How Tokenized Securitized Loans Solve the Housing Crisis | Elizabeth Cusma, Besa Masaiti

All right, guys. Thank you so much for sticking around here. Let's give a round of applause just for you guys right now. Come on now. Give me some energy.

There we go. There we go. All right. Next up, we have Liz Cuka as a moderator. We also have Bessa Masereti and also Elizabeth Cohen as a guest here speaker.

They're going to be talking to you guys about securitized tokenized securitized loans and saving the housing market. All right, give it up for the team.

Thank you.

All right, thanks for joining us everybody. Um, I'm going to kick off by having our two guests and go ahead and introduce themselves. Elizabeth, you want to go first?

Yeah. Hi, my name is Elizabeth Kousma and um I uh am currently with Lane 3. I am uh a community builder by nature and I've been in the actually regional and local economic development space for about 10 years and in crypto in education and partnerships for the last four. Hello everyone. My name is Bessa and I've formerly been a financial engineering fellow at Lane 3.

So doing financial modeling and I'm currently doing research on the convergence of renewable energy markets in emerging markets with um high compute operations like Bitcoin mining and AI infra.

Yeah,

thank you both. Um, I won't bore you to death with my resume, but um, because Griff Green mentioned Ethereum Classic, I was the former executive director at Ethereum Classic Labs a million years ago. Um, and with that, I'm just going to set the stage for this panel. Um, so today there's over a housing shortage of over 7 million homes, affordable homes, in the United States alone. And that's really the focus for the conversation, even though we know this is an issue across the world.

Um, if you include workforce housing, the shortage goes up to more to 10 to 11 million. Um, and this is a $500 billion plus either problem or opportunity. And so that's really what we're going to be talking about today. Let's let's make this, you know, no longer so much of a problem and how do we fix it? And so with that, um, I'm hoping that, you know, Besser, Elizabeth, one of you can go first and share generationally speaking, you know, what are you seeing today when it comes to do people still want to buy?

Are they renting? Like what's the trend? What are you seeing? Bessa, I know you've shared before something about rent shaming or homeowner shaming or something on social media. So, can maybe maybe you can kick us off and and tell us what you're seeing and then we can also talk about some stats.

Okay. Yes. Um, so I'm a Gen Z. So, and I'm always on social media on on X on Instagram. And a lot of millennials, they do talk about, you know, you should stop rent shaming.

There shouldn't be this huge emphasis on home ownership. And that I think that's partly due to this cultural shift in the US particularly where you're going from more family oriented communities to more individualistic. You're okay with living in a hacker house. You're okay with renting not just because of culture of course but because of you know the cost of living that has increased. People are getting married later in life and like I saw a survey somewhere that said like 40% of millennials do want to own homes but they have all these kinds of things that are hampering them.

So I think we have to take into consideration that it's not just like a pricing problem or like oh the housing crisis it's too expensive to buy a house but also this shift in culture and how they approach psychologically if they want to own homes if they want to have families pass on assets homes historically have been that big assets asset that people want to pass on to their you know children in the future

and I'll also say um you know owning a home and owning property is one of the only wealth generating mechanisms that we have. And so it is important and has historically been important to own property whether it's property that has a home on it or not. And so um you know as people also live longer it is harder to pass down a home because you know your parents or your grandparents are in that home for longer. And I, you know, I'm a millennial and we had, you know, we faced the the the the economic crisis of the mid as the lack of housing overall and then like just a job market that didn't allow any of us to earn enough to own a home. Um, and then, you know, you had private equity come in and private equity has been a huge barrier in terms of um, home uh, affordability.

And I will just say, you know, personally, anecdotally, I bought at the uh bottom of the last market and there's no way that I can sell my house and get an interest rate anywhere near what I have. And so I'm, you know, I'm locked into my home for better or for worse. So there are a lot of market forces at play in terms of why housing is so unaffordable and why the shortage then is so high across every metropolitan region um in the country. So to add on to that a little bit, you know, in 2020, that's when interest 2020 2021 interest rates were like 2 to 3%. And so you had this like big rush of folks wanting to buy a home who now don't want to sell or move because they don't want to take on a 6 to 7% interest rate.

So what you have is you have a market of demand. You have a lot of people who want to buy, but they can't. And then you have a lot of people who are unwilling to sell because of those rates. Um we know that um in this last 2025 only 20% of first-time home for the first time in years um only 20% of homes sold were to first-time home buyer. So it's it's pretty low.

And Elizabeth I think you told me that the age of 40 is now the the age when someone buys a home for the first time. And so you know right now we're just setting the stage and like what's going on like what's the lay of the land with both owning and renting. Um, and so with that, can you both speak a little bit to like real estate development? Okay. And so not just like the Blackstones like like kind of like the big ones, but just generally speaking like why is it that if there's such a huge gap, why isn't everyone building more?

