Howdy folks,
here's the white paper that I've been promising. Put a lot of love into this one. Hope you all learn something
:)
Title
Haus : A Blockchain Housing Solution
Abstract
The housing market is currently doing a poor job of meeting consumer needs. This is shown by the lack of affordable housing in many large cities. Focused on maximizing profits, investors are building primarily high income structures, which leads to higher average housing costs and pressure on the middle and lower class.
A Decentralized Housing network can provide secure, affordable housing for a greater percentage of people by aligning the incentives of investors and consumers, subsidizing the cost of key production steps through open source information exchange, and by utilizing unused, or underused spaces.
A Blockchain ecosystem will allow for the tokenization of physical structures, giving individuals, who cannot afford their own house, the ability to co-own investment properties while incentivizing various user behaviors that are prosocial for the overall network and giving owners more control over their assets.
The Haus Network will be a holistic system that includes all aspects of the home building process, including design, manufacturing, distribution, assembly, maintenance and marketing/sales.
Introduction
The majority of new housing units fall into the middle to high income bracket. These are being built in areas of high demand, where individuals from all income brackets are trying to move. These structures are being produced because they offer the highest return on investment.
As high income individuals move into the newly produced structures, the next highest income bracket individuals will take the remaining structures, moving down income levels until we reach the lower class. As average housing prices increase (due to the production of only high income properties) individuals in the bottom of the lower class are often forced to relocate. This is commonly known as gentrification and is seen in many cities around the world.
The main problem with the current system is a gross misalignment of the investor interest and the overall requirements of the market. As investors continue to focus on profits, we end up with housing options that are only viable for a smaller and smaller percent of consumers.
In order to solve this we need to increase the percentage of consumers that are also investors. With a single house costing upwards of $100,000 there is a huge barrier to entry. With tokenization, structures can be co-owned, completely eliminating the barrier to entry. Additionally, a decentralized market place can remove key costs to traditional home construction such as design/engineering, inefficiencies of traditional stick built construction, and costly land use.
This will allow consumers more influence over the structures produced and should create structures that are better aligned with consumer demand.
Market
The Global Real Estate Market is worth approximately $4 Trillion USD. With more than a million new houses being built every year in the United States alone (Census.gov) and a median home price of just under $200,000 dollars, there is a large market opportunity.
With the current housing market as it is, more and more individuals are being forced to rent instead of own, leading to a weakening of the middle class. The excessive production of high income properties has led to a steady increase of housing prices, causing many individuals relocate to more affordable areas. While it may not be advisable to take on the current system head on, offering a complementary alternative that better suits the needs of individual consumers could relieve many of the pressures faced by modern consumers while not competing directly with traditional real estate investors.
Solution
The main issue with the housing market is the discrepancy between the interests of the investors and the consumers. Investors want to make as much money as possible, consumers want the best product/market fit.
Rather than forcing investors to build different products, we can simply change the demographic of the investors. This can be done by decreasing the barrier to entry and the average cost of goods sold. This will allow a much larger percentage of the consumer group to enter into the “owner/investor” group.
This should cause overall group behavior to shift in favor of the wants/needs of the consumers.
We are used to a market with two main housing options: rent a house/apartment, or use a mortgage to purchase an asset and gain equity over time.
Due to the ever increasing price of houses, the barrier to entry for home ownership is growing larger and larger every year. This causes more people to be forced to rent their accommodations indefinitely, never giving them the chance to start building assets, one of the main components of the middle class.
If you can afford a home, you are most likely required to spend a significant amount of money on a down payment, and then will slowly pay off debt while accruing more and more assets. This has shown to be a viable investment strategy; however, the recent housing crisis has shown us that even this stable investment has its own risks.
Haus offers a different solution. With affordable price points, many individuals will have the ability to purchase a House outright, instantaneously giving them an income producing asset without the need for any debt.
Because of the low price point, Haus’s may not be available for traditional mortgages. In order to provide a solution, all structures on the Haus network will have the option to be crowdfunded. This will open up home ownership to a much larger market than with existing options. Because Haus’s are mobile (can be deployed/removed with a crane) default on payment isn’t really an issue because the structures can easily be reclaimed and resold.
Metcalfe's law tells us that the value of a network is directly related to the number of people in said network. By offering a critical service at a previously untapped price point, working directly with the consumer to provide a near perfect product market fit, and by creating an integrated system where owners are investors and end users, the Haus network has the potential to experience immense organic growth.
This could lead to the “new middle class” of the Haus network reinvesting their dividends (from owning assets) and savings (from no longer having to pay expensive rents) back into the network, further expanding the network effect and allowing other people to enter the new middle class.
