I believe essential things have gotten very expensive because we have only relied on conventional markets to give society some of the things it needs for basic survival and therefore, its flourishing. Housing is an essential item that has specifically risen in cost because of the conventional market behavior. We usually ask how to provide more housing with existing financial structures. What if we also question the financial terms those structures require? The terms on which capital is provided can affect which projects are financially feasible, how much revenue they require, and who benefits from the resulting economics. Focusing on the terms is a practical action we can take but it must be done outside of the conventional market.

I believe we need a new market—not a replacement—but a complement to what we have currently to help deliver things more affordably for Americans so they can live more stable, productive, and fulfilling lives. When we think about markets, money and investing, we’ve relied too much on the simple idea of what can I get for my money? Or said more simply: What’s the most I can get? We need a new market that is more ambitious, one that asks, what can my money make possible?

Finance can be complicated, and housing finance is even more so. I am not going to try and simplify all of finance here, but I am going to spend time laying out an approach that simplifies how housing can be financed which can help simplify everyday Americans’ finances. To do this I am introducing Agentic Capital, the approach to deploying capital intentionally, and with the agency inherent in the terms of capital itself: what return is required, what risks are acceptable, how long the capital stays invested, what claims it makes, and what outcomes its structure is designed to enable. Agentic Capital is more than conventional. It is capital that harnesses the power of its ability to choose its terms.

The idea begins with a simple premise: capital does not have to seek the highest possible financial return to be successful.

An investor can deliberately accept a lower return in exchange for making a greater outcome possible. That outcome might be more affordable homes, a larger number of people served, or a more efficient system.

But accepting less is not enough. We must be able to demonstrate that the decision actually created additional value compared with what would have happened otherwise.

The question is not simply how much return the investor gave up. It is what that choice made possible—and whether the resulting value exceeded the cost of the concession. This is the foundation of the Economics of Taking Less and the fundamental infrastructure for the Agentic Capital Market.

The housing crisis has forced Americans to confront the consequences of not building enough housing to meet demand. The consequences extend beyond housing itself: they affect the American economy, trust in the American Dream, and stagnated American ambition.

Who knew that underinvesting in building houses could have such far-reaching effects? We do. Now.

So what if we approached the problem differently?

Why is housing so expensive now? The short answer is because too many people rely on a historical rate of financial return which drives up the cost of building new housing through the process of actually building the buildings. In many projects, the return requirement by investors contributes to the cost of building housing. If we can change that expectation in exchange for a measured outcome, we may be able to lower the cost of delivering housing and pass that cost savings on to residents. Housing requires substantial upfront capital, and the financing terms affect what it costs to deliver. What if some investors or lenders were willing to accept less financial return in exchange for a measurable outcome, such as more homes built or lower rents?

Building buildings costs a lot of money, it is very capital intensive. There’s a lot of risk involved. However, what if we looked at the cost of that capital as a design choice rather than an unquestioned industry constraint. Right now, every actor involved in the process to build a building expects to make a certain amount of money in exchange for doing the work. Good. Great even. That works. That works because they are building buildings to make money. Making money is the goal. What if this other approach had the goal of increasing the supply of total housing across America. What if we designed our approach to achieve that greater supply and structured the financing accordingly to achieve this goal.

By decreasing the cost of capital necessary to build buildings, meaning lowering the expected returns for lenders and investors, could we change the feasibility, affordability, and ability to scale home building across America? This is a hypothesis I am testing through my work at The Affordability Project. I believe we can make it work, and my experience is giving me reasons to pursue it. The next step is to measure what changes, how much it changes, and why. If we set a different goal and achieve it, we are still undeniably successful. We just have to choose to do it.

Here’s my proposition for a new goal to increase the supply of affordable housing: Accept less financial return when doing so can create additional measurable value—and keep that value working toward the intended outcome.

Consider a hypothetical housing development that requires outside investment. To be clear—these investors are taking a big risk and are usually the first ones to do it. Under conventional financial terms, the investor requires a return that contributes significantly to the project’s overall cost.

What if some of those investors were willing to accept a lower return in exchange for a measurable outcome, such as lower rents or more homes built?

The difference between the conventional return and the agreed-upon return could reduce the project’s financing costs. If that savings is passed through to the project, it could make homes more affordable, reduce the need for subsidy, or help finance additional housing.

But none of those outcomes is guaranteed. The savings might instead increase the developer’s profit, or the lower cost of capital might not materially change the project at all. This is precisely what Agentic Capital must measure: what changed because the investor chose to take less, and what additional value did that choice create?

An investor’s decision to accept less may create additional economic value and social value—but only if the concession changes an outcome and the additional value can be demonstrated. This is the core of my economic theory. Agentic Capital—again, the activation of capital using this theory–asks a specific question: when an investor voluntarily accepts a lower financial return, what additional economic and social value does that decision create compared with what would otherwise have happened?

Every investment is a choice about the future. We choose where capital goes, what return it must produce, how long it remains invested, and what it makes possible along the way.

What if we judged some investments not only by what they return to the investor, but also by what they make possible for everyone else?

Could accepting less financial return help build more affordable housing, improve educational outcomes, or reduce homelessness? And could we measure whether it actually works?

Those are the questions I want to explore through the Economics of Taking Less and Agentic Capital.

The goal is not to abandon markets. It is to discover what markets can accomplish when we deliberately choose the outcomes we want capital to create.

Capital is not just something we accumulate. It is something we put to work in shaping the future.

We can choose to make it work differently.

Choose to Make It.

The article mentions the Essential Housing Fund, a private investment vehicle focused on workforce housing run by Fifth Space. Crankstart One of The Affordability Project’s key partners, was one of the first investors. Missy Narula, CEO of Crankstart, explains the fund saying, “the fund was not designed for investors seeking outsized returns: Its goal is to demonstrate that housing serving the city’s middle class can also be a viable investment.” She added, “If you care about building the kind of housing that will house the people who sustain our city, it’s a great investment.”

We are honored to partner with people on the cutting edge of thinking about innovative capital. Business as usual works for what it is designed to do. But business as usual, on its own, has not produced affordability at the scale the shortage demands. If it could, the gap would not be three to four million homes. Unless we are willing to add an option. Not a replacement for the market. A complement to it. A for the Common Good Capital option earns a place only if it competes on quality and on business fundamentals, and only if its ambition matches the size of the problem. It requires philanthropists, social impact investors, and mission-aligned landowners, developers, and contractors willing to build a different model together.

Fundamentally, we believe housing has become unaffordable because of capital market failures. When the cost of capital is associated with maximizing returns, the middle-income earner cannot pay enough to achieve traditional expected returns. Our approach is similar to Wal-Mart’s strategy: negotiate hard to drive down costs, pass the cost savings to consumer, and then focus on volume. The Affordability Project, a 501(c)(3) organization, is not interested in developer fees or maximizing individual deal returns, we are focused on our mission to increase the long-term supply of housing of the people who ensure our communities’ civic and economic viability.