economic movement it starts simple enough
movement it starts simple enough we start by renting you build credit you
we start by renting you build credit you then save up for a down payment you buy
then save up for a down payment you buy something small you pay down your debt
something small you pay down your debt you advance in your career you sell that
you advance in your career you sell that house and you buy something bigger I
house and you buy something bigger I would argue that all of the value we’ve
would argue that all of the value we’ve created in the intervening 50 years all
created in the intervening 50 years all of the dishwashers and air conditioners
of the dishwashers and air conditioners are not worth as much as what we’ve lost
are not worth as much as what we’ve lost the first step
movement the idea that we can move is based on the idea that we have places to
based on the idea that we have places to go so the question I pose to the
go so the question I pose to the brilliant minds in this room what
brilliant minds in this room what happens when it takes less than
happens when it takes less than two-thirds of a human lifetime for the
two-thirds of a human lifetime for the American dream to be 350 percent more
American dream to be 350 percent more expensive than it used to be or to ask
expensive than it used to be or to ask the same question another way what
the same question another way what happens when an entire generation loses
happens when an entire generation loses its ability to move the answer is it
its ability to move the answer is it gets creative so I’ve been interested in
gets creative so I’ve been interested in housing for a long time and I’ve learned
housing for a long time and I’ve learned that complex problems require complex
that complex problems require complex solutions and complex solutions require
solutions and complex solutions require exhaustive authoritative research
exhaustive authoritative research sources and luckily I found one I’m
sources and luckily I found one I’m kidding but I’m not kidding
kidding but I’m not kidding somewhere along my six or a season binge
somewhere along my six or a season binge watching house hunters I came across a
watching house hunters I came across a woman who wanted to buy a brownstone in
woman who wanted to buy a brownstone in New York a brownstone is essentially a
New York a brownstone is essentially a triplex built on top of each other so
triplex built on top of each other so she bought this home moved into the
she bought this home moved into the basement unit and took the cost of
basement unit and took the cost of buying it and split it in half
buying it and split it in half that was the what she charged as rent
that was the what she charged as rent for the first two units and she
for the first two units and she essentially had a house for free and I
essentially had a house for free and I thought aha
thought aha there’s something what if I found a
there’s something what if I found a piece of land divided it by four built
piece of land divided it by four built four houses on it took the cost of
four houses on it took the cost of building those four houses divided that
building those four houses divided that number by three and then I have a house
number by three and then I have a house for free that’d be cool except it didn’t
for free that’d be cool except it didn’t work and the reason why it didn’t work
work and the reason why it didn’t work is that the land that is available is
is that the land that is available is available for a very good reason it’s
available for a very good reason it’s either not for sale it’s for sale and
either not for sale it’s for sale and it’s astronomically expensive it’s
it’s astronomically expensive it’s located in a city that has no interest
located in a city that has no interest in developing it could be filled with
in developing it could be filled with poison unfortunately that’s a real thing
poison unfortunately that’s a real thing some land is just filled with poison but
some land is just filled with poison but there was one reason that gave me reason
there was one reason that gave me reason for pause it’s just too
for pause it’s just too small now to understand to smell you
small now to understand to smell you have to understand how housing grew up
have to understand how housing grew up in America after World War two baby boom
in America after World War two baby boom happened we had to build a lot of homes
happened we had to build a lot of homes really quickly companies were building
really quickly companies were building 50 60 70 homes at a time it almost never
50 60 70 homes at a time it almost never made sense for them to build one home or
made sense for them to build one home or two homes or five homes but you know
two homes or five homes but you know what they say one man’s trash is another
what they say one man’s trash is another man’s opportunity to build five homes in
man’s opportunity to build five homes in my case I’m gonna try to build ten but
my case I’m gonna try to build ten but this is how we square it is a net zero
this is how we square it is a net zero energy project I am currently developing
energy project I am currently developing in Northern California it does not cost
in Northern California it does not cost twenty three thousand dollars but it
twenty three thousand dollars but it cost a hundred thousand dollars less
cost a hundred thousand dollars less than the average cost of a home in
