Mike Townsend: Today's guest on Around The Coin is Geoff Thompson. He is the Chief Blockchain Officer at Roofstock. Roofstock has raised over 250 million at a 1.9 billion valuation,and they're in the business of PropTech. So Geoff specifically is working onintegrating cryptocurrency into PropTech, specifically allowing tokenization ofsingle family rental properties. We talked about how they're doing thatexactly. And how that business and that concept should scale across the US andthe world. We dived into some of the regulatory and philosophical perspectiveson governments intervention in property laws both from the municipalitystandpoint, the state, and then the federal government.

Mike Townsend: And then we talkedabout new ideas in the future to potentially create sanctuary cities to iterateand test on new property tech laws. So really mind expanding conversation withGeoff and I hope you enjoy. If you do enjoy these conversations, please do giveus a like or shout out, retweet wherever you're listening to the podcast.

Mike Townsend: Really much appreciateit. Here is Geoff Thompson.

Mike Townsend: All right Geoff, sojust like that we're live. I'm excited to chat with you. , You are currentlythe chief Blockchain Officer at Roofstock. What is the Chief Blockchain Officerdo on a day to day basis? And then sort of just pave the foundation a littlebit by telling me what Roofstock is.  

Geoffrey Thompson: Yeah, absolutely. Andthanks for having me, Mike. Mike. So Roofstock is a PropTech company. We'vebeen around since 2015, did a series E earlier this year. The focus has alwaysbeen on making single family rental homes more accessible as an asset class,both for institutional and retail investors. And, and the web three initiative,which is what I lead is really the business unit that's dedicated to kind ofbridging what we do right now with the next phase of technical innovation andblockchain.

Geoffrey Thompson: And so I kind ofbacked into this role and the title as well. I was previously general counselat the company. And earlier last year, there was some desire from leadershipand the board to, to think about blockchain and can it help our mission to makereal estate ownership more accessible and available.

Geoffrey Thompson: And we found that thereis a way to, to do that. And it, it is that promise of blockchain. Makingthings more transparent, more immediate more direct. And and so that's whatwe're doing. So on a day to day basis this year really it's been a lot of legalstructuring. It's, it's kind of in the wheelhouse of, you know, a lawyer and,and my kind of partner in crime who's co-leading this has knowledge offinancial institutions and, and the financial industry. So we really startedwith the difficult stuff that people don't want to think about when you'retalking about putting something on chain. Like, you know, how do you recordtitle and still have a transfer of ownership on chain?

Geoffrey Thompson: What about insurance?How do you deal. Inspections, like all of that kind of nitty gritty that's beenwhat we're dealing with this year. But, but the ultimate upshot of that is thatwe got to a product where you actually can purchase a single family rentalhome. with one click using a standard NFT smart contract.

Geoffrey Thompson: So that's, that's the,the transaction. You can buy it on open C, you can buy it on our marketplace.You can buy it on any other NFT marketplace and you can buy it with crypto. Sothat's, you know, there have been, I know. Extending your, your question a littlebit, but you know, that's really kind of the background on who we are and whatwe're doing.

Geoffrey Thompson: And, and so that's thefirst phase which we just launched announced last week that first property'savailable for sale and then the next phase will be adding some type offinancing option to that. .  

Mike Townsend: And how do youanticipate scaling this? So you mentioned you have one property now that isavailable. Is this, is there a distinctly different path to scaling as therewas in sort of this prototyping phase?  

Geoffrey Thompson: Yeah, the, the scalingfortunately that's where Roofstock is, is really has a competitive moat. We'vespent seven years building out the infrastructure to manage the sourcing. Inacquisition, renovation and management of properties at scale, we manage 16,000homes.

Geoffrey Thompson: Right now we'vetransacted 5 billion of single family rentals. So that's where we, you know,we're ready to scale. We can buy hundreds of homes literally a month if that'swhat we want to do, and, and renovate them. And manage them. So it's really nowjust a question to finding zeroing in on the product market. Making sure thatthis has all of the features that, that our customers are looking for, and thenwe can wrap up.  

Mike Townsend: Hmm. And do youanticipate the way that the majority of the single family home market comes onchain is through, would it be through like a reverse mortgage HeLOCK type dealwhere, you know, I. $500,000 home. I have 20% down, 80% is in a mortgage thatI'm paying interest on in principle. And then I say, Hey, you know, most of mynet worth, this is like an individual perspective. Most of my net worth is inthis house. I wanna have some diversification. Let me sell off 40% of what Iown in this house and de-risk is that kind of the general financial motivationthat people will have that pushes this thing to mainstream?

Geoffrey Thompson: Yeah, that's there area number of, of different motivating factors. So, so that structure isdefinitely something that we want to get to. The functional equivalent of aHeLOCK, as you said.

Geoffrey Thompson: And what we wanna dois, is use the DeFi ecosystem as a way to prove that that that can be a viablealternative to the traditional you know, bank lenders. So, so what we see therewould be, right, you have a house that's unencumbered. You either you bought itas a token or you want to tokenize it.