Why why isn't there more affordable housing, more workforce housing?

Okay. So I can start first with speaking about some solutions that we have seen in recent times like this year as as it regards to like housing improving the housing or alleviating the housing crisis. There are two approaches from the demand side and the supply side. demand side. We saw from a macro economics uh standpoint, right?

You saw the president saying um instructing Fanny Mack, Freddy May that they should um buy in the open markets 200 billion worth of their mortgage back securities so that they can hopefully push down interest interest rates. And then you saw him saying like you said the private equities instructing that institutional um institutional what are they called institutions that own 100 to 500 plus homes shouldn't be allowed to buy more single family homes. And then on the supply side that's where you now talk about how can we give more capital to builders. And one of the problems that we see is that when you look at the traditional finan financial institution that you can apply for for for loans is banks right and uh as uh builders in affordable housing they're a different kind of client different kind of um profiling credit score and bankers have like these basel uh regulation requirements that say you know you you need to have um more capital in order to give uh loans to these these kind of customers. So they unwilling to take them on.

And then what are your alternatives? Your alternatives is like private credit firms. Maybe interest rates are more expensive there and eat into the profit margins of um these affordable housing builders as an example. So that's like they have to move between all these kinds of

and you also have like small business development corporations. You have other grant of uh um organizations that are are able to provide a certain amount of capital but not enough capital. So to build affordable housing, you know, the margins are inherently smaller and so many bigger lenders just simply don't want to take that on. And also you are then having to piece together a lot of different capital partners which takes a really long time. It's very fragmented.

Even if you can sell low-income housing tax credits, you know, that can take up to two years. And so, um, basically the capital stack, uh, to get a, you know, a house either to rehabilitate a home or to build new affordable housing, um, is just it's extremely fragmented and it's very slow to be deployed. I guess something to add to that is if you're trying to make more money, you're you're the first thing you're not thinking about is like, oh, I'm going to go buy I'm going to go build affordable housing because the margin is going to be so much smaller for you as a real estate developer compared if you build luxury housing. Even though the right thing to do may be affordable workforce housing, it's not always the most attractive. And so that's clearly part of the problem.

Um, and so with that, you know, how in the world, so we're here for blockchain digital assets. So let's let's shift over a little bit and talk about you know how does web 3 solve for this.

Okay. Um so I can talk about because the the title is how can tokenized securities solve the housing crisis right?

So when you think of that you think of oh um real world assets tokenized securities. So what we have been uh thinking about is you know in your head without like singling or shilling or doing anything like that like you have to think about uh a platform that matches those capital needs of um the builders right if they can't find funding from alternative sources of funding in in in in a suitable amount of time how can we have a platform that bridges capital needs of builders and affordable housing with investors whether institutional or or retail investors. And one of those um products, one of those vehicles can be uh tokenized loan obligations, right? And if you are into finance, maybe you remember mortgage back securities, but it's it's like that kind of platform allows you to pull um capital coming in from uh the target investors, institutions, um uh retail investors, and match it to the needs of builders in affordable housing as an example. And you know, you have all kinds of things in place.

You can have staking, you can have encryption, you can have whatever guardrails your team would decide to do. But that's I think that would be a good vehicle because it it would allow fractionalized investments, increased liquidity, transparency if the platform you're building on is like a a public blockchain or something like that. And you know, I don't know h how many of you have worked in in economic development, but the kind of uh builders who build affordable housing, sometimes it's a portion of their portfolio, sometimes it's all they build. So, it's a mix of of uh the actual type of builder. But what's really interesting about this type of builder is they have very low default rates, right?

And they know exactly who they're building for and they know exactly what they're building. And generally, they've been doing it for a really long time. And so from uh a risk mitigation perspective, you know, focusing on this particular builder profile is a really good test case for this type of token, right? So it's a way that we can actually use all the crypto that all of us like to make or have made or want to make and actually do something with it that a isn't going to disappear quickly. It's not going to fail because we know that these are securitized loans.

Um and we also know that then it creates it it m it mitigates an economic challenge at large that we are facing as as individual neighborhoods, as cities, as regions, as a nation, as a world. And so you actually create a bedrock layer of of a stronger economic um opportunity for everybody. And you know that allows for prosperity in a whole bunch of ways for you know for generations to come. And so, you know, focusing on affordable housing as a way to use tokens in the real world, um, not only is an investment for, you know, for the investor for them to get yield on their return, especially because we're focusing at lane three on short-term loans of only up to 18 months. But then you're also laying the groundwork for, you know, future economic development in your city or in whatever city that these particular loans, you know, are based in.

