Pirate Wires - How to Build a City: California Forever w/ Jan Sramek & Devon Zuegel

Episode Date: March 27, 2024

In today's episode, Mike Solana is joined by Jan Sramek & Devon Zuegel to discuss California Forever, a startup aimed at building an entirely new city in California. We get into why Jan has raising $900M for this project, the problems with current cities, doing the impossible, and the ferocious push back that he has received.  Featuring Mike Solana, Jan Sramek, Devon Zuegel Subscribe to Pirate Wires: https://www.piratewires.com/ Topics Discussed: Pirate Wires Twitter: https://twitter.com/PirateWires Mike Twitter: https://twitter.com/micsolana Jan Twitter: https://twitter.com/jansramek Devon Twitter: https://twitter.com/devonzuegel TIMESTAMPS: 0:00 - Welcome Jan Sramek & Devon Zuegel 1:30 - Growing Up & The Magic Of Disney  6:30 - California Forever Explained 11:15 - How Our Modern Cities Have Gotten Worse 17:30 - The Massive Push Back From The Press, Cititzens & Local Govts 29:00 - Raising $900M - What Happens Next 38:40  - Who Will Run The City? Local Politics & Safety 41:00 - Why California? 43:45 - Water Management, Country Concerns 48:20 - Comparing Recent City Builds 51:30 - What Happens If The State Gets Worse? Other Problems To Combat 59:45 - Can This Be Replicated Across The Country?  1:04:45 - Thanks Jan & Devon For Joining! 

From the moment I got to the Bay, I loved the area. I think that basically the modern world was invented in the Bay Area for the last 70 years. California Forever is building a new city for up to 400,000 people. You can think of a place that looks like the West Village in New York, or Georgetown in DC, or Noe Valley, or the Marina in San Francisco. It has deep respect for lessons that we've learned the hard way over the last 100 years. California is missing 3.5 million homes.

So there is a lot of demand. This is something that's really interesting about cities is that it's something that we've seen to get worse at over time, not better. So you've received a lot of ferocious pushback that the idea that we shouldn't be building new cities is crazy. After building cities for 5,000 years, we now have the exact correct number of cities. You have billions of

dollars of capital. You have all of the people want to move here. You have all of the companies want to build here. All we have to fun one today. We've got a special one about cities and building cities. I have two special guests with me, Yad Shemek and Devin Zugal. And I'm going to let them kind of break down who they are and what they're working on in a second. But first, just to like the kind of high level topic of the day. As a very, very, very little kid, we went for years, we'd go camping at Fort Wilderness. My family would drive down from Jersey to Walt Disney World. We'd go camping at Fort Wilderness and we'd go to Disney and, or the Magic Kingdom sort of in Epcot and incredible infrastructure everywhere and like monorails and ferries. And separate from the sort of like theme park piece of it all,

to me as a kid, I was always shocked at the fact that this was a city. It was an interesting city and it had been built. It was separate. It seemed to play by its own set of rules, and it had been built. It was separate. It seemed to play by its own set of rules, totally different than the rest of the country. And I remember wondering why other cities weren't as nice as it, even as a little kid. And I just was fascinated by the idea. And years later, I read this book, phenomenal book called, it's a biography of Walt Disney called Triumph of the American Imagination, which Devin, you and I have talked about. And I'm trying to remember, I forget, I think one of us got the other one on it and I can't remember which way it went now. But we've talked about this book before. We've talked about

Disney before. And it was always just something that was interesting to me, I think intellectually. And then 2020 happened. And I was living in San Francisco when I conceived of Pirate Wires and, uh, a big sort of motivation for me was just processing what I was seeing out my window. Um, and suddenly the idea of building a new city took on a different kind of a life. It was this much more complicated question of exit versus voice, which we will get into a little bit later in the day. But Jan is in this very interesting place where he is actually working on a city and it's gotten a lot of press. It's mostly negative, but positive from the people who matter. I think it's a really

cool project. Devin has written a lot about it. I think it's a really cool project. Devin has written a lot about it. I'm going to let them both introduce themselves right now, and then we're going to get into the questions. Jan, why don't you just start? Who are you and what are you working on? Yeah, I'm the founder and CEO of California Forever, and we're building the city outside of San Francisco. I mean, I grew up in a tiny town of 1,000 people in the Czech Republic, in a very blue-collar rural area.

And then through scholarships, I was able to live in some of the greatest towns and cities in the world. I lived in the old York and the old Cambridge and London and Zurich. And I worked in finance for a number of years as an investor and trader. And then I worked on software startups in education for five years. And through that, through New York, eventually ended up in the Bay Area. And I was just fascinated with the place for, I mean, I love the place for all of the reasons everyone does, right? It's the cultural openness, the innovation ecosystem, this unique combination of talent and creativity and capital. But I was not enamored with the physical place itself, particularly outside of San Francisco. And that was really the

genesis of this idea back in 2014, 2015. And we can get back more into that later. Well, first of all, I should say our shared love of Disney is definitely one of the big reasons we get along so well. It's a really inspiring place, and we should plan a Disneyland trip sometime soon. Oh, 100%. What we should do is we need to take the Bright Line to Disney World. Yes, absolutely.