Geoffrey Thompson: And then as soon asyou have done that, you have a token that can be pledged to a lender and thelender you can borrow, you know, against against your token. And that can allbe done on chain and that can be done without necessarily even. Having thepersonal underwriting of your credit, it can just be based on the value of yourasset.

Geoffrey Thompson: So that's, we, we dosee that in the, in the near term. Other types of fractional ownership models.You know, we, we definitely looked at most of those would lead to, to thisbeing a security under securities. And so we've been careful in our side ofthings to structure around that. Although if someone wanted to buy our hometokens and then create their own fund or somehow fractionalize them afterthey've, they've purchased them and you know, that's their distribution model,then, then that could be done as well in, in the tokens.

Mike Townsend: Do they, So walk methrough a little bit from a legal perspective, how we would go from.Effectively, it has to be government or state recognized property ownership.Right? That's the, that's the one thing that, you know, keep assures peoplethat, hey, no one else can just walk in and, and kick me out, is that there's,you know, the military and, and the state government behind it, Federal go,whoever's behind it.

Mike Townsend: But then there's, there'sa series of documents and. Ledgers that kind of lead up to the canonical sourcefor me being the owner of the house. Is that what the title is and what, what,how did we move from the current structure to on chain?  

Geoffrey Thompson: Yeah. Yeah. That,that's the core question in all of this. Like, do you have a legallyenforceable ownership interest or not?

Geoffrey Thompson: Right. I mean, there'sno point to do all of this and then find out that if you go to a judge and askhim to enforce your right. They're not gonna recognize it. Right. So, so yeah,I mean, the legal enforceability is, is key. The way that we've done that iswe, we title each home in an llc. So, so that initial process of settling thehome, titling it, recording that title with the local county registrar, Thatall happens.

Geoffrey Thompson: You know, we haven't,we haven't changed the law and the legislation that relates to propertyownership, so we still have to work within that. You know, hopefully one day wecould think about land titles being a registry on a blockchain, right? Butthat's, A number of years into the future, and that requires a lot of things tochange.

Geoffrey Thompson: But right now we'reworking with what we have. So that means putting it into an llc. And then thatLLC ownership interest is actually what. Represented on chain. I mean,technically, legally what's happening is if I sell that, that home token to youthat serves that transaction on the block, blockchain actually serves as thenotification to the LLC to update its books and records.

Geoffrey Thompson: With a new owner. Soby virtue of that transacting online, we're listening to the blockchain. We seethat one of our tokens was sold, changed hands, and that that automaticallycauses the LLC to update its books and records to reflect the new owner. Sothat's how we manage to get to a one click transaction, even though, you know,we still have to respect the existing home ownership, you know propertyrecreation mechanics.  

Mike Townsend: Yeah. Yeah. In thisscenario, I don't see that as being a significant negative attribute, and thefact that your bookkeeping ledger is just listening to the blockchain, likeultimately the big value add here, the big unlock is the fact that. There's nowa massive liquidity pool of people who retail and institutional want to investin, like my home or my community's home, or you know, however, however peopleare strategically investing, it just unlocks new.

Mike Townsend: So to me it doesn'treally matter how that happens, as long as you can guarantee, like you said, ifyou were ever in front of a judge that you do have recognized ownership, whichit sounds like going through the llc. Let me just restate it and you tell me ifI'm, if I'm correct here, so that when you're purchasing you as the as the fundare purchasing a home, you're doing so through an llc.

Mike Townsend: So a shell company isbeing created, that company is funded, and then it purchases the home, andwhoever owns the LLC owns the property designated for that llc. I would imagineyou have one llc. How property, So then you, Right. Okay. And so you just kindof have this machine that spins up LLCs as, as kind of umbrella or shellcompanies.

Mike Townsend: So if I were to own 2%of the llc, that means I own 2% of the property. And now, however, the LLCdetermines who owns 2% is really up to the LLCs operating agreement. Right. Soyou would just specify, Okay, we're gonna update this based on blockchain smartcontract transaction.  

Geoffrey Thompson: That's exactly right.At the moment, we're not offering the fractional shares. So it's, it's oneperson, one llc, one property, and, and the fractionalization is, is definitelypossible and almost trivial as a, as a technical matter, once it's on chain itdoes create other issues like securities laws. Tax partnerships and things likethat. So even though that's possible at the moment, we're just starting with amore vanilla version, which is if you buy that token, then you have the fullownership of that property.

Geoffrey Thompson: And that's, you know,as, as the base case, that's that's where we're starting. And then we can thinkabout more exotic structures in the future.

Mike Townsend: How long do you thinkit'll be before if somebody had a hundred k, that they could put $1,000 into ahundred cities? In the United States using smart contracts?

