Feb 6, 2023 · 20m · a16z
Easing the Housing Crisis by Building Better Tools
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
At the a16z American Dynamism Summit, Divvy Homes CEO Adena Hefets discusses how modern tech-enabled financial tools and ethical rent-to-own models can solve America's housing affordability crisis for non-traditional wage earners.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 2.9 Guest teaching 4.9 Guest disagreement 1.1 The host pushing back 0.9
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 14:01 Rejection of premise regarding regulatory responsibility
Adena explicitly rejects the framing that regulators are responsible for reaching out to tech companies, insisting that the onus is on startups to open dialogue.
Hardest push from the host ▶ 9:50 Host challenges guest on predatory history of rent-to-own modelsKatherine presses Adena directly on how financial inclusion startups navigate negative media perception and avoid repeating predatory historical models.
Biggest teaching moment ▶ 15:55 Deep dive into housing cycle mechanics and price trajectoriesAdena delivers detailed macroeconomic breakdown showing how interest rate increases impact consumer demand and comparing current price declines to the 2009–2012 cycle lag.
The host holds their own ▶ 18:47 Host steers conversation from grim forecast toward optimistic trendsFollowing Adena's bleak housing market forecast, Katherine steps in to reframe the narrative toward positive long-term migration and economic trends.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| American Dynamism Opening Branding and Sizzle Reel | 1 | 1 | 0 | 0 | The segment opens with complimentary introductory remarks and personal family history. Both participants maintain an agreeable, warm dynamic with no technical probing or disagreement. | |
| The Housing Affordability Crisis and Legacy Mortgages | 2 | 6 | 1 | 0 | Katherine asks a general setup question regarding mortgage access, enabling Adena to educate the audience on legacy 1940s underwriting rules and current affordability data. | |
| Divvy Homes Rent-to-Own Model Explained | 2 | 5 | 0 | 0 | Adena details the operational mechanics of Divvy's rent-to-own equity structure and its origins. The host listens as the guest explains the business model in detail. | |
| Targeting Middle America and Customer Demographics | 3 | 4 | 0 | 0 | Katherine asks about geographical focus in non-coastal markets, allowing Adena to share market expansion strategy and customer demographic statistics. | |
| Reinventing Rent-to-Own with Ethical Standards | 4 | 6 | 2 | 3 | Katherine addresses the historical stigma of predatory rent-to-own operations and asks how Divvy avoids those pitfalls. Adena explains past industry practices and highlights self-imposed price appreciation caps. | |
| Collaborating with Washington and Regulators | 4 | 5 | 3 | 1 | When Katherine asks how regulators should better work with startups, Adena politely pushes back on the premise, arguing that startups themselves bear the responsibility to initiate engagement. | |
| Macroeconomic Housing Market Predictions | 4 | 7 | 2 | 2 | Adena delivers an extensive macroeconomic forecast detailing home price drops and comparisons to 2008. Katherine interjects to steer the mood away from the somber prediction toward positive long-term trends. |
Statements from this episode (14)
Hefets: 80% of Americans cannot afford a home at current mortgage rates
“Based off of our 7.15% average 30 year fixed rate mortgage and then based off of an average home price of 400,000 dollars, 400,000 dollars, which is the average home price in, in the U.S. Only 20%, 20% of Americans, based off the median income, ah, at differen…”
Hefets: Mortgage underwriting criteria have not evolved since the 1940s
“The underwriting criteria and the way mortgages were structured were determined then and have yet to evolve since that point in time. So the underwriting criteria, the down payment requirements, most of how the industry functions is almost a hundred years old.”
Hefets: Divvy Homes customers average $100,000 in household income
“Our customers on average make household income right around a 100,000 dollars.”
Hefets: 51% of Divvy Homes customers are non-salaried or gig workers
“51% Of our customers are non-salaried, meaning that they're not W-II. They'll be a 10 99 hourly so gig economy.”
Hefets: Divvy Homes transactions are 80% female-led and over 50% minority
“Over 50% of our customers are underrepresented minorities, And with our transactions, ah, they're 80% female-led.”
Hefets: Divvy capped annual home buyback appreciation at 6% during market spikes
“It didn't feel right to me, so instead of using exactly what that third party said, I set a cap, and I said, we're not gonna charge any more than six percent appreciation annually, and I don't know where to pull that number from, right?”
Hefets: Tech startups, not government, bear onus to initiate regulatory dialogue
“Is the onus on government to reach out to us and say, hey, let's have a conversation? And truthfully, I don't think that's the case. I think the onus is on us companies to make sure we are opening up that dialogue, that we're showing up for events like this, t…”
Hefets: Divvy and major institutional buyers have paused buying homes
“Yeah, I would say, right now, if you look at any institution, whether it's an iBuyer, a single family rental platform, Divi, then we're not buying homes right now.”
Hefets: US real estate transaction volume has dropped 20% year-over-year
“Transaction volume is a down right now about 20% year on year.”
Hefets: US home prices will decline 10% to 15% by Q1 2023
“Our view at Divi is that we're gonna start to see heading into Q-one year-on-year declines in home prices across Economist. That is likely to be somewhere around 10 to 15% year-on-year home price declines.”
Hefets: Over 50% of US homes hold 50% or greater equity
“There is right now over 50% of homes have 50% or greater equity in the property.”
Hefets: Post-COVID population migration to new cities will stick long term
“We've seen migration to new cities that I think is going to actually stick, right?”