Strong neighborhoods are essential to vibrant cities. As the median housing price in many cities reaches new highs each year (Los Angeles just crossed $600,000), what will happen when more and more people cannot afford the down payment for a home in the vibrant communities they helped create? And why are residents forced into an all or nothing choice between renting and property ownership?
Housing feels broken. And as we spent more time thinking through the decentralization movement, we began to see the opportunity in empowering communities to participate in the real estate asset class in a broader way. Decentralization is not just about changing trends in ownership, but also about the importance of building community.
After months of searching for the right model, we’re excited to announce our investment in Nico.
Nico is building a new model for investing in neighborhoods that enables local residents and community members to build wealth by buying fractional equity in local real estate, starting at $100. As the average apartment down payment exceeds $100K in many metro areas and the real estate asset class consistently grows, we think now is the perfect time to increase financial inclusion by enabling access to the asset class for a much larger portion of the community.
Here’s how it works: Nico purchases a basket of rental properties in a given neighborhood – the first being Echo Park in the City of Los Angeles – and uses the investment from residents and community members to grow the holdings of this new form of a decentralized, hyper-local Real Estate Investment Trust. Although the initial focus will be on real estate, we are excited about all of the other ways that Nico can democratize ownership for other parts of local neighborhood economies in the future (and build additional enterprise value as a result).
We met Max and John in the summer of 2018 when they were first developing the idea that became Nico, and were immediately intrigued by the possibilities. During one conversation, we started talking about the model of the Green Bay Packers, the only professional team we know of that is owned by the local community, and all of the outcomes that are enabled thanks to its unique ownership model (i.e. the longest sellout streak of all time, a season ticket waiting list that’s bigger than the entire city population, one of the league’s most valuable franchises despite a population of 105K). Max and John explained their vision for how broadly held local ownership can drive unique and positive outcomes for neighborhoods (and the people who live there) and we immediately leaned in.
We are excited to partner with Max, John, the rest of the Nico team, our co-investors including Sidewalk Labs, and the broader community that will make up Nico.