A GRAND STRATEGY FOR HOUSING
MAKING THE AMERICAN DREAM GREAT AGAIN
Transforming the housing ecosystem isn’t just a challenge—it’s a full-blown Herculean labor, minus the mythical rewards. Back in 2017, at a Lean Startup Conference, I encountered Eric Ries, whose Lean Startup Company had been a trusted advisor in my innovation work within the national security sector. When I told him I was leaving the National Geospatial-Intelligence Agency for Freddie Mac to lead the New Concepts group in the newly minted innovation lab, he didn’t miss a beat before asking, “Are you a masochist?!”
Looking back, I suppose I am—an Innovation Masochist. After seven years in housing finance, I can confidently say that navigating the labyrinth of federal acquisition regulations in the defense sector now feels like a leisurely stroll through the park. But despite the relentless complexity of driving change in housing finance, my belief has only strengthened: transforming this industry isn’t just a lofty ambition—it’s a national imperative. It’s about economic security, upward mobility, and the survival of the very ethos that has long defined the American Dream.
This post wouldn’t be complete without the insights and contributions of my fellow Housing Innovation Enthusiasts, Stacie Whisonant, Founder of Pay Your Tuition, and Gene Dibble, Managing Partner at Uncommon Impact. Both share my unwavering conviction that the housing industry must transform and that America’s technology sector and entrepreneurs should be the driving forces behind it.
Executive Summary: A Grand Strategy for Housing Innovation
America's housing system stands at a critical crossroads, and a new paradigm for housing is needed. This crisis demands more than incremental solutions; it requires a comprehensive "Grand Strategy" approach that reimagines housing for the 21st century. Historically, U.S. housing finance has evolved through crisis-driven innovation—the 30-year mortgage stabilized home ownership after the Great Depression, and mortgage-backed securities reshaped lending after the Savings & Loan collapse. Now, we must proactively drive the next transformation.
The proposed Grand Strategy framework integrates three core components:
I. Objectives (Ends) The vision centers on creating an accessible, sustainable, and economically productive housing market through expanding homeownership access, eliminating systemic inefficiencies, and leveraging emerging technologies. The strategy aims to strengthen housing's role as an economic engine while supporting sustainable models and diversifying capital sources beyond traditional institutional investors, including retail investors.
II. Strategic Pathways (Ways) The transformation focuses on four revolutionary areas:
1. Modernizing Housing Finance: Implementing decentralized property registries, AI/Blockchain-powered origination, and tokenized mortgage-backed securities to reduce costs and increase efficiency.
2. Unlocking New Ownership Models: Introducing fractional homeownership, DeFi solutions, and innovative mortgage products that incentivize positive outcomes.
3. Revolutionizing Construction: Leveraging AI and 3D printing for rapid construction, incorporating smart energy systems and advanced materials.
4. Reimagining Housing Models: Developing shared living spaces and promoting long-term room rentals to optimize housing utilization.
III. Implementation Resources (Means) The strategy calls for establishing a Housing Innovation Unit (HIU)—a public-private partnership modeled after the Defense Innovation Unit— and an Office of Strategic Capital for Housing to drive transformation through:
Market-Based Innovation: Leveraging public and private capital through an OSC for Housing
Policy Reform: Creating regulatory sandboxes and incentivizing housing tech startups
Technological Infrastructure: Developing national platforms for digital transactions
Workforce Development: Implementing comprehensive training programs in emerging technologies
This transformation represents America's "Sputnik moment" for housing innovation, requiring the same coordinated national effort that revolutionized space exploration. Success demands a whole-of-government and whole-of-private sector approach, uniting policymakers, technologists, investors, and entrepreneurs to build a new, tech-driven housing economy that ensures housing remains a cornerstone of American economic security and social stability.
I. THE CRISIS AT HAND: A BROKEN HOUSING SYSTEM
The American housing system, once a cornerstone of economic mobility and national stability, is collapsing under inefficiency, outdated financial structures, and regulatory constraints. Homeownership—the foundation of middle-class security—is now slipping out of reach for Millennials and Gen Z, who face the most unaffordable housing market in history.
