PropertyDAO: Houses that Own and Rent Themselves for Cheap - Part 2
Blockchain fix to homelessness, real estate bubbles & rent-seeking
Imagine a future where houses and property are owned by the blockchain commons and managed via a decentralised autonomous organisation (DAO). Instant ondemand access to any property in the world; the convenience and ease of a hotel booking, fully-furnished and connected, short or very long-term leases, and at a low fixed-term fee based solely on supply and demand.
With the assistance of a global PropertyDAO, each individual property would manage almost everything itself:
- collect rent into it’s wallet address
- pay it’s own mortgage, council rates, wifi and utility bills
- tenant bookings, access and reputation
- schedule maintenance and request repairs
- furniture quality and replacements
As the properties are owned by the blockchain commons, they’re not used as investment vehicles or tax breaks for landlords. Once a property has paid itself off, it need only charge a small fee to cover maintenance and utility costs.
Rent could become as cheap as a Netflix subscription.
Better Than Owning
The allure of owning a home is a persistent meme that underpins the American and Australian Dream. Our society seems to have a strong belief that home ownership represents personal success and social status, despite the accompanying decades of servitude to debt and wages.
In the current system it’s easy to rationalise ownership over renting. The old arguments go “if you’re paying all that rent you may as well put it towards your own mortgage” and “your landlord could sell the place at any time and evict you”. In a reality where property is owned by the blockchain commons, these arguments become irrelevant.
The user experience for PropertyDAO tenants could operate like so:
- Open any web or smartphone app connected to the protocol
- Select the location you’d like to stay and for how long (1–1000+ days)
- Browse available matches and tweak filters (like Airbnb)
- Enter maximum rental amount you’re willing to pay
- Automatic bids are made on all matching criteria
- Highest bid wins, you get notified and entry access code
You’re probably thinking a bidding process would result in high prices, but the system would ensure one person, one booking. High-demand areas will obviously be more expensive, but other areas will likely be cheaper than the landlord-set rental prices today.
Renting would become much cheaper, more convenient, more flexible and just as stable as owning a home.
If you want a 20-year lease at a fixed rate, that’s an option. If you want an instant 1-month lease in another country, that’s also an option. No bonds, nothing to sign, no utility bills, no pesky landlord.
Human Shelter Protocol
Since 2006, the Australian government has been in breach of the UN legal obligation to “progressively realise the human right to adequate housing”. The PropertyDAO could hard-code human rights to housing into the protocol, ensuring that all registered persons have adequate housing every night.
Proof-of-individuality would ensure that only one person can book one property and not simply sublet for a profit. Optionally each property could have IoT sensors that detect exactly who is inside and for how long, offering the potential for micro-payment rent charged per minute, only when in use.
A decentralised reputation system would autonomously manage tenants, restrict property options based on their reputation history and assist in configuring safe, compatible shared housing scenarios. Any disputes requiring human intervention would be outsourced to mediation contractors.
Profits collected by the PropertyDAO could be used to house the homeless and those in financial need.
The DAO could also self-fund new comfortable high-density constructions, contract out maintenance and new renovations or purchase additional housing stock to add to the commons-owned property network.
Economics & Transition Strategies
This is all well and good, but property owners won’t just voluntarily handover their properties to the blockchain commons. Investment property owners generally aren’t evil bourgeois monopoly men in top hats, they’re simply pursuing their own self-interests to turn a profit.
Let’s do a simplistic overview of the personal motivations:
- Homeowners: want a nice stable house for 10–30+ years, an appreciating asset, in a nice secure location near their work, shops, schools etc
- Investors: probably don’t care about the property so long as it’s in a location where demand will push up prices to later sell for a high return
- Renters: want cheap fixed-rate rental prices in comfortable and stable housing, close to their work, shops and public transport
So here’s a few transition strategy ideas to get the ball rolling:
3D Printed Housing
The quickest way to crash the housing bubble is to rapidly increase supply. The technology isn’t quite there yet, but commons-owned 3D printed houses could add millions of new properties into the supply pool. New cities could be printed in a few short years well outside the cities, with hyperloops and self-driving car connections back into the CBD.
Self-Driving Homes
As self-driving technology becomes mainstream in the next few years, it opens the possibility for commons-owned self-driving van homes. This could become a much more attractive, convenient and inexpensive option for younger generations. When you’re finished having a night out with friends, just tap a button and your bedroom picks you up. A rooftop drone delivers food and packages ondemand, and even does your laundry.
Property Crowdfunding Coin
Cryptocurrency and coin tokens are booming in the blockchain space. The PropertyDAO could hold an initial coin offering (ICO) to raise funds to buy the first properties, and mint a trade-able floating token for various uses: rental payments, reputation management, crowdfunding property purchases, buying from property investors, powering an investment pool etc. Many decentralised networks for real estate are already under development.
Property Investment Pool
Investment properties are primarily financial investments, while the property itself is secondary. If you could give an investor the same or better returns, would they care whether they personally owned the property or not? Investors already amass portfolios to hedge their bets and spread their risk. The PropertyDAO could offer an investment pool whereby investors handover property ownership in return for a hard-coded financial return, spread across a much larger portfolio of 1000s of properties.
Property Retirement Scheme
For those property investors who are in the game because they want to eventually sell their portfolios to fund their retirements, the PropertyDAO could offer another incentive to buy those. The DAO could offer a price above market rates, with the catch being that the purchase payments are made monthly over a 10–20+ year schedule. In return, they would receive priority access to the network of properties in the PropertyDAO. For example, the DAO will buy your $1m property for $1.1m, and you receive $50k per year for 22 years with VIP access to stay for free at any property in the global network.
Property Investor AI
Most stock trades are now performed by high-frequency machine learning algorithms crunching vast datasets to trade the markets. The same could be used to buy and sell property in order to maximise the PropertyDAO occupant capacity or portfolio size. A property investor AI could crunch vast datasets to predict which properties to buy/sell and when, then act autonomously or contract out the purchase/sale to local real estate agents.
Idea to Reality
This is clearly a huge global problem with an ambitious vision that will take a collective effort, over many years and by countless people more intelligent than myself. For now I’m busy building an economic protocol to free people from 9–5 jobs and transition to a post-capitalist economy (join us).
If you’re just as disturbed by the trend of housing affordability, please share this post, add your thoughts or ideas in the comments. And feel free to turn any of these ideas into reality. For the first time in human history we now have the technology that enables anyone to rapidly change the world.
Let’s harness it to make the world a better place for everyone.