High-speed rail straight to Disney World. I'm not going to say no to that. But yeah, I'm Devin. And I've spent most of my professional career actually in software. But I've long had a fascination behind cities and how they work. Because they're really platforms that all other human activity is built on. And so about almost a decade now, I got involved in Bay Area housing policy. And I actually grew up in the Bay Area as well and went to college around

there. So I'm really Bay Area native. And I also started blogging about land use economics and urban design because I just got fascinated with this question of, you know, where do we live and how does it shape the way that we live? I have my own project that I've been working on that we don't need to get into right now. But just a small tidbit is that it's a sort of multi-generational college campus for families. And it's called Esmeralda, but that's a completely different conversation. And really for the sake of this podcast, the most relevant fact is that I recently published a deep dive series about California Forever after researching the project for several weeks to really understand the ins and outs. As soon as the news came out,

I was just like, I have to learn everything about this project. This is the most exciting thing that I've ever heard happen in my home state. And it could totally transform the way that California works for the better. So yeah, that's why we're here. This does feel different in several ways from anything that we've seen, at least in my memory, when it comes to these sort of new cities, charter cities sort of orbit. Jan, do you mind just kind of breaking down what exactly is California Forever and how is it different than what we've seen over the last few years in this space? Let's say last 10 years in this space. in this space? Let's say last 10 years in this space. Yeah, I mean, California Forever is building a new city for up to 400,000 people about an hour north of San Francisco, in a place called Solano County, about halfway between San Francisco and Sacramento. And so I've been working on this for eight years. We've raised $950 million. We've purchased over 60,000 acres. And we're building a city on about 17,000 of those acres.

And so that's about two-thirds the size of San Francisco. And really our goal is to create more room in the Bay and build a city that the Bay Area deserves. And we're trying to build a very traditional urbanism. I mean, 19th century American urbanism, a place that most people born in 1900 would recognize. And so you could think of a place that looks like the West Village in New York or Georgetown in DC

or Noe Valley or the Marina in San Francisco. Now, we do think we can improve on the design of those places, but that's the core of it. And then we're going to surround it with a green belt of open space and agriculture and solar farms and wind farms. And in terms of framing it, I do think it is different in that if I go back further, I think we had a New Towns movement in the UK and in America that started in 1900s and really was popular in the States in the 60s. And we built places like Reston and Columbia and the Woodlands and Summerlin and Irvine in Southern California. They were really new town-scale projects,

but they were very suburban. And so some of them are today the best-in-class suburban communities, but they are not what you would call a dense, walkable city. And then in the last 20 years, there's been really this renaissance of what now is called new urbanism,

where after decades and decades of building what the urbanists would call sprawl, we've gone back, a subgroup of people have gone back and said, hey, we need to build more walkable places again. And they've built some spectacular places, but they tend to be on the smaller side. And so there's places like Seaside or Alice Beach in Florida, and really the Northeast has been probably the best place for this in the country. But they tend to be more like vacation towns. They tend to be places for five, two, five, 10,000 people. And they haven't really confronted the big questions of scale. If you're trying to build a walkable place, how do you make it scale to hundreds of thousands of

people? And so I think we do sit in a kind of unique quadrant in that sense, in that it's meant to be both walkable and a genuine economic engine, a genuine city with employers and industrial parks and hospitals and college campuses and so on. And then the last thing I'll say is, I think we're also quite different to some of the attempts to build new cities that have come out of tech.

So if you look at what Sidewalk was doing at Google or what other people have announced, we are distinctly not a smart city. I mean, I've used the word dump city. And so we're trying to do something new in that we're trying to build in atoms and go back to the time when California could build in the physical world. But we're not going to put sensors on every crossroad and in every toilet and none of that smart city thinking that really I think has actually poisoned the well for tech when we've tried to do that. Yeah, I've talked to the founder of Sidewalk, who's now the founder of

Forward Health about this. And he talks about about he's a fun guy he talks about it it's like well you know what if you could put a bubble over a city and like it's like let's monitor this and monitor that but you're talking about something that um is much more lindy and it you were just a moment ago you mean you said this is modeled off of the 19th century walkability. And Devin, I would love your thoughts on this as someone who studies this kind of stuff and has written a lot about this. I follow your work also on charter cities. What is it about that period of time and the walkability? It's like, let me narrow this question.

I think that we have this sense in a progressive, and by that I mean technologically progressive society that is literally progressing and building and things are changing. We have the sense that things are always getting better and maybe can only get better, especially in America. It's an easy place to be an optimist. But in fact, our cities have gotten a lot worse, separate from all of the politics, a big part of it is cars. Like, what are we missing? And what, if any, resistance are people facing in this sort of like, let's go back to something that we know works, that we know is beautiful, that we know we want to live in?

Yeah, I think that really captures one thing that's so cool about California Forever is that in some sense, it's incredibly futuristic and bold, but it's actually really, to me, the key aspect of it is that it has deep respect for lessons that we've learned the hard way over the last 100 years about urbanism. I think when the car arose, everyone thought this is like the panacea that's going to solve every problem. And the car is a great tool for a lot of things. I am not a car hater. I actually really am a big fan of cars,

but they have their place and using them in every single moment, every single day is not necessarily the right thing. And for, for people who I remember when I was, I used to be very obsessed with cars when I was in high school. And if I, if I had heard myself saying what I'm saying now, back then I would have thought that I was crazy.

