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The latest Big Tech-funded effort to improve affordable housing sees the solution in people’s backyards. The Chan Zuckerberg Initiative announced today that its providing seed funding for a startup that helps turn backyard dwellings into new homeownership opportunities for Americans who are increasingly getting locked out. The Chan Zuckerberg Initiative (CZI) announced a $750,000 investment in BuildCasa, a California-based startup seeking to increase the supply of ADUs, or accessory dwelling units. The funding is part of CZI’s Affordable Starter Home Initiative, which aims to provide funding for a number of pilot programs addressing housing accessibility and affordability. Were excited about BuildCasas model because it is creating new homes within existing, high-opportunity communities that can be sold for less than typical market rate homes without utilizing public funding to subsidize the projects, which is extremely limited, Amaya Bravo-France, a program officer at the CZI, told Fast Company. [Image: BuildCasa] Founded in 2022 and named one of Fast Company‘s Most Innovative Companies last year, BuildCasa utilizes California law SB 9, which allows owners of large lots to split them up. The startups model, and its proprietary means of analyzing building opportunities, pairs landowners with developers, allowing a homeowner to sell part of their land to a developer, who can add one or two housing units and then sell them separately. The process creates additional density in existing residential areas, and adds much-needed supply to a state in the throes of a growing housing shortage. The grant will fund construction for eight housing units for those making 80% of AMI (area median income, a measure used to guarantee affordable housing goes to those in need). BuildCasa recently closed on a pair of properties in Sacramento using these grant funds, and the other six should be finished in the next two years. The Sacramento two-bedroom homes will be 650 square feet each and go for $325,000 (the area median price is $477,000). BuildCasa expects to break ground in the third quarter of this year. These kinds of lot split arrangements needs parcels that measure at least 2,400 square feet. [Image: BuildCasa] Decades of regressive housing policy and NIMBY activism on the local level has blocked this crucial missing middle development, leaving us with a catastrophic shortage of housing that young, lower, and middle-income families can afford to buy, said Paul Steidl, BuildCasas cofounder and CPO, in a statement. The only way out of this generational crisis is to build more housing. So far, BuildCasa has helped add nearly 100 units, which are either approved or under construction, across California, concentrated mostly in Sacramento and the Bay Area. One reason they havent finished any units yet is that under Californias new laws, subdividing a lot via this process can take 10 to 18 months alone. [Image: BuildCasa] Can backyard building provide affordable housing at scale? CZI says it chose BuildCasa because it believes the startup can help fill a gap in affordable housing production and provide more entry-level homeownership opportunities. [Image: BuildCasa] BuildCasas model stuck out because they utilize private capital to build these homes, but are able to offer them for more affordable rates, says Bravo-France. They also partner with homeowners to leverage their excess land to build these new affordable homes, allowing homeowners to receive a financial benefit from their land value while also contributing to solving CAs housing crisis. Part of the appeal of this model, says BuildCasa CEO Ben Bear, was the ease of land acquisition. Often, affordable housing, especially larger apartment projects, requires substantial land, which adds to the cost, and the dense collection of new units can trigger neighborhood and NIMBY pushback. By using surplus land in oversize lots, and spreading a handful of units across numerous sites, the new housing blends into the neighborhood, Bear says. Its just there, coexisting side-by-side, which is really the way development used to be 100 years ago, he says. You have different types of units, apartments, and single family homes, all on the same street. BuildCasa believes theres significant opportunity for more such units, both statewide an nationally, if laws can be amended to mirror those in California. The firms algorithm has identified 1 million parcels of land in California alone where a lot split and ADU development would be possible.