Geoffrey Thompson: Yeah, that's that'snot far. I, I think that actually exists right now. There are a, a number ofcompanies that we're aware that, that have that model, you can invest for aslittle as $50 in a house, and if you wanted to spread that out over multiplehouses, you could do that. Also we have a prop a project at Roofstock, which,Right now, it's not tokenized, it's just a, a security, It's a root that alsoallows you to invest in you know, targeted areas, a small amount.

Geoffrey Thompson: And so there are, Thatactually is is the, the short answer. The trick there is that with theco-ownership of single family rental homes, diversified ownership can be trickybecause if that needs a new roof and you have a hundred owners, Only 25 of themshow up with cash to fix the roof or replace the roof.

Geoffrey Thompson: What do you do? Youknow, there's a governance issue there. And then it also becomes a, apartnership for tax purposes, which means everyone has to get a K one. And soit's, it's not that it, it doesn't exist or it's not a viable model, but it'smore, it's more complicated than you might initially.

Geoffrey Thompson: So I would say if, ifthat's what you're looking to do, we have a product called Roofstock one.Right? RS one, which is a Reid. And it does, it solves all those issues that Ijust mentioned. Doesn't have capital calls, it doesn't have anything related topartnership because it's a re so that's actually, I think the, the bestsolution for fractional ownership of SFRs on the market, right.

Geoffrey Thompson: And that, that is aroadmap item for us to tokenize that. But then it becomes a little bitdifferent than what we're doing now because it has to fit into the securitiesecosystem.  

Mike Townsend: And and where do yousee the biggest unlock here from an economic perspective? I mean, if you wereto say anybody could move money into crypto and they could purchase propertiesfractional ownership from any, say any.

Mike Townsend: They just throw thisout there in theory, any property in the entire world, if that were possible,what changes do you like? What are the macro effects? Do you think there's amassive influx of investment bankers getting into like small deals or likewhat's, what sort of shifts do you anticipate?

Geoffrey Thompson: I mean, I would hopethe institutions are, are well represented in, in SFR right now, at least inthe us.

Geoffrey Thompson: And, and they bring alot of advantages. You know, they do put in a fairly significant rehab budgetup front of, you know, 20, $30,000. Like, there's, there's an advantage, but wehave always hoped that this would expand to the retail spec sector as well. Soif you have, especially with blockchain, it gets a lot easier.

Geoffrey Thompson: In our system you dohave to be kyc, so we need to know that we're not selling to a sanctionedperson. But other than that, if you're in Europe or Asia or South America andyou want access to the single family housing space in the us, you actually havethat right now through our product we have. A property in South Carolina, if,you know, if I'm in a, a, a foreign country and I want that, that property,literally, I can buy that with crypto again after going through KYC and takeownership of that without having to go through the usual network, you know ofmultiple, probably a dozen intermediaries and international wire transfers andconversion and bank loan here and there. That, I think that's the ultimate goalis we want everyone to have access to this. And, and then to your otherquestion about if any property anywhere in the world were available we wouldalso want this to be something that, you know, is, is cross border.

Geoffrey Thompson: So if I'm sitting herein the Bay Area and I. At exposure to a single family property in Japan, wewould like to be able to provide that. That's, you know, that is, that is afuture roadmap. But each one of those foreign countries has its own you know,legal issues that we'd have to solve. So it's kind of, you know, crawl, walk,run.

Mike Townsend: Yeah. Yeah. I want tokind of ask you a little bit more about that point you made earlier around theroof. So, if. You know, the person living in the home has a distinctlydifferent relationship with the home than the person that owns it. And in thecase of a renter, that that relationship is well worn, right?

Mike Townsend: Like, I own the house.You rent the house, you live in the home. There's a set of rules. What youcan't do, what you can't do. You can paint the walls, you can, you know, Trimthis, you put up the picture, but you can't cut down that. Like there's, and itkind of varies and, and that lease agreement is set by the owner.

Mike Townsend: And the owner'sinterest is, I want cash flow and I want you to not destroy the house becausewhen you leave, I wanna be able to rent it again. And so, given those,Premises. Does it change when these, when the number of owners are so vast thatthere's no kind of central point person that takes responsibility and thereforeno one ultimately has enough at stake here?

Mike Townsend: Like, do you see the,the dynamics changing in a way that. Like what are the, what are the traps thatpeople should be aware of?  

Geoffrey Thompson: Yeah, I mean, theco-ownership aspect of it does present those governance issues. And, and that'swhy we would recommend if people, that's first of all why we're starting withkind of one owner, one property.

Geoffrey Thompson: But, but also ifpeople wanted this to be owned by a group, you know, of, of co investors or.They could potentially do that on their side after they've purchased it. Theycan separate that out as much as they want. We, I think the solution there isagain, assuming that it's a, it's a rental property and it's not somethingwhere people are, have a kind of shared living situation.