But I think once you start thinking about some of the effects that cars have, like just for one example, cars take up an insane amount of space. I mean, a single parking space is the size of a small bedroom. about how the width of our streets and the amount of space that is taken up simply for car storage, let alone for moving them around and making sure that there's extra space, it ends up taking away space from people. And so there's lessons that we've learned basically about how cars spread everything out. And by making everything farther apart, suddenly now you have to have a car because everything's spread out. So all the distances are not no longer human, human scale. And I think what Jan and his team have put together with their plan is recognizing that, you know, places like Noe Valley in San Francisco work really well and not everybody who lives there has

a car. Um, and, uh, and they can't, they can choose to, but they also can opt out and there's a way to live. And I think that what you said, Mike, around sort of the idea of progression and sort of things always moving forward, that is really the essence of why I got so obsessed with cities because in so many realms, we've moved forward over the last hundred years dramatically. But then you look at the way that the urban form is and it turns out that all the places people want to live today and that are

most expensive are places that were built a hundred years ago, or a few exceptions like the new urbanist communities that Jan mentioned, where they built to those principles. But for the most part, when you live in the New York metro area, where is the single most desirable place? It's the West Village. It was built a long time ago. And the newer neighborhoods just tend not to have as much attraction. And so anyway, I could talk about that endlessly. But I think that this is something that's really interesting about cities is that it's something that we've seemed to get worse at over time, not better. I think Devin is 100% correct on all of this. And I mean, it's a big question that a lot of people have started to ask, right? I mean, even people like, I mean, Tyler Cowen has

been asking this question as well. Like, why can't we build amazing new neighborhoods? Why is it that all of the old neighborhoods are, why is it all the great neighborhoods are great? And it is, I think one way to think about it is that cities have gone better. We just, if you, you just need to extend the period long enough. And so if you look at like a 5,000 arc of human, 5,000 year arc of human history, cities have gotten better for about 4,950 years, where every generation we will take these lessons and build them into a tradition of well how wide should the road be so that or the street be sure that humans feel like it's a cozy place they want to hang out in and how do we design the buildings and how do we do architecture and then we got the car invention a hundred years ago or something like that and we just got

completely enamored with that. And it's taken us a long time to figure out the right place for it. I think Devin said it right. It's a great tool. It's got a place in society, particularly for going from one city to another, but it's not a great tool for moving inside cities. And so I think we're just coming back to the period

where we figured out how to use this new technology called a car. It just took us a century to figure it out. And one thing I wanted to jump onto that Jan mentioned earlier was just how much of the land is actually going to be developed. So I think this question of making a place more walkable, it's not just about the quality of life improvements that it will bring. It's also about using our land more efficiently and destroying less of the landscape, frankly. The current patterns of development that we have are just taking over

all of California. They're just, you know, all of those beautiful rolling hills that we have and cliffs, you know, they're just getting covered with big block development that where no one goes outside on their front porch. And if you bring things in and cluster it a little bit more, you can save a lot more of the land for other uses. One image I love to share with people, because it blew my mind the first time I saw it, was that the city center of Siena, Italy, which is a beautiful town that people spend thousands of dollars to go on vacation to, it's the same size as a single highway interchange in Houston and not a particularly big

highway interchange. And we need highway interchanges. I'm not saying we're going to get rid of all of them, but it just shows the scale of how much you can put in one place that is really beloved too. We're not like squishing people together, forcing them to live on top of each other. They're living great lives in one of the most beautiful historic cities in the world. You can put that in the same amount of space as an interchange. I want to talk about some of the specific problems or challenges facing California forever. But first, I kind of want to get into it with the broader thing.

So we were asking this question of, well, why can't we build new cities anymore? What is holding us back? And it seems to me like the big thing holding us back is us, our idea about it, our idea about building new things and building new cities, and just maybe even our suspicion of something like this. Devin used the word bold a moment ago, and I do think it's bold. And it's not because it's technically challenging. It's bold because it's culturally controversial, which is bizarre to me,

and I want to spend some time on that. So you've received a lot of ferocious pushback. I noticed immediately some of it was on, most of it maybe even was on class grounds, and you expect that from the tech press. It's sort of like, billionaires are doing something type attack. And that's maybe part of it it is people think this is for rich people and not and not anyone else um but also some people saying that it was just not possible this is like a pie in the sky sort of thing which the class thing you expect that sort of thing and it's dumb and we can talk about that if you want to but i think it's just not a serious critique i think the more interesting critique is actually just the idea that people don't believe this is physically possible. And as you

mentioned, there are many examples of people building cities, not even in this big, exciting sort of charter city in the island type way, but straight up like new cities in America and up to it, including something as ambitious as Disney World, which we just started talking about a moment ago. Where do you think this idea that this is not possible has come from? What do you think is fueling that? Do you have any insight into that at all or any kind of suspicion about it? Jan, I'll start with you. Yeah. I mean, I think at a high level, it goes against the order of things in some sense. I mean, we used to build new cities all the time and we haven't done it much in California in