The Haus Network
The goal of the Haus network is to complete a sustainable ecosystem that creates structures from idea to installation. All tasks will be self assigned, allowing people from all around the world to interact with the network and earn income. Because each role will be available to every citizen of Earth, the surplus of potential labor should keep costs down.
In order to have a smoothly running network, each task will need to be adequately incentivized. This can occur through fee variability and social feedback. With a large enough network and proper incentivization, the Haus network should be able to run on it’s own.
User Stories
Sponsor
Sponsors will be individuals desiring to own and deploy a Haus. They will have the choice to fund the structure themselves or run a public or private crowdfunding campaign. Everyone who takes part in the campaign will be a part owner of said Haus, but the sponsor will have final say over design, deployment location and how the structure is used.
Designer
Designers can submit designs to the Haus marketplace. If their design is approved by an inspector (users can pay inspectors to review a design, or they can be voted on by the community for review), it will go live. From that point onwards, any individual that chooses said design will pay a fee for its use.
Manufacturer
These will be groups / organizations with existing infrastructure and experience. In order to become a manufacturer you will need to go through an extensive verification process. After verification, you can begin taking orders for Haus’s. Each manufacturer will have their own territory, with more or less manufacturing nodes being created based on demand. As soon as an order is placed the manufacturer will receive a smart contract that will disperse funds over time.
Distributor
These will be independent contractors (or services with whom Haus has negotiated contracts) that can offer flat rate delivery rates for Haus products. With high network volume, Haus will be able to secure better shipping rates and can pass that savings on to the end user.
Assembler
This role will also require extensive verification in order to ensure quality. Once crews have been verified they can have a profile on the Haus network and will receive public feedback from other users. When creating a Haus, users will have the ability to choose from various Assemblers to construct their Haus on site. Assemblers will earn a fixed commission based on the type of Haus, with the potential for increase based on hardship / on-site complications.
Maintenance
This role may or may not be necessary, but would be the “bottom-tier” of verified roles. Maintenance individuals would be responsible for periodic, automated upkeep of Haus’s to make sure they remain functioning properly and stay in good shape.
Land Owner
This is one of the most important positions in the Haus network and will be incentivized as such. The largest problem with most alternative housing solutions is finding a place to put them. We can help alleviate this by having small, customizable structures, but still need SOME space to put them. The landowner category will allow users to add their extra / unused land to the haus network. Once a plot is added it will go live on the haus network and users can claim “lots” for the deployment of their haus’s. Additionally, land owners will have the ability to verify their plots, increasing the likelihood that someone claims their spot for deployment.
Consumer
The consumer role will be filled by most of the users of the Haus network. Whether you own a Haus, own 10 of them, or just want a place to stay, anyone will be able to access the Haus network through the Haus token. Redeemable for stay in any verified Haus structure, Haus tokens will offer world wide access to a network of beautiful, well designed, and familiar structures.
Inspector
The inspector role will be key to the Haus network. Similar to a witness in a DPOS blockchain, inspectors will be relied upon to ensure quality standards. In order to achieve this they will earn a fixed fee for each item inspected. Inspectors will themselves be controlled by the user base. If they attempt to take advantage of their power, they will have their status suspended and revoked.
Potential Use Cases
Haus’s can be deployed almost anywhere. With a footprint of ~10x10 and larger and with no need for a fixed foundation, Haus’s can be combined in nearly infinite combinations.
Some potential use cases are:
Compliment to single family homes
Individuals with single family homes can add occupancy by deployed 1 or more Haus’s. Additionally, these can become investment properties generating revenue.
Stand Alone Structure
For people with their own land, Haus’s can be deployed as a stand alone, existing completely off grid (with some models)
Micro Communities
The coolest iteration (in my opinion) is the idea of Micro Communities. Individuals with larger areas of land (empty lots, parking lots, etc) can create micro Communities with multiple Haus structures. In addition to many Haus’s, larger communal buildings can be deployed (commercial kitchen, public bath houses, cafes, etc). These can be highly customizable and offer affordable, on demand housing in areas that do not yet demand large scale development.
Why Blockchain
Why run the Haus network on a Blockchain? It’s simple … decentralization and smart contracts. The main issues with housing right now are : investor interests are not aligned with consumers and hidden fees in building houses (architects, engineers, zoning) add up quickly. By allowing anyone to invest at any amount, all users can become investors. This should cause the products being produced to reflect more of the consumers interest. Creating an open source economy and offering fixed rate fees will increase competition for various roles while decreasing the barrier to entry. This should result in a marketplace with a surplus of designs, allowing the consumer to choose which ones are best.