Geoffrey Thompson: If it's a rentalproperty, the solution is. Get a property manager you know, there are plentyand we, we can serve that role. We also put you in touch with others that cando that work because that's, you do want that level of professional managementas soon as you, you know, start to dispute well, Okay, we have a roof that'sgonna cost $2,000 to repair, but it only has two years of useful life.

Geoffrey Thompson: So we could actuallyspend 12,000 and get a new roof instead of repairing it. Everyone is gonna havea different view on how they wanna spend their money and when it's much betterto have a property manager that can help you think through those issues. And,and again, the way that we've structured this, it's, it's more those kind ofmanagement decisions should be made by the owner themselves as opposed to us,you know, if, if we're there as a property manager, we can help.

Geoffrey Thompson: Kind of give you theoptions, but we do want the owner to actually be making the decision becauseagain, to avoid you know, any securities loss concerns, they have to kind of beresponsible for any returns, you know, profit and loss that they, they make onthe property or not.  

Mike Townsend: Yeah, that's a goodpoint. I, I live in Portland, Oregon and, and in Vancouver, not far away. Thereis, well, at Vancouver, at Canada, not Washington. There, there was, when Iwent up there recently, there was a lot of talk particularly in the Ubers thatI was in. They were very critical of the investments that were coming into realestate, particularly commercial real estate, but also some high-end residentialfrom China.

Mike Townsend: And I guess the, thedynamic is that people, wealthy individuals in China want to, you know, flightout of the Chinese w or at least the government influencer control over that.And they invest in property as a means to hold it. Well, the, the downside.People living in the city look up and there's a bunch of empty buildings, youknow, like people are buying these properties and then just not even rentingthem because it's not even worth the rental income.

Mike Townsend: And I, and, and sothat brought up the conversation of, well, what, you know, what, where is theline? Because ultimately if there's a price that people pay in the, who areliving in the. You know, ideally the people investing in the properties wantthe flourishing and growth of the city to happen, so then their property goesup.

Mike Townsend: So that's why we getexcited about this idea. But then there's also like a slight conflict ofinterest where like the NIMBY idea, like not, don't build it in my backyard. Ikind of wanna keep things the way they are or the other way around. The otherend of spectrum is I'm gonna, I'm gonna buy some high end real estate and noteven.

Mike Townsend: Invest anything intoit or even staff, it allow people to live in it. Are there other, other, Arethose valid examples? Do you see other examples where there's kind of aconflict of interest between owners and people living in the houses orcommunities?  

Geoffrey Thompson: Yeah, it's a greatquestion. I mean, I've, I've heard of that, that in, in Vancouver as well, and,and actually my, the last residential house that I sold, I was surprised it, Iwas sold to a foreign investor and it sat vacant for 18 months in a, a bullmarket, and rent were very high.

Geoffrey Thompson: And clearly that'swhat happened. Someone just bought in and said, I have my money in a stableasset. I don't want to deal with, you know, fixing a kitchen sink for a tenantor something. So I'll just keep it vacant. There are a lot of jurisdictions inthe US that are starting to regulate that because that, you know, especiallywith the housing crisis being what it is right now in the us a shortage amassive shortage of, of housing I think.

Geoffrey Thompson: Not something that weshould be excited about. You know, these are properties that are meant to beuseful properties in homes for people. If you're looking for just a pure wealthpreservation play there are plenty of other financial products that you canlook for. I wouldn't encourage that.

Geoffrey Thompson: I think the, theattractiveness of this. From an economic standpoint is that it, it has twodifferent income streams potentially. One is the, the monthly rent, you know,which is translated in, in a, in the form of a yield on an annual basis, whichmaybe that's, you know, it's five or 10 or whatever percent that, that you'regetting on your money.

Geoffrey Thompson: And then there's anappreciation play over time which, you know, You could kind of think of thisas, as a bond that has a, a recurring coupon payment plus an equity kicker atthe end. So, so that's why the single family rental home and other residentialreal estate is interesting from a financial perspective.

Geoffrey Thompson: And I wouldn'tencourage people to, to buy it and keep it vacant. That's not, you know,that's, that's not really the point. Maybe you buy it. Let your mother-in-lawlive in it or you buy it and use it as a vacation property. But real estate issupposed to be used and at, at the moment in this country, we need as muchhousing stock as possible.

Mike Townsend: Yeah. Yeah. So, , doyou think? I mean, granted that when someone makes this decision to buy aproperty and then leave it vacant, they're clearly willing to accept thenegative economic factor of not having it be rented in exchange for thestability of it or maybe just the specific properties of the, of this placeitself.

Mike Townsend: I wouldn't imaginemost people are doing, That's probably gonna be like high end. Foreigninvestors that come in, but sometimes that wave is huge and sometimes it canlike significantly alter a city. I doubt that that's gonna be many cities or atleast many cities significantly. I wonder, like I, my general philosophy on.