a long time. And so people are trying to figure it out and slot it into some kind of a box. Now, I think if you look at it rationally and you kind of unpack the arguments, they are all basically ridiculous. And so just to mention a few, I mean, you have the attack on the investors, which is funny because in 2015 or 2016, the elite opinion in the Bay Area was that the investors and the founders of these companies were wasting their time building stupid apps to send text messages back and forth, and they should really be investing in the real world to help hardworking Californian families. And I was there sitting in like 2017, raising hundreds of millions from these people

who were investing in a project that has a 20, 30-year payback and doing exactly the kind of thing that the media was calling for. And now that they've done it, the media is all upset about how dare they invest in the real economy and go back to building apps. So that's ridiculous. And then the idea that we shouldn't be building new cities is crazy. First of all, it's become completely acceptable in California

to say that you're building artificial general intelligence. You're building a piece of code that's going to be smarter than a human. Not controversial at all. I mean, not just in the Bay Area. That's accepted wisdom. But the idea that when we get to a place where not a very nice house costs $5 million and teachers can't afford to live here,

we should maybe take some piece of ground that isn't prime farmland and that isn't sensitive ecological habitat and build some houses there so that teachers don't have to have three-hour commutes is now controversial. That's insane. And another way to think about it is

we've been building cities for 5,000, 10,000 years. And a lot of the arguments of the opposition basically boil down to is after building cities for 5,000 years, we now have the exact correct number of cities. Yeah, we've got all the cities. We've reached the pinnacle. And if we ever built one additional city

after 5,000 years of building it, that's the end of the world. That's very, very bad. And it's particularly ridiculous in a country like America where every city is basically a new city by European scale, right? Like, I mean mean it's crazy on the the the housing thing specifically it does it blows my mind that there would be so much pushback

for something that is so important um I was in a separate conversation earlier today about the tick-tock bill that's happening the divestment possibly and there was a question of um you know if tick-tock is forced to divest and China chooses to close the app instead, you know, might there be some political reaction to that? Like, oh my God, it could be this huge political hit. People will freak out. They want TikTok. And I thought, well, first of all, it's a bipartisan bill. So I don't know who you're hitting. Like, I mean, everyone's supporting this thing. It's bipartisan on the negative side. It's bipartisan on the positive side or opposition versus support.

But second, I was like, I don't – you know what people really care about? They care about the fact that they can't afford their rent. Genuinely, I think that this is – it is – and in sort of urbanist groups like the Yimby sort of type people and in like moderate to left of center politics in most cities. This has become correctly, I think, a point where people are like, the problem of all the problems is this cost of housing, obviously. And everyone wants, does everyone want, I don't know that everybody does want the housing costs to be lowered. I know that the average person sort of intuitively grasps that we need to do something about housing because everything comes down to it. And that is the major pain point. This is why people think that the economy is not doing well. This is why people don't care about the stock market and they don't care about

the quote, like the reality as according to whatever talking head on TV wants to tell you that your life is better than it is. It's like, if you're struggling to pay your rent, that is a problem. And you're talking about building a new city next to a city that will create a lot of housing. That is, it's just like, so obviously that the challenge that's of our generation, you know, we have to figure this out. What I still feel like I have not heard a really, I don't understand why people are mad. Is it because of the idea that you're leaving perhaps? Like you're giving up on San, even though you were expected to get involved and now you're not like, you know, we started by criticizing people for not doing enough in politics. now they're leaving and they're criticizing there for that i get it but is that what it is is there the sense maybe that well california is just san francisco will just rot and this special city right on the outside is is going to thrive it could that i mean is that maybe where the anger i don't think so um that's not my read my read is more that people there's not a really good uh

economic understanding of how these things work. And Jan, I'm curious to hear what you think too, but I think people don't have a clear sense, frankly, of supply and demand. And the idea that if you build more, it's going to get cheaper. And I think, you know, when you put it that way, it sounds very derisive, but I think a more sympathetic understanding of that is what they see is there's these developers who are building stuff and the stuff that they're building also costs a lot of money because houses are expensive. Even if each individual unit that you build brings down, increases the supply and brings down the cost. And when you hand over a big chunk of money to somebody, it just doesn't feel good. And it feels like that person is taking

something from you. And I think that it's, it's a deeply emotional experience where you're saying, I got to fork over all this cash to just live in a place. And it's sort of a shoot the messenger situation. I think basically where the developer is on the other end, who's actually creating the value, but then they're the person who has to end up getting paid because to create it. And so I think that, um, I'm not sure if the answer is like better economic education to understand that, like, you know, just like how if you have like a lot of sugar, you're going to feel really bad in a few weeks or months. Like if we don't build housing, housing is going to be super expensive. And unfortunately or fortunately, you know, developers are the people who build housing. So and I guess one of the things I'd add to that is there are way easier ways to make money than real estate development. And I think that that's not well understood.

I think that people think that real estate developers make insane amounts of money, maybe because like Donald Trump is really loud and has, you know, a whole brand around it or something. I don't know where that comes from. But like developers, if you're if you're looking at it from a pure investment perspective, there are faster ways to get rich, much, much, much faster ways. And I think a lot of people who are doing this type of work are doing it because they deeply care about making the communities that they're in better. And then, yeah.