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E-Commerce
Feeling the impact of eggflation? As egg prices have soared, and the avian flu continues to wipe out millions of birds, many egg producers are struggling, but Vital Farms has managed to keep growing. CEO Russell Diez-Canseco shares how the brands relationship with farmers and transparency with customers have allowed the company to turn crisis into opportunity. This is an abridged transcript of an interview from Rapid Response, hosted by Robert Safian, former editor-in-chief of Fast Company. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with todays top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. The price of eggs is up like 50% over the past year, and in some places, more. I know there’s talk about bird flu impacting supply and hens lost. What’s going on? There’s a fair bit of conjecture about what’s going on in the market. The headline is, yes, a lot of birds have been destroyed over the last couple of years and even more recently in the last few months as a result of avian influenza, and that has resulted in a supply contraction in the market. Russell Diez-Canseco [Photo: Vital Farms] Some would say the price impact has been outsized relative to the amount of that enduring supply contraction. Almost all of those birds that have been, they call it depopulated, have been on really large farms, farms with a million or more birds, in cages, some outside of cages, but all in these big buildings with a lot of birds. That has resulted in more than 12% of the bird population in the United States being killed over the last year. On our network of small family farms, it’s been less than one-half of one percent. And I can’t prove to you exactly why we’ve been so lucky to avoid this issue, but we’ve been a lot luckier than many. Vital Farms eggs are particularly expensive, premium eggs. What makes an egg worth paying extra for, especially when eggs are already more expensive? Matt O’Hayer, our founder, is a serial entrepreneur with a big heart around animal welfare. When we first started this business, more than 95% of the laying hens were in cages, and he wanted to create a business that could liberate some of them. And that’s exactly what he ended up doing. So in those early days, we were the only nationally distributed brand of pasture-raised eggsa new kind of egg that we were trying to popularize. In the ensuing years, starting as far back as when I joined the company in 2014, there have been lots of options besides Vital Farms to buy pasture-raised eggs. Yet over the years, ours has been the most expensive version of that commodity. We’ve been growing rapidly with healthy margins. We had an IPO in 2020. It’s more than just the features and benefits. They are buying our purpose and how we do what we do in addition to this certain kind of egg. We operate with a lot of transparency. For example, our egg cartons have the name of the farm from which those eggs came on them, and you can see a video of that farm on our website. When we go to a retailer, were not just trying to transact with them. Were trying to help them plan their business to achieve their goals. Right now, its no secret that were not filling orders in full. A lot of egg companies aren’t, but we’ve developed a powerful brand, and demand, especially since we havent raised prices in over a year, is outstripping our supply of eggs. Were pretty transparent about what we commit to with those retailers. It’s a rare thing in this world and certainly in the food system. That’s appealing to some. And if you haven’t had to raise prices over the last year when prices of other eggs have gone up, that means that premium is narrower than it used to be, right? How do you maintain that? There is some balance to the way we think about the choices we make around pricing. We might have built a strong brand that we could command an even higher price at some point in the future. We also have a commitment to improving the lives of people, animals, and the planet through food. And we might price ourselves out of some growth that leaves some chickens in cages and leaves some people stuck with an egg that may not be as good for all of our stakeholders. So, we take all that into account when we set pricing. But the truth is that our cost structure has faced some inflation over the last few years, but nothing that would inspire us or force us to double pricing the way we’ve seen it in the market over the last year. And that it sounds like is you’re using more smaller farms as opposed to these bigger industrial farms? Input costs are what they are. It takes a certain amount of feed, space in a barn, heat in the winter, and veterinary care to produce an egg. These are measurable commodities. We feed our birds corn and soy in addition to what they find out on the pasture, for example. Those have not doubled in the last six months. There is a pricing discovery mechanism for commodity eggs in this market, driven in part by spot pricing of eggs. When there’s a dislocation of supply, that number can jump up and suddenly find its way into production, pricing to retailers, and pricing on the shelf. We price as a branded CPG company. I don’t look at that index. We price based on what we think is right as part of the marketing mix, like any other branded company. https://www.youtube.com/watch?v=Xm0CFIKPEBY What’s at stake for Vital Farms right now? Our goal is to build America’s most trusted food brand. The way we build this company is by operating in a certain waya values and purpose-driven way. So from that sense, what’s really important and whats at stake is how do we continue to scale a world-class organization with a strong culture in a remote environment? We went remote in 2020. We’re still remote-first. Some crew members packing eggs or servicing farms needto be in a specific location, but a lot of us work from home. That is top of mind for me because, long before it shows up in any performance indicator, there’s always a risk of losing trust or upsetting the culture you’ve built. So that’s a primary focus for me. For all the chickens, it’s about the people. It’s an interesting but appropriate way to put it. Again, we focus significantly on treating chickens well and preventing them from getting sick from avian influenza. It’s working, but it requires vigilance, ownership from farmers and crew members who support them, and great execution. Those qualities are hard to come by in many respects, so we work hard to maintain that level of commitment.