So you could, you know, for example, you could invest in loans all across the eastern seabboard or let's say you really want to focus on affordable housing in California. You know, you could diversify your particular investment if you were an investor in this kind of token, you know, to to meet your, you know, your interest as an investor. So we think there's a lot of ways where like Bessa said you can fractionalize these loans, you can allow more people to participate and you can also show regular normie people, you know, that blockchain rails, you know, the liquidity they offer, the speed of deployment they offer, the secondary liquidity options they they could potentially offer, you know, aren't just a scam. And as somebody coming from the, you know, from the real world, from normie world, um it's this is like the thing that we still have yet to prove. And I think opportunities like this where we can show that there's, you know, real utility um for our crypto dollars is really super interesting.

And so what what does that look like? Um tell me more about that in practice. So you mentioned short-term loans. Like how is that any different than a long-term loan? How is it any different than a mortgage loan?

like like speak to that a little bit more. Um and then also if you can speak to you know interest rates or like what's the return on investment like how how does this suit the kind of traditional web 3 digital asset native who who may want maybe a more aggressive return. So the the way that we have been thinking about this is that for a lot of um of this particular builder, right, this uh affordable housing builder, they need uh loans to cover the the pre-development costs, right? So um permitting costs, attorneys fees, zoning issues, construction costs. Um it's very difficult and expensive to get uh loans in pri in the private credit market for those costs.

So our idea is if we can if we can lower the cost of borrowing for them um we can speed up the time of deployment um that the yield then comes right back to the investor. We're aiming for about 8 to 10% yield in an 6 to 18th month period. So it's better than all of your other traditional investment vehicles that are currently on the market. And it gives you a way then to use your you know your crypto to then you know get that yield. Bessa do you want to add anything to that?

Yeah, I mean a question you can ask is why our target um capital for affordable housing, right? For uh the mortgage market, you have a secondary market, mortgage back securities which helps uh financial institutions like banks who give out the mortgages to uh give out more loans, right? When Freddy Fanny Mack, Freddy May, Freddy something buys those loans, right? And so um tackling the the pricing housing pricing crisis is not just a demand side which is what that is. You have to look at it from a supply point of view which is what we've been talking about which is um it's important right it's not enough to uh to drive down the prices of houses that are already existing in the market.

You must use some kind of financial vehicles that will uh onboard new uh financial investors. Right? You talk about democratizing finance, right? That will also um give capital access in a transparent quicker manner with smart contracts hopefully um to builders. Yeah.

So when talking about onboarding, you know, new investors and just new people in general to web 3 and crypto, you know, we're talking about affordable housing and workforce housing. I mean, it can't be easy to con to convince a real estate developer who doesn't really know anything about this world, you know, to come and come and come and play and and to be interested, right, to like align incentives with interest enough so that they'd actually want to participate, not just buy a meme coin, but actually be an active participant and and therefore also onboard the next, you know, millions of people to this space because there's more in it for them. Um, as well as billions of dollars of new capital. So, what's it been like so far, you know, talking to folks in real estate who have no, you know, no awareness of the space really beyond just like Bitcoin and Ethereum?

Yeah, I I mean, I can speak to that. I work with um uh a community group, a uh a nonprofit that has a for-profit arm that uh rehabilitate buys buys homes, rehabilitates them, and rents them to immigrant and newcomer families when they when they uh you know move to to my city, which happens to be Cleveland, Ohio. and um and um you know when they they know that I've been in crypto for the last few years and you know when I talk to them about the potential for borrowing this way that you know like there's this platform and you fill out an application it goes through a vetting process you know we deploy the capital to you that you can then pay the construction um fees or you can pay the builders or you know whatever they're just like okay I know you, I trust you. Um, this is a way for me to get dollars and you'll walk me through the process and show me how to do it. And they're like, "Okay."

Like, it has been the easiest crypto sale I have ever made in my entire life. Like, I can't tell you this has been so much easier to really talk to builders who are, you know, who are in the trenches every day trying to house people. I mean, really trying to house people. And if there's a way that they can get access to affordable credit that they will pay back. I mean, it's not these are not like grifters who are going to run away with this money.

I mean, these are community leaders who are, you know, managing 10, 20, 50 housing unit projects at a time. Um, they're embedded. They they have a responsibility to the community that they serve. And so in terms of a risk mitigation profile like this is a perfect kind of borrower for a stable coinbacked you know investor like you know the people here at this conference. So out of all the things that I have tried to get people to do in web 3 this has been by far the easiest.

Okay we got 20 seconds.

So if there's one thing that um that you wish we would have covered but we didn't you know what what would what would it be? What do you what's your takeaway that you would like to leave the crowd with? um consider privacy encrypt and encryption very much seriously the trade-offs between te zero knowledge proofs and all and different kinds of rollups and you know incorporating them in your projects in our project I think that's something we should consider as well

and like cue like we can this is our community these are our tools we can use them as we wish to build the kind of world we want

thank you for listening thank you for coming have a good day