The median home price surged to $419,200 in the fourth quarter, up from $257,400 at the peak of the 2008 crisis.[1] This is not just market fluctuation—it’s a systemic failure that, if left unaddressed, will erode economic opportunity, stagnate growth, and challenge America’s global competitiveness.
A Commons in Crisis: Housing as a National Challenge
Housing is not just a private asset but a cornerstone of America’s economic stability. However, misaligned incentives, restrictive zoning laws, and financial barriers have distorted supply and demand, making affordability increasingly elusive for the middle class. The market is driven by short-term financial gains rather than long-term stability, with little leadership or a unifying vision to guide sustainable growth. No coordinated effort exists to align policies, investments, and innovation toward a resilient housing system.
Despite its critical role in the economy, the U.S. lacks a coherent, forward-looking strategy to ensure housing remains sustainable, accessible, and adaptable to future challenges. This is more than a housing crisis—it is a national economic security imperative that demands a whole-of-government and whole-of-private sector approach to reform and modernize.
What is Grand Strategy?
The concept of grand strategy has roots in military strategy and statecraft. It is generally understood as a state's comprehensive plan for achieving its long-term national interests by coordinating and utilizing various forms of power, including military, diplomatic, economic, and informational means. It involves integrating these instruments to create a cohesive approach that extends beyond immediate military victories (short-term) to secure lasting peace and prosperity (long-term). [2] As a vital economic pillar, housing demands a grand strategy approach to align, coordinate, and utilize public and private sector efforts toward a cohesive, future-proof vision and strategy.
Why Housing Needs a Grand Strategy
The housing industry of the past cannot be the housing industry of the future if the goal is a resilient, vibrant, and adaptive market that drives economic growth. Many business models that constitute the current housing industry emerged after the decline of Savings and Loans Banks, while others developed in response to the 2008 crisis. However, the world is changing rapidly, and many of these models are poorly equipped to ensure housing accessibility, liquidity, and resilience in the second quarter of the 21st century. The accelerating pace of technological advancements, demographic changes, economic shifts, and environmental challenges calls for a comprehensive housing industry transformation. Current stakeholders cannot lead this change independently; they are too heavily invested in the existing paradigm to initiate a new one. Their frame of reference is rooted in the past that brought them success, not the emerging realities that will shape the future. A comprehensive transformation of the housing industry necessitates a coordinated national strategy of incentives, policies, and innovation ecosystems to unlock the next era of housing finance, ownership, and construction. The American entrepreneurial and technology sectors, which have consistently been key drivers of American economic growth and prosperity, should be at the core of this transformation.
Housing Finance as a Story of Innovation and Paradigm Shifts
The history of housing finance is characterized by ongoing innovation in business models. Each major paradigm shift within the system has been driven by technological advancements, financial engineering, and the necessity to recover from crises. Each paradigm concludes because the fundamental assumptions that supported the industry did not hold true under evolving macro conditions. Over the past century, American housing has experienced three paradigm shifts, each lasting approximately 40 to 50 years
The 5-Year ARM Model (Pre-Great Depression): Before the Great Depression, home financing was primarily short-term, requiring refinancing every few years. The result? Mass foreclosures when borrowers couldn’t refinance during economic downturns.
The 30-Year Fixed Mortgage and the Savings and Loan System (Post-Great Depression): The 30-year mortgage was introduced to stabilize homeownership by making payments predictable and accessible, creating stability in the system. Along with the VA loan, the 30-year mortgage stimulated unprecedented growth in Homeownership.
The Rise of Mortgage-Backed Securities (Post-Savings and Loans Crisis): The creation of Mortgage-Backed Securities (MBS) in the 1970s enabled capital markets to fund housing at scale depository institutions, providing an alternative to the failed Savings and Loans. The advent of computing, spreadsheets, and advanced financial modeling enabled this transformation.
The question is, what will the next paradigm look like, and how will it come about? Is it a concrete national effort or a result of a crisis driven by a focus on short-term gains instead of long-term sustainability?
History shows us that we will only discover the next sustainable model for housing finance through experimentation and paradigm shifts. To keep the American Dream alive and to prevent a crisis from prompting a painful transformation, we must embrace the next wave of financial and technological innovation to modernize housing and ensure long-term affordability.