Mike Townsend: Debating or thinkingthrough legal or regulatory decisions is start with nothing. Start with likewhat nature does is like, there's no laws in nature, right? There's physics,but there's not, like if you go to a jungle, it's like there's no rules. Sostart there and say, okay, the United States if we take property, anybodyanywhere could buy at any time and own any, like anything can happen and.

Mike Townsend: As laws happen, as ashow would you say this? Like as non-intentional negative externalitiesmanifest, then you layer in rules on top of that. Totally. One of the problemsobviously is that these rules tend to become outdated and the problem no longerexists, but the rule exists. Is there sort of a set of guidelines or like aphilosophical compass you have when thinking through with the correct.

Mike Townsend: Regulatory likeframework is for this.  

Geoffrey Thompson: Yeah, absolutely. Andit, it's along the lines of what you described. You know, I mean this, we dosee in this space and we work across, you know, dozens and dozens if nothundreds of different municipalities. And, and we see a lot of regulations thathave sprung.

Geoffrey Thompson: Or call it accretedover generations or hundreds of years. I mean, basically the, the land titlingsystem that we have now dates back to England six or 700 years ago. Right? And,and the, the intermediaries in the transaction process right now, if you breakit down all that you're supposed to have in a real estate transaction, you havetwo concerns.

Geoffrey Thompson: One, the buyer wantsto make sure that they're getting the house that they think they're getting.And two, the seller wants to make sure that they get paid. Like literally,that's it. And, and when you unpack it, you have a constellation of thirdparties that have come into the system to ensure that those two things happen.

Geoffrey Thompson: But you know, youdon't, If you, if you're. A forward thinking policymaker. It is the right timeto start thinking about unpacking that formula, the way that things have beendone for a long time. It doesn't need to be done like that anymore. Blockchain isa perfect example. The, the whole process of creating escrow, for example that,you know, again, that goes to the seller wanting to make sure that they getpaid the way that we've designed it using smart contract.

Geoffrey Thompson: It's simply a smartcontract function. It's does the seller have the home token in their wallet?Does the buyer have enough crypto in their wallet if, and are they both kyc? Ifyes, if yes, it transacts and you don't need a third party to hold someone'smoney, you don't need an earnest money deposit. You don't need any of thatbecause the transaction happens in real time.

Geoffrey Thompson: So I do think that Theregulations aren't necessary. Of course, tenant protection, all of that stuffis necessary. But thinking, you know, the way that the, the laws have evolved,there are a lot of things that are on the books that don't need to be anymore.And, and what we're asking regulators to think about is let's not make littlechanges around.

Geoffrey Thompson: The edges. Let's thinkabout what can be true given this new technology that literally never existedbefore. That smart contract mechanism that I just described that literallyhasn't existed before and can only exist with a blockchain smart contract. So,so that's the way that we think about it, you know?

Geoffrey Thompson: We know that there area lot of incumbents, that there are a lot of policy reasons for X, Y, or Z. Butif you're looking at it from a PO position of how can I make the transactionsfaster and more transparent and better for everyone involved, you kind of need,we're at the point where it's time to, to start with a blank slate and work ourway up as you described.

Geoffrey Thompson: Instead of. Okay, wehave, you know, these 575 regulations that apply. Let's figure out which threethat we should change now. Like throw 'em all out and let's start again. .  

Mike Townsend: Yeah. Yeah. One, onething I wanna, I wanna dig in a little bit with you. You mentioned kind ofquickly there, but the, the tenant regulations are obviously good.

Mike Townsend: How do you come to,not necessarily implying that they're not, but how do you arrive at thatconclusion? Say for instance living in Santa Monica, California rent control isa big deal. And at, at what? And like just to frame it a little bit, rentcontrol controls the percentage rate that a, it controls, I think just thepercentage rate that a owner can increase on the tenant for the property, and Ithink the numbers around 3%.

Mike Townsend: So even if the market.You know, boom, there could be someone. Yeah. And that the part of this thatgets really unfortunate is when somebody who is full and is not connected toyour income. So you could be making a million dollars a year and have, havesigned up for rent for some property on a beachfront property in Santa Monica15 years ago, and you're still.

Mike Townsend: Like an incredibly lowamount. So yeah. Yeah. How, how is this good? Like what are your thoughts onjust.

Geoffrey Thompson: No, no, it's perfect.Thank you for pushing on that. I, I was, I didn't have the rank control mind.And speaking for myself, not my company, I, I think the rank control policiesare, are very misguided. I think they, we do need affordable housing, butpushing that cost onto individual property owners.

Geoffrey Thompson: It's completely thewrong way to do it. You know, as a society, we need affordable housing. Okay,let's go find a way to create affordable housing. But requiring an individualproperty owner to take a hit to subsidize a policy goal for society as a, as a,a whole. I don't think that makes any sense. What I was.

Geoffrey Thompson: Again, that's my ownpersonal opinion. What I was referring to though is things like how you managea security deposit that a tenant's given you. You know, like how do you makesure that that tenant, when they move out, isn't going to be in a situation wherethe landlord says, Oh, I spent your money sorry I can't give you your depositback.

