Introduction

As a proud member of Generation Z, I find myself at the exciting cusp of adulthood. At 24 years old, I've recently embarked on my career journey after graduating from college. I consider myself incredibly fortunate to have emerged from my education without the burden of student debt. However, I am acutely aware that not all of my friends share the same privilege. Many in our generation are now contemplating the idea of purchasing their first home—a milestone that aligns with the age when our parents took that significant step into homeownership. It feels like the logical next phase of adulthood.

I am thrilled to be working with Home Construction Collective, an organization that enables me to be part of the solution to the ongoing housing shortage, one of the most pressing challenges of our generation. COLLECTIVE operates as a fractionalized equity platform, allowing investors to participate in the construction of new single-family homes and enjoy profitable returns. It is an honor to be one of the newest members of this team, dedicated to solving one of the most critical problems for Generation Z.

Gen Z’s biggest challenges: A Netflix Shortage

Generation Z might not be the “greatest generation”, but we could be forgiven for feeling like we’ve inherited the greatest number of issues to solve. Among the most significant: Being logged out of Netflix while watching our favorite show, of course! Past estimates show that the US needs 4-5 million more Netflix Accounts to be available to meet demand. Crazy right? Why doesn't Netflix just issue more accounts to meet demand? Why isn't the Netflix account shortage issue more of a national priority?

Not surprisingly, there's no Netflix shortage. But there is a living room shortage, a bedroom shortage, and a housing shortage. According to Freddie Mac's Chief Economist, Sam Khater, in 2018 there was a shortage of 2.5 million homes which grew to 3.8 million by 2021 and is now closer to 6.5 million today. Factors contributing to the shortage include limited construction labor, restrictive zoning regulations, scarcity of available land, and the lack of capital for homebuilders, all of which have contributed to decades of severe underbuilding, especially in the entry-level price range.

Our experience

Generation Z, encompassing individuals born between 1997 and 2012, holds the distinction of being the third largest generation in the United States. As the oldest members of Gen Z turn 26 this year, many of us are turning our attention towards establishing our careers, eliminating debt, and purchasing our first homes. We follow in the footsteps of the millennial generation, who, despite their ongoing struggles to afford basic necessities, have yet to experience the same level of affordability enjoyed by the previous generation, Generation X. Owning an affordable home used to be a common aspiration for Generation X and the Baby Boomers when housing shortages were much less of a concern.

In their 20s, Baby Boomers were able to purchase homes while working one job, owning two cars, and indulging in regular trips to the drive-in theater. However, as demand has risen and supply has dwindled over time, home prices have soared. Consider this: in 1967, when my stepdad was born, the average home price stood at $22,700. Today, that figure has skyrocketed to an average of $436,800. One can only wonder what prices future generations will face. Interestingly, while over 11.7 million homes were built in the 1960s, the number decreased to a mere 7 million in the 2010s. Looking at this comparison between the 1960s and the 2010s, one would expect the United States to have learned from the past and adequately prepared for the future. Unfortunately, a glance at housing prices reveals that we have not learned enough, if anything at all.

Let's revisit the analogy of the Netflix shortage. When faced with a shortage of Netflix accounts, the solution is straightforward: create more accounts to meet the demand. So why aren't we applying the same principle to housing? With a housing shortage in the United States and prices continuing to rise, shouldn't our focus be on building more homes to address the evident supply gap?

Given the numerous factors contributing to the lack of housing, it becomes clear that there is a scarcity of available capital to construct the necessary homes needed to meet the demand. Construction financing relies heavily on a small number of centralized institutions that hold the key to financing the homes that Generation Z aspires to own. To address this challenge, we must consider unique approaches such as fractionalized investing in new home construction, providing investors with competitive yields on their investments. By making it easier for homebuilders to obtain the necessary financing to meet demand, we can facilitate the construction of more homes. It is high time we remove the barriers to community development that have predominantly been entrusted to local banks.

Home Construction Collective is committed to reducing barriers to entry for new investors, making capital more accessible to homebuilders while also ensuring accountability to investors. We urgently need innovative solutions to this long-standing problem, but it is equally crucial that these solutions prove to be profitable investments. COLLECTIVE offers accredited investors a unique opportunity to participate in the real estate market and invest in the early stages of home construction. Through the COLLECTIVE Platform, investors pool their capital to fund the construction of new homes, with the aim of meeting the growing housing needs and reaping profits when the homes are sold.

The housing shortage in the United States has reached critical levels, posing significant challenges for Generation Z's aspirations of homeownership. Innovative platforms like COLLECTIVE offer practical solutions to these substantial problems. By embracing the principles of collaboration, affordability, and profitability, Generation Z can pave its own path towards homeownership while contributing to a more equitable housing landscape. Together, let's build more homes, tackle this generational crisis, and profit from the solution with Home Construction Collective!