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E-Commerce
Quantum researchers are in a race for qubits, and Microsoft is in the thick of the competition. Microsoft has spent the last 20 years pursuing a topological approach to quantum development. Last week, they had a breakthrough: The company counted eight topological qubits on their Majorana 1 chip. They published a paper in Nature, got a glowing New York Times piece about a new state of matter, and buoyed quantum stocks across the market. Eight qubits isnt anywhere near what would be needed to reach full-scale quantum computing. That number is in the millions, and they would need to be error-corrected. Other companies, like IBM and Google, are much further ahead on thatjust with different models. Microsoft finally proved that the topological approach could work; now, theyve got to catch up. (Think of it like discovering a new way to build a car engine: Microsoft just got theirs to start, while others are already racing down the track.) There are reasons to be excitednamely, that a topological approach could be less susceptible to noisebut theyre still vastly behind in scale. If anybody believes this means that Microsoft is close to a commercial quantum computer, they’re missing the point, says Alan Baratz, CEO of D-Wave Quantum, a rival quantum company. It’s a validation that [topological] is a viable approach. Will it be a better approach than superconducting or trapped ion or photonic or neutral atom? That remains to be seen. The many paths to quantum computing All of our computers operate using bits, the smallest unit of digital information. This bit can be either a zero or a one. Quantum researchers are now developing bits that can be both zero and one at the same timesomething that would dramatically speed up computations. These qubits are difficult to develop, even harder to scale, and almost impossible to correct for errors. Still, researchers at major companies have made significant progress. But theres not one singular way to build a qubit. The most prominent approach to making a qubit relies on superconducting circuitsGoogle, IBM, and Amazon Web Services have all bet big on that. Another is the photonic technique, which uses light particles as qubits; thats being developed domestically by PsiQuantum and Xanadu, and overseas by Chinese researcher Jian-Wei Pan. Each has shown promise, but most still face major hurdles, keeping large-scale, error-corrected quantum computing years away. Microsoft has added a topological approach to the rat race. [For other modalities], we’ve demonstrated the physics as a community. Now it’s about scale, says Jack Hidary, CEO of AI company SandboxAQ. In the case of topological, it’s the one modality that needed a fundamental science breakthrough. But, while Microsoft has reached their science breakthrough, other companies have pushed further. Both Hidary and Baratz reference Googles Willow chip, which employs the superconducting approach. Not only did Willow employ significantly more qubits, but it also proved that error-correction was scalable. The more qubits, Google found, the more they reduced error. They were able to show partial error correction on gate model qubits for the first time, and that’s critically important, Baratz says. That’s a true advance. I think [Majorana 1] is just a proof of concept widening. Baratz is, like a number of physicists, generally skeptical of the Microsoft announcement. He references Microsofts previous failure in the arena: After publishing a 2018 paper in Nature claiming a Majorana discovery, quantum researchers began to question their findings. Microsofts scientists admitted insufficient scientific rigour in 2021, and Nature retracted the paper. Baratz also notes that the paper ignored qubit or gate fidelity, both measures of accuracy. It leads you to wonder, what is this chip actually capable of doing, and to what extent is it actually a process? he asks. For their part, Microsoft is embracing the spirit of competition. Others are working to bring this same vision to life, but with different approaches, a Microsoft spokesperson wrote in an email to Fast Company. This is what makes science fun. Some in the field believe an alternative approach is the right one to take and have invested significant time and resources into their methods. We understand why they would want to advocate for their approach. Discourse and skepticism are all part of the scientific process. Still, theres a reason scientists continue to call Microsofts paper a breakthrough. While the company may not have anything close to a quantum computeror even a lead in the race to get theretheyve pulled off something thought previously unimaginable. Most had simply given up on the topological approach. The topological approach is the most scientifically daunting approach to building a quantum computer, and that’s why Microsoft deserves credit, Hidary says. Kudos. How far are we from full-scale, marketable quantum computing? Thats still unknown. But experts like Karthee Madasmy, who was an early investor in PsiQuantum, thinks the Microsoft news is yet another good sign. The timeline has shrunk, he says. Its not multiple decades away, Madasmy says. Its actually a few years away.
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E-Commerce
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