Dispersal of Tokens
The key to any network is the successful acquisition of users. In this case, the Haus network will hold both an airdrop alongside a private and a public ICO. The airdrop will distribute Haus tokens that can be used for any purpose such as creating a Haus, buying a design or renting a structure. The private ICO will allow a select group of individuals to crowd fund/ purchase the first Haus’s to be deployed (after a location has been secured). After the first units are built and deployed and the network has been proven to function, a public ICO will be held, allowing individuals to purchase Haus tokens. The Haus network will go live shortly after the public ICO, allowing users to interact on the Haus network and create new structures by themselves.
Tokens
The Haus network will have two main types of tokens. Haus coins will be used for the majority of tasks on the Haus network such as transferring value between Haus and Btc/fiat, funding new projects, paying various service providers (landowners, manufacturers, etc) and buying H1 coins. H1 coins will be independent tokens, created for each Haus that is constructed (H1, H2, H3 … etc). These will be used to control the “usership” of the structure on a day to day basis (each H1 token is = to one days use of the structure). These are transferable and sold on an open market. If the sponsor wants to rent their Haus in a short/long term manner, they can sell H1 tokens and let users rent their Haus in a fashion similar to Airbnb. If the owner of the haus just wants to use the structure, the H1 tokens will remain in their possession and they will not be forced to sublet their unit.
Because the H1 tokens will be tied to the usage of a physical asset, they will intrinsically hold value (people need a place to stay [always], one H1 token offers you a place to stay for one day, whatever people value that at is the value of one h1 token). Because H1 tokens can only be bought using Haus tokens, Haus tokens then automatically gain value. This should put positive price pressure on the currency.
Hauses
Due to its decentralized/ open source nature, the Haus network should allow for incredible innovation. In order to create a Haus, users must either pick from a pre-existing design, or create their own. After designs are inspected for their structural viability and integrity (can it successfully and safely be built), they will be added to the Haus network and be available for sale. Using basic 3d modeling (probably sketchup and autocad), individuals from all around the world can submit designs. Additionally, by using simple fixed design constraints, you can also create a secondary market for interior/exterior modules. If all houses have to be 10x10 cubes, you can then design interior/exterior modules that would fit every Haus.
Due to the ease of entry, many individuals can submit designs. This should create a humongous amount of potential designs, which over time will lead to a handful of market selected, “excellent” options. Combining this with the ability to create modular interior/exterior modules, users should have the ability to create unique and customizable Haus’s using preexisting designs.
Legal
Zoning and building codes are humongous thorn in the side of existing developers. In order to bypass this, size constraints can be imposed on Haus structures. In the majority of municipalities, structures that are 10x10 in size or less can be built and installed without a permit. These are defined as sheds and do not require permitting/ inspection. Technically they are not for living purposes, but because of the modular nature of the structures, a Haus can be deployed with nothing inside of it, and after the risk of potential inspection has decreased, the owner can outfit it as they see fit.
For larger scale deployments it will most likely be necessary to work with local jurisdictions to get approval for the deployment of multiple structures and for large communal units.
Communal units will also be modular structures, but designed to serve the needs of the community instead of a single individual. Haus users will have the ability to create micro communities, with each member owning their own Haus, and then sharing ownership and responsibility of communal units. Again, using open source design, larger communal units can be produced to provide things such as communal kitchens, entertainment areas, large scale public baths, etc.
As long as people can design it, people want to buy it, and others can build it, it can exist on the Haus network.
Roadmap
Q1 2018 : Inception of The Haus Idea
Q2 : Brainstorming
Q3 : Design / Iteration of Haus Structures … First Deployment
Q4 : Haus goes live, users can buy and deploy Haus structures (US and Canada to start)
Q1 2019 : Launch of Haus ICO
Q3 2019 : Launch of Haus Network
Q1-4 2020 : Expansion of Haus Network into other Countries
Conclusion
The housing market is faced with major pressures, mainly caused by the discrepancies in investors interest versus that of consumers. This is causing the market to be flooded with high income properties, increasing average home prices and causing rapid gentrification of high demand areas. Rather than try and change how homes are built, the team at Haus is focused on creating a different type of housing solution altogether.
Completely avoiding traditional mortgages, the Haus network will be an inclusive system that allows users to design, manufacture, finance and deploy structures all using the Haus token. Designed for seamless interaction between parties, Haus will create structures that are desirable and affordable by all.
Is this your next Haus?