And I guess actually one last thing is I think there are also plenty of developers who are mostly deciding sort of based on spreadsheets and they're not thinking about the design as deeply as California Forever has maybe spoiled spoiled and you see that in the style of housing that's built that is just completely hideous when you can get something built in san francisco it's disgusting to look at plain soulless you see them in every single city um on the supply and demand thing that is absolutely a weapon that is used against

development in the city and always it's well, this is going to be an expensive place because it costs a lot of money to build. And almost all of that comes down to regulation. But it's going to be really, really expensive. And so who's this for? It's not for me. It's not quote affordable. And I got to thinking this myself, maybe like a year or so ago, right? It hit me like, I always say, oh, what do you not understand supply and demand? I think genuinely no. I think the answer is genuinely people do not realize that if there are a lot more places available, the costs have to go down. And that is one of the problems. Sorry, John. Jan, I know that you wanted to say something. Oh, no. I mean, I think that's all correct. I mean, housing, it's such a complex product to understand, right? Because you have the thing that Devin said,

which is it's a really big part of your paycheck, whether you're paying rent or whether you're paying a mortgage. And then it influences your built environment and you live in it. And then it's about change. And then you have construction that kind of disturbs your community for a little while. So it's a complex thing. But I would actually say that one of the things that I've been most surprised by is I think in California in the last five years, the average person really has understood that supply matters. And so I don't want to overstate some of the negative sentiment. I think some of the media has been pretty negative. And in every community, you have five or 10% of people who just hate change, and they are going to protest it. But we talked to the average voter

in Solano County, and basically they get it. I mean, literally, it's been amazing to see when we talk to the average person here, you talk to someone in a coffee shop, and you ask them, hey, what do you think about it? People are overwhelmingly in favor of it. And we ask them why. And they say, well, I want my kids to live here and we don't have enough houses. And so I think in California, something broke in the last 10 years in a good way where people actually are understanding that the supply matters. And that's one of the I mean, that was one of the things that made me optimistic about this 10 years ago, eight years ago when I started, which is I think it got bad enough that people understood it.

And I think we also have an interesting basically a case study and a comparison where you can really easily show people a chart of how much housing is getting built in Texas and how affordable it is and how much is getting built in California and how much it isn't and so we have that AB test and people understand it in in a different way and so I think the winds have shifted on this and a bunch more sort of abstract questions and also tactical questions but first I want to just hammer down exactly what you are doing so uh in terms of the process now so uh you mentioned I didn't realize quite how much you raised. You said a couple hundred million or hundreds of millions. You were saying how much have you raised? Over 900 million. I had no, yeah, I did not realize it was that high. That's a lot of money. That's, I mean, this is, that's very exciting. This is like you're well capitalized. What are the steps forward now? Just sort of like take me from now until Citi, what has to happen?

Yeah. I mean, you can think of this project as, I mean, biotech is one way to think about, biotech companies are very distinct stages of how they get built. And our stages are different, but the project has these different stages. So we had a stage one was buy the land. And so there was seven years and basically raise the money and purchase the land. And we purchased over 60,000 acres and now we have it. And now the second stage is really design plus approvals, what in real estate you would call entitlements. And so that's about a two to three year process where we announced that six months ago. We talked to the community, we took the input, we designed this plan and we're putting the plan on the November 2024 ballot. And so in the general election, every voter in Solano County is going to vote on this.

And what they're going to vote on is they're going to vote on basically changing the general plan and changing the zoning to permit the creation of this new community. with a set of voter guarantees about how many jobs we're going to create and how much those jobs are going to pay, about how much money we're going to contribute to making the homes more affordable to residents here, about how much we're going to invest in existing downtowns out here. After that, we would go through environmental review and negotiate something called a development agreement, which is a more detailed version of the approvals with the county. Hopefully, that's going to be done in 2026. And then subject to resolving any

remaining disputes over the environmental impact report, we should be able to start building in 2027. Now, that's a pretty ambitious timeline by California standards. It's going to require a lot of things to go right to make it happen. But I do think there's this cultural moment in California where people are sick and tired of high-speed rail taking 25 years to build because of environmental permitting. And so we are hoping to be part of the movement to say, hey, once something has been approved, particularly by the voters in California, we should be able to break ground in two years and not waste years and years and millions of dollars on legal fees and consultants and all of that. One thing I think is genius about this approach is, for a little bit of context, the timeline that Jan is describing, there are individual apartment buildings that take the same amount of time to get built in California, which makes you think, well, how could you possibly build a city in that time? But one of the things that's, I think, brilliant about California Forever is instead of having

this sort of pecking approach where it's just going one piece at a time, let's get this approved, let's get this approved, it's being able to sort of think this entire zone is going to change. And that's not going to make it trivial for developers. I'm sure it's still going to be hard work to build apartment buildings and homes and businesses inside of the city. But what California Forever is doing is building a platform that other people can build off of so that they don't have to start from scratch with those approvals,

which can make a much bigger difference than any individual project can. You're saying the individuals within California forever. So I'm actually fuzzy on that. Let me maybe clarify. Devin, what Devin is saying is there's two ways that you could approve building a city. You could approve it bit by bit. You approve 1,000 units or 50 units, and then you keep going. What we're doing is we're saying we're going to have a, think of it as a program level approval. We're going to approve the whole