than the average cost of a home in California and significantly less than
California and significantly less than the cost of the homes in the area we
the cost of the homes in the area we tried to take the lessons from house
tried to take the lessons from house hunters to heart we tried to offer high
hunters to heart we tried to offer high ceilings open floor plans we couldn’t
ceilings open floor plans we couldn’t fit a double vanity but we were able to
fit a double vanity but we were able to get stainless steel appliances and build
get stainless steel appliances and build beautiful spaces but the idea is that
beautiful spaces but the idea is that something like this isn’t the end of the
something like this isn’t the end of the conversation it’s the start of the
conversation it’s the start of the conversation because we want to do
conversation because we want to do something like put that step back on the
something like put that step back on the staircase so I started this talk
staircase so I started this talk discussing two houses I followed up with
discussing two houses I followed up with the discussion of a third I’ll be a
the discussion of a third I’ll be a short poignant house the difference
short poignant house the difference between the first two houses and the
between the first two houses and the third house though is that the story of
third house though is that the story of the third house hasn’t been written yet
the third house hasn’t been written yet and I’m here to argue that if we change
and I’m here to argue that if we change our perception of the amount of land we
our perception of the amount of land we need to build a house and the amount of
need to build a house and the amount of house we need to be happy that the story
house we need to be happy that the story of that third house it might just end it
of that third house it might just end it happily ever after
happily ever after and for me that’s an idea we’re
and for me that’s an idea we’re spreading thank you
house one is in the bay area three
bedrooms two baths new construction and
it’s news and new countertops new floors
you don’t have to worry about termites
you don’t have to worry about rust in
fact you don’t have to worry about
anything at all because your builder
just inspected everything when you apply
for an occupancy permit yeah if you were
the kind of person to climb on your roof
before you bought a home you would find
that the tar on the shingles was still
sticky the water heater in your garage
that you were going to use and not think
about for the next 20 years 25 years it
still has this for sale sticker it still
has its warranty if anything goes wrong
with that water heater next year the
year after or the year after that redeem
your warranty and there’s a new water
heater waiting for you now house 1 isn’t
perfect it only has a 1 car garage it
doesn’t have air conditioning it only
has 3 available places to put all of
your clothes but I would bet the given
the right opportunity house 1 would keep
your family dry in a rainstorm and it
would give you the opportunity to thrive
now the cost of house 1 is 23,000 $100
I can tell looking around now some people have very serious questions about
people have very serious questions about buying house well that’s okay we’ll save
buying house well that’s okay we’ll save those house to house – what to say about
those house to house – what to say about house to house – is also in the Bay Area
house to house – is also in the Bay Area also three bedrooms two baths but house
also three bedrooms two baths but house 2 was built 50 years ago needs a little
2 was built 50 years ago needs a little bit of work it got a new roof 25 years
bit of work it got a new roof 25 years ago the roofs last about 25 years so
ago the roofs last about 25 years so something to keep an eye on we haven’t
something to keep an eye on we haven’t checked the water heater in a while but
checked the water heater in a while but we’re pretty sure it’s okay maybe maybe
we’re pretty sure it’s okay maybe maybe not but it does have a two-car garage it
not but it does have a two-car garage it does have a dishwasher and the kitchens
does have a dishwasher and the kitchens and bathrooms are updated in the night
and bathrooms are updated in the night nineties oh the nineties it’s funny like
nineties oh the nineties it’s funny like we have entire stores dedicated to
we have entire stores dedicated to mid-century modern like we love the 50s
mid-century modern like we love the 50s 60s and a little bit of the 70s but you
60s and a little bit of the 70s but you get to the 90s and people cannot stand
get to the 90s and people cannot stand it but you see like black frigerators
it but you see like black frigerators and like gold faucets and those weird
and like gold faucets and those weird Ice Cube locks but anyway that’s house
Ice Cube locks but anyway that’s house to also keep you giant a rainstorm we’re
to also keep you giant a rainstorm we’re just not sure for how long the cost of
just not sure for how long the cost of house two is five hundred and sixty one
house two is five hundred and sixty one thousand dollars so which house would
thousand dollars so which house would you rather buy interesting interesting
you rather buy interesting interesting so we have twenty three thousand we have
so we have twenty three thousand we have five hundred sixty one thousand we have
five hundred sixty one thousand we have new construction we have fifty years old
new construction we have fifty years old we have no weird Ice Cube locks and we