Geoffrey Thompson: Or you know, basicquestions of habit. Like, you know, making sure that there's heating in thewinter. And, you know, clean running water. That's what I was talking about isin terms of tenant protections. Mm-hmm. But I do think that I'm, you know, I'mtalking about habitability and, you know, having a healthy and, and decentplace to live.

Geoffrey Thompson: As opposed toimposing, you know, societal externalities on individual landlords.  

Mike Townsend: Yeah. You mentionedthe two simplest aspects of the buy and sell transaction. You know, sellerwants their money. Buyer wants what they signed up for. I tend to look at thatas like, if the buyer signs up for a property and they know it doesn't have ACor it doesn't have, you know, whatever people think it should have.

Mike Townsend: Bring it up and youhave a case to be made, right? This is, you know, in the lease agreement itsaid it was gonna have ac acs not working you, you refuse to fix it as theowner, therefore, like, I can escalate that or I can leave. And I view the, theescalation process as the legislative or really the, like the judicialposition, right?

Mike Townsend: So I also view it as,P Part of the reason why I, I think most people would agree with you on we needaffordable housing. If you trace that, like if you go upstream to why do weneed affordable housing, why is the free market not capable of building housingfor people who are on the lower income sector, which is usually people who areyounger, like the age is the strongest corollary to income.

Mike Townsend: I tend to view it'sbecause we have things like rent control. The fact that you can make 2 millionand pay, you know, next to nothing for rent because you've been there a longtime. It's like that's, that's the kind of thing that artificially pushes upthe, the cost to everyone else. Cuz now the market is artificially constrainedand you know, when limited supply prices go up, there's a quick thing I learnedin New York.

Mike Townsend: In New York there is apercentage of the. Property in a building, that residential apartment buildingthat the owners have to allocate towards to its low income housing, good intentionpolicy. The ramifications are the vast majority of owners don't even rent thoseout. They just give them to friends and family.

Mike Townsend: And or they rent intofriends and family at very, very low rates because there's also policies thatsaid you can't evict people. And these policies, they, while they sound nice,it's like set a really high minimum wage. It just puts a tremendous amount ofpressure on like automating people outta their jobs or not, not doing what the,the law intended.

Mike Townsend: So my, the more Ilearn about good intention laws, the more I see them as the the, as the rootcause of the problems that. looking at like

Geoffrey Thompson: Totally. Totally. Andyou know, I mean, I'm in California, which. One of the hotspots for anNimbiyism, right? Especially it related to housing. Everyone, you know, wantsto have their own space and they don't want it to change and they like it theway it's been.

Geoffrey Thompson: But we can't havegrowing and thriving communities without. Rethinking the, the use of land andthe way that it's been done. But, but that's absolutely quashed by the existingincumbents everywhere. Right? The existing property owners everywhere uniformlyuse whatever they can to avoid having the, you know, dense housing or to haveto allow someone to construct an in-law suite in the backyard.

Geoffrey Thompson: You know, housingregulations are used at the local level to prevent growth, even though, youknow, as a society we need more, more housing stock. So, totally agree with youon that point.  

Mike Townsend: Okay. So let's takethat for example. So people say, people say, take a blank slate. Like it's,it's wild west. There's just open prairies.

Mike Townsend: People come out there,they build a little. And then they have their town and they say, Okay, we astown owners, we've settled this land, we've built this property. It's legallyours. We don't want anymore building. Now, if you were to do that, then anybodywho wants to move into town would have to, It'd be very expensive to do sobecause you'd have to like, you know, pay a lot to get access to the very smallpercentage of the land available to build.

Mike Townsend: It just seems to methat if you just follow that line of thinking, people would. Go, go buildelsewhere. Like there seems to be like, how do you view the nimbyism as as aproblem?  

Geoffrey Thompson: The problem is that ithappens in population centers, right? Right. That's where the jobs are. And soin the Bay Area or in, you know, in LA or San Diego or the other majorpopulation centers, that's where the economic, until, until Covid hit, right.

Geoffrey Thompson: And everyone had to bein their seat for their job. You know, it, it literally, if you want a job,then your best chance is at one of the population centers where there's a lotof economic activity and therefore you need to be, you know, within drivingdistance of that. And over time you can see, you know, in San Francisco likeMill Valley, which is right across the, the Bay from San Francisco.

Geoffrey Thompson: It used to be kind ofa hippie-ish kind of center in the sixties. And then it developed and developedand now it's very sought after. But you could say the same of any, you know,county outside of LA or or anywhere else, until at some point the next level ofbuilding, you're building a community that's a two hour drive outside of thecity, which again, you know, that means that the person that's coming into thatcommunity, which is a lower cost community, They actually then have to go spendtwo or three or four hours commuting every day just for the benefit of having ajob in that community.