community at once. We're going to put a set of guidelines in place about what you can build, what it can look like, the performance standards, the jobs that it needs to generate. And then we're going to do one big environmental review on this whole community at once. We're going to assess all of the impacts. And we're basically going to create what you would call an envelope. And then as long as you're building within that envelope, something that's been studied, something that's been permitted. So if you're building an apartment building, if you're building a factory, if you're building an office building, if you're building a retail shopping mall, as long as it's within the square footage and the height limits and the performance limits of this new community,

you can get an approval to go and build it in 90 days. But I was just wondering if you're building everything or if you're inviting people to come and build after you've received approval. We're inviting people to build. So Devin and I think about cities in exactly the same way, which is they are platforms. They are platforms for lots of different people to come

and make their lives, lots of different businesses and developers to come and build. Now, we'll be one of those. You can think of us, we'll be one of the developers, but I would expect that we do 10%, 20%, 30% of the development and then lots of other people come and build on the platform. Right. It's kind of like the Apple App Store maybe as an analogy where Apple has its own apps that it's built, like the calculator app and the phone app and stuff, because those are the

basics of what you need. But then the richness and the value of the App Store is really that you can bring in a lot of other people. And I think one thing that's so cool about this is that it lowers the threshold for the size of a developer that they need to be to be able to work on a project. And that's in two key ways. So right now in California, because it's so hard to get through the regulatory barriers to be able to build something, you have to be a huge company for the most part to be able to build a project because it just takes a lot of lawyers and a lot of relationships with the city to be able to get something through. And what that means is that smaller developers who build those really richly detailed, beautiful buildings that are part of the community, they're pushed out of the market.

And so in California Forever, in the city, smaller developers will be able to participate. And then similarly, the scale of the projects will be able to be smaller, allowing for finer grained development. You know those huge apartment buildings, mostly in the newer parts of San Francisco, for example, they'll have thousands of units and they'll take up an entire city block. They'll have no soul. The reason that those exist, or one of the reasons, is because it's hard to get past the barriers of regulation. You have to build at scale. You have to build at scale. And so this will lower the scale and allow people to build in smaller ways.

Now, I know this is a sort of normie question that you get asked a lot, both of you, I'm sure. I am wondering who's going to live in this city and I'm going to maybe set the table here. So this is a Bay Area project. You have a lot of people living in San Francisco right now. You have a lot of people living south of that, the engineers and whatnot. People want to be where other people are. I think that COVID, if there was any question previously that was totally disproven by COVID. So you have, it seems like a bit of a chicken and egg problem. You kind of have to get critical mass of interesting people to be there in order for more people to want to live there. How do you think about solving the chicken and egg problem? You do have these

powerful network effects in other cities that draw people into them. That's why they want to be there. That's why people maybe prefer in New York City to be in Manhattan rather than Jersey City. And Jersey City, it's like a little train ride away. So what is it? How do you think about that? Yeah, I mean, we start by, I was convinced that this would make sense and this would work because we're not building a new network, we're extending an existing one. And so I'm much more optimistic about this one than about someone trying to build a city in the middle of nowhere in Texas, because we're really extending an existing network. And I think that it's important to keep in mind the proximity point as well. Walnut Creek is half an hour away from the site. And you have a lot of people who work in

tech, for example, who live in places like Walnut Creek or Lafayette and so on. And so we're really gradually extending the network. Now, I think that one of the obvious markets for us is going to be young families. And so if you think about a young family living in the Bay Area who might just, they might be having kids, so they just had kids. You want to stay in the Bay Area, you want to see your friends, but let's say that you're one of the people who I think there's maybe the majority by now who really

want to live in a walkable neighborhood. You don't really have a good choice. Most people can't afford to live in San Francisco, and right now it has other challenges with homelessness and schools and so on. Or you could move to a place like the Peninsula or Walnut Creek or Lafayette, but that's still very expensive, and then you don't have walkable neighborhoods there. Your kids aren't going to be able to walk to school. You're not really going to be able to walk to a coffee shop, or if you are, it's going to be a small number of them. And so as long as we can build a large phase one,

which we think about as a town for 10,000 people that gets built pretty quickly within a couple of years. And as long as we have 10 good restaurants and grocery store and two coffee shops, and one is pretentious and one isn't. And then we have a couple of bars and your kids can genuinely walk to school and the streets are safe and it's fun. And you can buy a home for a price that you can afford. There is 10,000 people in both Solano County and in the Bay Area who want to live there. And then you build on that gradually. Speaking of safety really quick, it got me thinking about the management of the actual city. And I feel silly for not even asking this. Is this going to be run like a standard city once it's built?

Or is it more like a Disney style? Like, is it a corporation running the city? And so, like, I mean, I'm wondering, like, how do you keep it safe? Obviously, Disney can, but San Francisco doesn't seem capable. Yeah, I mean, we will be what you would call an unincorporated community for a long time. And there's a bunch of them in California. So generally, how these new cities go is they start out as an unincorporated community, and they start that way.

And so what that means is the services are provided by the county. And so in our case, the Solano County Sheriff would be providing law enforcement. And the Solano County Sheriff is awesome. And he is the opposite of what happens in San Francisco. And so these streets are going to be safe. I can tell you that. We are, think of what the company does is the company builds the infrastructure. Right. We'll build the wastewater treatment plant, the water treatment plant, the roads, the sewers.