we have no weird Ice Cube locks and we have plenty of weird Ice Cube locks but
have plenty of weird Ice Cube locks but you guys probably know this is a trip
you guys probably know this is a trip somehow and it is so before you answer
somehow and it is so before you answer you should know they’re the same house
you should know they’re the same house let’s talk about why in 1970 the average
let’s talk about why in 1970 the average cost of a home in California was
cost of a home in California was twenty-three thousand one hundred
twenty-three thousand one hundred dollars by 1990 that number had grown
dollars by 1990 that number had grown almost ten times to one hundred and
almost ten times to one hundred and ninety five thousand dollars the market
ninety five thousand dollars the market crests in 2007 things get bad in 2008
crests in 2007 things get bad in 2008 they get worse in 2009 but then we kind
they get worse in 2009 but then we kind of forget about the whole thing
the average cost of a house by the end of this year beginning of next year is
of this year beginning of next year is projected to be 561 thousand dollars so
projected to be 561 thousand dollars so why the misleadingly titles story of two
why the misleadingly titles story of two houses everything’s more expensive than
houses everything’s more expensive than it used to be right sort of this is the
it used to be right sort of this is the Consumer Price Index it gives us a sense
Consumer Price Index it gives us a sense of the average cost of a cart of goods
of the average cost of a cart of goods over time this is the cost of housing
over time this is the cost of housing over the same amount of time so as
over the same amount of time so as expensive as everything else is gotten
expensive as everything else is gotten the cost of housing is drawing three and
the cost of housing is drawing three and a half times faster if I get rid of the
a half times faster if I get rid of the CPI just leave the cost increase in
CPI just leave the cost increase in housing over time does anyone want to
housing over time does anyone want to guess what the Green Line is that is the
guess what the Green Line is that is the growth of income over the same period
growth of income over the same period yeah but it gets worse if house one was
yeah but it gets worse if house one was fifty years ago in house two is
fifty years ago in house two is present-day house three is 50 years from
present-day house three is 50 years from now do you even want me to push ahead
over the last 50 years home values in California have appreciated it seven
California have appreciated it seven percent a year we’ve had booms we’ve had
percent a year we’ve had booms we’ve had busted netted out to seven percent if
busted netted out to seven percent if you take a straight line seven percent
you take a straight line seven percent and apply that to the next 50 years our
and apply that to the next 50 years our once $23,000 home now retails for just
once $23,000 home now retails for just under 17 million dollars yeah so I think
under 17 million dollars yeah so I think you guys can agree with me that this
you guys can agree with me that this path is probably unsustainable the topic
path is probably unsustainable the topic of this TED talk is movement and the way
of this TED talk is movement and the way it was explained to me the American
it was explained to me the American Dream is predicated on socio-economic
Dream is predicated on socio-economic movement it starts simple enough
movement it starts simple enough we start by renting you build credit you
we start by renting you build credit you then save up for a down payment you buy
then save up for a down payment you buy something small you pay down your debt
something small you pay down your debt you advance in your career you sell that
you advance in your career you sell that house and you buy something bigger I
house and you buy something bigger I would argue that all of the value we’ve
would argue that all of the value we’ve created in the intervening 50 years all
created in the intervening 50 years all of the dishwashers and air conditioners
of the dishwashers and air conditioners are not worth as much as what we’ve lost
are not worth as much as what we’ve lost the first step
movement the idea that we can move is based on the idea that we have places to
based on the idea that we have places to go so the question I pose to the
go so the question I pose to the brilliant minds in this room what
brilliant minds in this room what happens when it takes less than
happens when it takes less than two-thirds of a human lifetime for the
two-thirds of a human lifetime for the American dream to be 350 percent more
American dream to be 350 percent more expensive than it used to be or to ask
expensive than it used to be or to ask the same question another way what
the same question another way what happens when an entire generation loses
happens when an entire generation loses its ability to move the answer is it
its ability to move the answer is it gets creative so I’ve been interested in
gets creative so I’ve been interested in housing for a long time and I’ve learned
housing for a long time and I’ve learned that complex problems require complex
that complex problems require complex solutions and complex solutions require
solutions and complex solutions require exhaustive authoritative research
exhaustive authoritative research sources and luckily I found one I’m