Geoffrey Thompson: And, and that's wherethings get tricky because yes, you could just go to some uninhabited place.There's plenty of land in the US that's completely vacant and you could decidewe're gonna create our city here. But, but to make that happen, A lot of thingshave to be true. You know, you need, you need more than the local bakery anddry cleaner.

Geoffrey Thompson: You need some, youknow, corporate or government or athletic, you know, center of gravity that'sgonna bring people there. And then after time, all of the ancillary activitiesgrow. So it's not. As easy, unfortunately, as, as you know, let's build some,some ancillary cities. Yeah, that could, theoretically, that's good plan, butthat's measured in like generations.

Mike Townsend: Right. Do you see thisas a, I'm not sure if you have your radar on other countries, but do you seeNimbyism. Playing out in other places as well. Like is this a sort of anevolutionary process of human civilizational development or is this somehowlike a, a tumor on the regulatory structure of our american propertysystem?  

Geoffrey Thompson: No, no. It's a, it's,it's a tumor on, on the human condition. Yeah. . I mean, like, I, I rememberseeing some map of an ancient Egyptian city and sure enough in the desirablecity center you had bigger homes. That were owned by the wealthy. And then asyou got farther out, you had smaller, more compact housing right next to thecity dump.

Geoffrey Thompson: You know, like thatexisted a long time ago. And that instinct is pervasive everywhere. Are theresocieties that have dealt with it better? Probably. I, I can't, I'm not up to speedenough. You know, compare and contrast. But yeah, I think here in the US inparticular, it's, we have at least three levels of government that make thingscomplicated, right?

Geoffrey Thompson: We have the federaland then we have state, and then we have local. And so, you know, a localmunicipality is trying to make a decision, also can be constrained by the statelaws and can also be constrained by federal environmental laws or, you know,any other. And federal concern. So it's, it's difficult here because you havethree layers and if a, a community has a particular burning need to do whateverthey think they're doing, either building or getting an exception to a ruleit's basic.

Geoffrey Thompson: It could be impossibleto take it all the way up the chain first to the state legislature and then tosome federal agency. That definitely complicates things with our moredecentralized.  

Mike Townsend: Yeah. One thing Iwanted to ask you about, so kind of elaborating on the idea of crypto, you havemany different mechanisms that are possible because of blockchain, one of whichis, is crowdfunding territory.

Mike Townsend: So I wonder, I thinkabout this, is it, is it possible to crowdfund territory using a onlinecryptocurrency you know, community that is pre-established? And instead ofthinking about this as like most people would this is the, a book that was atbiology wrote this book called The Network State, which is, it's in line withthis thinking, which is that instead of say, Okay, let's start a new country bygo getting land, like that's the last thing you do First is you build acommunity, you establish your your guideline, your set of principles, your,your doctrine, so to speak.

Mike Townsend: You attract people tothe community. You crowdfund, and you could do this all decentralized on chain.Yeah. And if you were to do that, I wonder if it's possible in the us. To writea set of rules. I feel like property laws are the most important laws to startwith because they're literally what you need to be able to physically constructthe world that you're, you're living in.

Mike Townsend: And so I, I justwonder if there's an opportunity to like write up here are, here's our policywhen it comes to property. Here's our policy for amending this policy. Andwe're gonna carve off like a sanctuary space in rural, you know, I don't know,Nebraska somewhere. And you identify this area, right? Do you think it'spossible for the state and the federal government to allow kind of a sanctuary,you know, they have sanctuary states or sanctuary cities.

Mike Townsend: Could it be possibleto have like a s. Determined property zone from a legal perspective, Like doyou see that as being possible?  

Geoffrey Thompson: It is possible. I dothink it's possible. And, and it's more, actually, more than possible, peoplehave tried to do that. There have already been a few dows decentralizedautonomous organizations which sometimes aren't decentralized and sometimesaren't autonomous.

Geoffrey Thompson: But the whole conceptis, it's a, it's a, it permits a type of governance. That isn't possibleelsewhere. Elsewhere because it's all on chain. It's based on your ownershippercentage of the tokens, or it's based on how much you contribute to thecommunity. It's basically kind of going back to ground zero and thinking aboutwhat would how would we do things differently if we were rebuilding everythingnow using a new system of decision making, which.

Geoffrey Thompson: A blockchain. And, andso there have been projects that, that successfully raised money and acquiredproperty. And, and have kind of mapped out some of the things that youmentioned in terms of this is how we're gonna use the property and this is whatit takes to be a decision maker here. And it's all, a lot of that is tied to,you know, a token that you might own either because you purchased it or becauseit's been a reward for what you contributed to the community.

Geoffrey Thompson: We're really talkingabout a, a new way. Human governance. All of the same issues that we have intoday's system of governance still exist because it's human nature is still thesame thing. And you always have, you have free writers, you have people who saythat they want to vote but don't vote. You know, you have, after a vote istaken, you actually have to have someone that does the work.