We'll build some of the houses. We'll work with other developers to build the houses and the offices. We're going to operate some of those buildings. But then everything that you would think about as the government and the public services will be provided by the county. And that's the way it works. I mean, LA County has probably a million people living in unincorporated areas of LA County where the county provides the services. And then there's also a model in big parts of California

of what you would call contract cities, which means that you have a city that technically is a city, but it contracts for those services with the county. And so the sheriff provides law enforcement, the fire district provides fire protection services, and so on. I did want to let Devin just answer on the question as well on the network piece. How do you think about it? How has it worked in the past? I think that what Jan is saying makes a lot of sense around it extending an existing network.

I think that is the reason to put it in California is because the network in California is so strong, especially around the Bay Area. And frankly, California is not the easiest place to do this. There are way easier places. Jan really signed up for some hard work here. That's my question. Why then? I do wonder why Cal... I mean, there are other networks, but why... I mean, point taken about proximity to a city, but why this city, given how much harder it seems like it will have to be at the state level? Well, I'll let Jan answer that one. I guess my first pass is California is missing 3.5 million homes.

So there is a lot of demand. People need places to live. California is beautiful. Some of the most innovative companies and projects and research come from around the Bay Area. So I guess to me, that is one of the most natural places. The only reason not to do it in California is because it's hard. Yeah. But Jan, I'm curious what you think.

Yeah, I mean, I think, I mean, for me, this is an ideological project. I mean, Devon said it. I think there's easier ways to make money than real estate development. And within real estate development, you definitely can go places where it's a lot easier to build. But I mean, from the moment I got to the Bay, I loved the area. I think that basically the modern world was invented in the Bay Area for the last 70 years. I think that the world would look very different today if the Bay Area never existed. And it would be a lot worse world. I think it

would be built with very different values. I think we would be nowhere where we existed. And it would be a lot worse world. I think it would be built with very different values. I think we would be nowhere where we are. And I think that, I mean, what struck me when I got here is this combination of talent and creativity and openness to innovation and capital and willingness to fund these new companies. That's happened like seven times in the history of the world, at least in the West, in my opinion. I mean, Florence, Paris, London, New York, Chicago, here, maybe LA. And it's really special when it happens and it just goes away. And it's not clear how many more times it's going to happen.

The idea that we have it here, and then here it happened in a natural paradise with basically the best climate, with Napa and with Tahoe and with the coast and with the natural beauty. It's magic. And then we're going to completely screw it up by not building enough housing? It's outrageous. The whole world is trying to be Silicon Valley, and all we have to do is just build more housing.

That's all we have to do. That's it. I mean, you have billions of dollars of capital. That's all we have to do. That's it. I mean, you have billions of dollars of capital. You have all of the people want to move here. You have all of the companies want to build here. All we have to do is build more housing. That's it. Build housing and transportation.

Everything else is going to take care of itself and we're going to screw it up because we can't agree how to build more housing. It's outreaches. It's like I got here in 2014 and it was within a couple of years, I'm thinking this is on track to be the greatest squandering of economic opportunity in the history of mankind if we don't fix what's going on here. And so like I want my kids to grow up here, so I don't want them to grow up in Texas. A couple of sort of nitty gritty questions that are interesting um to me at least i uh i want to know about water so um where do you plan on getting it from i guess it's like

given you guys eventually want to scale your city to 400 000 residents about um and it's being built on i think like lower quality farmland for the most part uh how is the county thinking about that how are you thinking about that i know water in california is like a hot issue always yeah i mean i think at a high level um the water question in california is um like 50 percent It's 50% kind of optics, 40% politics, 10% actual shortage. And so if you look at water use in California, 94% of it is used for agriculture. The cities only use about 6% of the water. And then a good example of how we're going to get the water is we have an almond orchard on our side that was planted in what the local farmers will tell you should never have been

planted as almond orchard because the soil is not good enough. And so it doesn't actually produce that many almonds. That almond orchard is on about two and a half thousand acres. That almond orchard is on about 2,500 acres. It uses enough water to supply water to 100,000 residents. One almond orchard, 2,500 acres. Yeah, people don't realize it's about almonds. It doesn't even make money today, by the way. It doesn't even make money. And it consumes as much water as a city of 100,000 people.

So we're going to repel the almonds. We're going to make Travis very happy, the Air Force Base here, because they... Tell me about the Air Force Base. That was my next question. I would like to know a little bit more about that relationship. Yeah. I mean, that's another thing that the media gets wrong all the time. So well, I'll start by saying that we modified the plan in response. So there was a big question about encroachment. How close to the base are we going to build? Are we going to protect the base sufficiently? Air Force bases need some buffer zone around them. And so we modified the plan a couple of times

in response to feedback from the base. And the base actually came out with a statement about three weeks ago where they said they appreciated all of their work and us adjusting the plans. And with these adjusted plans, they'll be able to continue flying the full mission. And then more and above,

they appreciated the opportunities to do good things for the airmen and for their families. And so if you look, if you talk to people in the defense community, many of the Air Force bases in the nation, and particularly in California, have two major challenges. The cost of housing in California

is a real problem for retaining these families on military salaries. And then the second one is spousal employment. What is the spouse going to do, particularly when you move every two years? And one of the big challenges in Suwannee County is there's not a lot of good paying jobs locally for anyone, including the spouses. And so just bringing a bunch of good quality housing close to the base and in creating opportunities for spousal employment makes that base a lot more resilient, a lot more able to retain, retain the the airmen and their families. But over and beyond that, this is a really unique opportunity to go back to the roots of what Silicon Valley used to be.