II. A GRAND STRATEGY FOR HOUSING TRANSFORMATION: THE “SPUTNIK MOMENT” FOR HOUSING INNOVATION
A successful grand strategy for housing must integrate:
Ends (Objectives): Defining the vision for an accessible, sustainable, and economically productive housing market.
Ways (Courses of Action): The strategic pathways to achieve that vision.
Means (Resources and Infrastructure): The financial, technological, and policy instruments needed for execution.
Ends (Objectives): The Future Vision of Housing
A reimagined housing system must:
Expand Homeownership Access: Homeownership must remain a viable path to wealth creation for future generations.
Eliminate Systemic Inefficiencies: Housing finance, construction, and transactions must be cheaper, faster, and more efficient. Financing a home should be as fast as financing a car.
Leverage Emerging Technologies: AI, blockchain, and next-gen financial tools must modernize housing finance and construction.
Strengthen Housing’s Role as an Economic Engine: Housing must drive economic stability and growth, not financial crises.
Support Sustainable and Adaptive Housing Models: Future housing must be resilient, climate-conscious, and adaptable to an era of accelerating technological change.
Expand sources of capital: Capital sources must diversify beyond large institutional investors to also include retail investors. Regular Americans should have access to the steady yields offered by the MBS as they do to Treasury bonds.
Ways (Courses of Action): Achieving Housing Innovation
To accomplish these objectives, the strategy must focus on four transformative areas:
Modernizing Housing Finance Through AI & Blockchain
Decentralized Property Registries: Eliminate outdated, expensive title insurance through blockchain-based land records.
AI-Powered Underwriting: Reduce mortgage costs and origination delays by replacing manual verification with automated AI models.
Smart Contract-Enabled Origination: Digitize and automate real estate financing, making home purchases seamless and fraud-resistant.
Tokenized Mortgage-Backed Securities (MBS): Fractional homeownership and AI-driven investment models could provide liquidity and open the market to retail investors, providing new avenues for building wealth.
Unlocking New Ownership and Financing Models
Fractional Homeownership & Rent-to-Own: Break down financial barriers to homeownership with blockchain-based property shares
Decentralized Finance (DeFi) for Housing: Lower costs by removing intermediaries from mortgage lending and investment.
Novel Mortgage Products: Develop innovative mortgage products that incentivize positive financial behavior among borrowers and support new ownership models
Revolutionizing Construction with AI & 3D Printing
3D-Printed Homes: Site build or manufactured homes in days, not months, cutting costs and labor shortages.
Smart Energy & Climate-Resilient Homes: AI-driven designs tailor housing to regional climate conditions.
Self-Healing & Ultra-Light Materials: Enhance durability and efficiency through advanced materials.
Re-imaging Housing Models
Shared Living Spaces: Ownership and community models with shared living spaces.
Promote Long-term Room Rental: Promote rental of excess capacity in American Homes to lower the cost of renting and lower DTI for owners.
Breaking Down Regulatory Barriers
End Restrictive Zoning Laws: Enable denser, mixed-use housing and innovative development models.
Incentivize Housing Tech Startups: Tax credits, federal grants, and government-sponsored competitions should drive investment in housing innovation. Our space programs were reinvigorated through a series of government-sponsored challenges and competitions that encouraged Blue Origin and Space X to innovate.
Nationwide Digital Closings: For speed and security, allow fully digital, blockchain-based real estate transactions.
3. Means (Resources and Infrastructure for Execution)
Establishing a Housing Innovation Unit (HIU) – A Mission-Driven Approach
To drive large-scale housing transformation, the U.S. must establish a Housing Innovation Unit (HIU)—a public-private partnership modeled after the Defense Innovation Unit (DIU) and aligned with the principles of the Department of Defense Office of Strategic Capital (OSC) and Hacking for Defense (H4D). [3] 4] [5] This unit would operate as a housing technology accelerator, rapidly integrating venture capital, federal resources, and private-sector expertise to modernize housing finance, ownership, and construction.
1. Market-Based Innovation (Economic Means)
The HIU would be led by a strategic board comprising FHFA, HUD, Treasury, SEC, and the White House AI & Crypto Czars, ensuring cross-agency alignment and capital efficiency. Its mission would be to:
Leverage Public and Private Capital: Working with OSC for Housing to fund high-impact housing technology ventures, creating a pipeline of dual-use applications for both public and private markets. An OSC for Housing could be based out of FHFA, which could manage a small percentage of funds obtained from Freddie Mac and Fannie Mae’s combined $25B plus yearly profits.