Geoffrey Thompson: You know, it's onething just to vote, but then who's actually doing? So all of these things haveto be kind of rethought and retested, but it's happening right now. It'shappening both in the US and outside of the us. There are a number of differentreal estate development projects. That are based on funding from crypto andmaking decisions using a Dow structure.

Geoffrey Thompson: Very interesting tosee what's going on. And in some ways it kind of crosses over with likepolitical science theory and the best way to have a represented democracy.We're really looking at a different way of organizing human behavior because ofblockchain, which hasn't been possible before.

Mike Townsend: Yeah. Do you knowoffhand what those projects are, or even just generally how far along the, anyof them are that are far along?  

Geoffrey Thompson: I mean, ununfortunately, a hand of them, they got a lot of press turned out to be either.In unable to execute because of, you know, the skills of the people involved orreally just a scan.

Geoffrey Thompson: So, and then, and thenthere are a few that I think are ongoing that I can, I can certainly get youthose names that are at different stages of development. And I think our, I seepeople, I do participate in some of these dows and I see people. Really, youknow, with the best faith imaginable to, to make this new system work.

Geoffrey Thompson: But the land, youknow, the land use laws are, are the, the core and some states are refreshinglyopen minded about that. Like Wyoming, for example, has made a lot of stepstoward. Being a more crypto friendly regulatory regime. And I've heard sometalk about, you know, potentially changing the land registry system there to bebased on blockchain.

Geoffrey Thompson: Again, with anything,there are so many incumbents, but it's, those types of things are, are statelevel decisions and, and I do have hope that in some of these smaller states inparticular where there are few. Just fewer interest to defend against. I thinksome, some progress can be made. We can have a new you know, a new type ofproperty ownership structure and a new type of governance structure that goeswith it.

Mike Townsend: Yeah. Interesting. I,I hope it happens soon. I think that's the, one of the beauties of the UnitedStates is that it really is united individual states that can, you know,hopefully continue to make a lot. Independent decisions that are experimentaland then see what works, right? It's like that, that is the one major advantageto the structure.

Mike Townsend: So I'm definitely onthe side of like less centralized federal power and more on the states. Yes,obviously it's like topic by topic, but j for property, it seems like it makesthe most sense.

Geoffrey Thompson: And there's, I thinkthere's no doubt, right? I mean, this is. Kind of composed of a lot of lablittle laboratories that together create the society that we live in and thefederal structure on top of that.

Geoffrey Thompson: But yeah, thedecisions are supposed to be made nearest the people who are affected by thedecisions. And if you let people come up with their own ways of governing, yousee a lot of new ideas out there that you wouldn't necessarily think about. Andyou know, maybe that's something that you wanna adopt for your local governanceas well.

Mike Townsend: Yeah, yeah, yeah. Ithink there's, my last thought on this, on my side is I feel like there's kindof like a gaping opportunity for better, for, for pol, for a new style ofpolitical leadership that really underscores the root causes of the problem andtakes on less of the traditional. You know, hey, we're gonna fix this problemusing government, as opposed to like, No, maybe it's the way around.

Mike Townsend: Maybe the problemexists because we have too much government and that Right. It's, I'm interestedto see, cuz it can't, I mean, places like San Francisco, places like la I mean,there's some, some spots that are just, the current policies are so obviouslywrong in some way. Like you can dissect and talk about what it is, but clearly,The, we're doing something wrong, so I

Geoffrey Thompson: Yeah. . Totally agree.It, it's one of the, the oddities of the system we're in right now, that youhave, you know, somehow a correlation between someone's views on abortion. Itcorrelates to their views on what the interest rate should be in that rightbase rate. Like what , this, this, this can't be a smart way to make decisions,guys, you know, you just don't lump things like that together.

Geoffrey Thompson: So I totally agree.Like, let's look at the root causes and I. Probably, you know, 95% of peopleagree that we need to fix the root cause of homelessness or poverty or whateverit is, and what we're, we're bringing kind of these antiquated ideologicalstructures into the conversation, and it just pollutes it.

Geoffrey Thompson: Just look at thefacts. There are ways to, to solve these issues. They've been tested. Let's usewhat's been tested. Let's be scientific about it, Right? Mm-hmm. , so I'mtotally with you on that.  

Mike Townsend: Yeah. Yeah. Awesome,man. Well, I, I'm excited about what you guys are building. Do you wanna throwout any personal places you are writing or tweeting?

Mike Townsend: We'll have all thelinks for Roofstock in the show notes, but are you actively onlineanywhere?  

Geoffrey Thompson: Yes. I am at you canfind me @_gthomps on Twitter. And, and that's the, the main channel right now.Also, you know, on, on LinkedIn, bouncing around all kinds of discord channels.But that's, that's the main place that you can find me.

Mike Townsend: Sweet. Thanks Geoff.This has been a lot of fun. I appreciate your time, man.  

Geoffrey Thompson: Thank you. Likewise.

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