sources and luckily I found one I’m kidding but I’m not kidding
kidding but I’m not kidding somewhere along my six or a season binge
somewhere along my six or a season binge watching house hunters I came across a
watching house hunters I came across a woman who wanted to buy a brownstone in
woman who wanted to buy a brownstone in New York a brownstone is essentially a
New York a brownstone is essentially a triplex built on top of each other so
triplex built on top of each other so she bought this home moved into the
she bought this home moved into the basement unit and took the cost of
basement unit and took the cost of buying it and split it in half
buying it and split it in half that was the what she charged as rent
that was the what she charged as rent for the first two units and she
for the first two units and she essentially had a house for free and I
essentially had a house for free and I thought aha
thought aha there’s something what if I found a
there’s something what if I found a piece of land divided it by four built
piece of land divided it by four built four houses on it took the cost of
four houses on it took the cost of building those four houses divided that
building those four houses divided that number by three and then I have a house
number by three and then I have a house for free that’d be cool except it didn’t
for free that’d be cool except it didn’t work and the reason why it didn’t work
work and the reason why it didn’t work is that the land that is available is
is that the land that is available is available for a very good reason it’s
available for a very good reason it’s either not for sale it’s for sale and
either not for sale it’s for sale and it’s astronomically expensive it’s
it’s astronomically expensive it’s located in a city that has no interest
located in a city that has no interest in developing it could be filled with
in developing it could be filled with poison unfortunately that’s a real thing
poison unfortunately that’s a real thing some land is just filled with poison but
some land is just filled with poison but there was one reason that gave me reason
there was one reason that gave me reason for pause it’s just too
for pause it’s just too small now to understand to smell you
small now to understand to smell you have to understand how housing grew up
have to understand how housing grew up in America after World War two baby boom
in America after World War two baby boom happened we had to build a lot of homes
happened we had to build a lot of homes really quickly companies were building
really quickly companies were building 50 60 70 homes at a time it almost never
50 60 70 homes at a time it almost never made sense for them to build one home or
made sense for them to build one home or two homes or five homes but you know
two homes or five homes but you know what they say one man’s trash is another
what they say one man’s trash is another man’s opportunity to build five homes in
man’s opportunity to build five homes in my case I’m gonna try to build ten but
my case I’m gonna try to build ten but this is how we square it is a net zero
this is how we square it is a net zero energy project I am currently developing
energy project I am currently developing in Northern California it does not cost
in Northern California it does not cost twenty three thousand dollars but it
twenty three thousand dollars but it cost a hundred thousand dollars less
cost a hundred thousand dollars less than the average cost of a home in
than the average cost of a home in California and significantly less than
California and significantly less than the cost of the homes in the area we
the cost of the homes in the area we tried to take the lessons from house
tried to take the lessons from house hunters to heart we tried to offer high
hunters to heart we tried to offer high ceilings open floor plans we couldn’t
ceilings open floor plans we couldn’t fit a double vanity but we were able to
fit a double vanity but we were able to get stainless steel appliances and build
get stainless steel appliances and build beautiful spaces but the idea is that
beautiful spaces but the idea is that something like this isn’t the end of the
something like this isn’t the end of the conversation it’s the start of the
conversation it’s the start of the conversation because we want to do
conversation because we want to do something like put that step back on the
something like put that step back on the staircase so I started this talk
staircase so I started this talk discussing two houses I followed up with
discussing two houses I followed up with the discussion of a third I’ll be a
the discussion of a third I’ll be a short poignant house the difference
short poignant house the difference between the first two houses and the
between the first two houses and the third house though is that the story of
third house though is that the story of the third house hasn’t been written yet
the third house hasn’t been written yet and I’m here to argue that if we change
and I’m here to argue that if we change our perception of the amount of land we
our perception of the amount of land we need to build a house and the amount of
need to build a house and the amount of house we need to be happy that the story
house we need to be happy that the story of that third house it might just end it
of that third house it might just end it happily ever after
happily ever after and for me that’s an idea we’re
and for me that’s an idea we’re spreading thank you
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