Accelerate Housing Startups: Establishing "Hacking for Housing" (H4H) as an industry counterpart to H4D, connecting university-led innovation with government-backed challenges to develop next-gen housing solutions.
Attract and Deploy Venture Capital: Partnering with top-tier venture capitalists and private equity to fund AI-driven mortgage models, blockchain-based property registries, and alternative ownership platforms.
Establish Housing Innovation Corridors: Creating regional test hubs modeled after the National Security Innovation Base to deploy, refine, and scale advanced housing technologies.
2. Policy and Governance (Regulatory Means)
Regulatory Sandboxes for Emerging Models: Just as DIU streamlines acquisition for defense tech, HIU will provide a controlled environment for testing AI-driven underwriting, digital mortgage origination, tokenized MBS, and decentralized finance (DeFi) for homeownership.
Policy Acceleration and Agile Housing Reform: Working with FHFA, HUD, and Treasury to remove regulatory bottlenecks and ensure the rapid adoption of digital property transactions, zoning reform, and innovative financing models.
3. Technological Infrastructure (Technology Means)
National AI-Powered Housing Data Platform: A real-time intelligence system for property valuation, risk modeling, and equitable housing market access.
A Digital Land Registry Platform: Blockchain-based title and property record system eliminating fraud, inefficiencies, and closing costs.
Strategic Investment in Advanced Materials & Construction: Funding innovations in self-healing materials, 3D-printed housing, and robotic-assisted building technologies to drive affordability and sustainability.
4. Talent and Workforce Development (Social & Educational Means)
"Hacking for Housing" (H4H): Modeled after Hacking for Defense (H4D), this initiative would embed university-led research and private-sector collaboration into housing policy, technology, and financing innovation.
Reskilling Programs for AI-driven home Construction: Preparing the workforce for automation in mortgage processing, blockchain-based real estate transactions, and AI-enhanced property assessments.
By combining DIU’s rapid innovation model, OSC’s strategic capital deployment, and H4D’s problem-solving ecosystem, the HIU would create a national framework for housing transformation—turning today’s challenges into an opportunity to build a faster, smarter, and more resilient housing system.
Integration and Cohesion: Aligning Ends, Ways, and Means
A truly transformative housing strategy requires tight integration between vision (Ends), execution (Ways), and infrastructure (Means). The Housing Innovation Unit (HIU) will serve as the linchpin, ensuring public-private collaboration translates into tangible results. A cohesive strategy ensures that:
Next-generation financing models (Ways) are accelerated through venture-backed housing fintechs and regulatory sandboxes (Means), expanding homeownership access (Ends).
AI and blockchain-powered housing finance (Ways) align with federal capital deployment through the Office of Strategic Capital and HIU partnerships (Means), creating a more efficient, transparent, and resilient housing market (Ends).
Advanced home construction technologies (Ways), such as 3D printing and robotics, are deployed in Housing Innovation Corridors (Means) to drive affordability, sustainability, and rapid housing production (Ends).
Talent and workforce development in AI-driven housing solutions (Ways) is integrated into national reskilling programs (Means), ensuring a highly skilled workforce for the future of housing innovation (Ends).
III. CONCLUSION: A CALL TO ACTION
If America is to stay an economic powerhouse, homeownership needs to be accessible and sustainable. This is not just a financial issue—it signifies a national economic security challenge and a generational opportunity. The current system is too rooted in outdated models to innovate independently. Policymakers, technologists, investors, and visionary entrepreneurs must seize this moment to build a new, tech-driven housing economy. Now is the time to redefine the future of housing.
[1] Federal Reserve Bank of St. Louis. Median Sales Price of Houses Sold in the United States. Retrieved from https://fred.stlouisfed.org/series/MSPUS.
[2] Strategy Bridge. Defining Grand Strategy. August 17, 2020. Available at: https://thestrategybridge.org/the-bridge/2020/8/17/defining-grand-strategy.
[3] https://www.diu.mil/
[4] https://www.cto.mil/osc/
[5] https://www.h4d.us/
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