I mean, we started with defense, right? Until 1980, the biggest employer in Silicon Valley was Lockheed Martin. Until 1980. It wasn't just in the 50s. And so I think there's an interesting cultural moment where for a long time, for 20 or 30 years, the Valley didn't do much with the military, as you know. I mean, there were cultural issues and so on. But it's really come back in the last 10 years. I mean, Android and SpaceX,

and now many more companies are doing more in defense. But not a lot of it is getting built in Northern California. I mean, it's Southern California and then elsewhere. And so I think that what we're going to try to do is bring a bunch of that back and build, to the extent that we're bringing tech here, which we are going to bring tech employers out here. We are particularly excited about bringing people who do stuff in the physical world, defense, advanced manufacturing, biotech, agricultural technology. And with Travis, I mean, I think there's a wide recognition now with what's happening in Ukraine and in the world that we don't have the supply chain that we need. We're not able to build stuff quickly enough.

And so there's an opportunity here to build basically a defense industrial base close to the Air Force base. And we have a lot of people who are pretty excited about that. Devin, how would you contrast these efforts with the sort we've seen? I'm blanking now on the project in the islands. Prospera in Rotam. Yeah. I know you've covered both. I would love just to kind of dip into that for a minute. Oh, man. They're totally different. So for some background, what Mike is referring to is a city called Prospera that's being built in Honduras, an island. It's on an island called Roatan that's in the Caribbean. And what they've gotten is close to complete sovereignty, really, from Honduras. And they're able to make their own laws, their own systems. And I think that's a really exciting project.

But I think it's very different from what Jan is proposing. I think that what California Forever is working on is really in some ways, and I mean this with complete respect, it's really not that complicated. You know, we're just trying to build like roads and buildings and like nice places for people to live. It's not trying to like, you know, completely change the political environment or the political structure of the community. Whereas I think what they're doing in Honduras is that Honduras, I mean, to back up a little bit, Honduras is a failed state. It's extremely

dangerous. For many, many years, it had the highest murder is a failed state. It's extremely dangerous for many, many years. It had the highest murder rate in the world. It's full of corruption. You know, the one time I've been there, I was driving on a road with a Honduran and I asked him, hey, like I noticed that half of this road is paved and the other half is not paved. And why? And he said, oh, it's because the mayor right before reelection wanted people to do work on the road. And he said he was going to pay them. But then once he got reelected, he just didn't pay them. And so they stopped working on the road. And so the reason I mentioned that is it's a completely

different context than California. What Prosper is doing is trying to go in and say, hey, the governance here is not working. Let's try to build something else for Hondurans so that they can have a better quality of life and they can actually trust their government. California has its problems, but they are not nearly on the same level. Well, and also, as you've now both spoken to, it's not a charter city in the sense that it's not, it does not have its own separate politics or anything like this from the rest of the country. And I wonder, not I wonder, I know, I know that a lot of the backlash has to have come from maybe a conflation between more

radical suggestions and what this is, which is essentially we're building housing. And if you really just break it down, it's you're building housing in a place that needs it. And it is maybe even the sort of thing that a government that was competent would do itself. Speaking of a government that is competent or not, also, Jan, you've mentioned the failure to build rail for many, many years.

We published about that at Pyrewires. What happens if things get kind of crazier politically in California than they already are? The state could get a lot worse. It could go bankrupt. There are, I think, risks to the state. I know that it's great in terms of all the things we mentioned before. The network, obviously, unparalleled america um the beauty and the natural resources um i agree that this should be the greatest san francisco should be the greatest city in the world it should just

have happened already um but it can't because a lot of these regulations right like what is there perhaps some existential risk there to the community that is worth, I don't know, touching on? Yeah, I mean, I think it's up to us. And I don't say that lightly. And I mean, my interpretation of what's happened here over the last few years is COVID happens and a bunch of people who live in the Bay Area get excited about moving to elsewhere. Texas, Florida, wherever it is. Vegas. And I think what's happened is all of those people have moved and they tried living there and they came back.

For one reason or another, it kind of decided whether it was the network or whether it was other things that held them here. A lot of people came back. And I think for a long time, tech was too busy building stuff to really get into the governance in San Francisco or in California overall or in the Bay Area. But I've been pretty encouraged by people coming back who've said, you know what? I've looked around the other states and there's some good things there, but I like it here. But if I'm going to live here, I'm not going to take the bullshit anymore. If I'm going to live here, I'm going to get engaged. And I'm going to get engaged politically. And I'm going to make sure that we elect people who are sensible middle of the road politicians who are going to run San Francisco and the Bay Area and California in a reasonable way. And we're going to have kind of, we're going to care about many of the progressive

causes but we're going to actually deliver results on them it's going to be politics of results rather than politics of intentions and virtue signaling and all of the bs and so i'm pretty encouraged by what's happening in san francisco i am pretty encouraged what's happening at the state level but i think it's up to us and i think if people want to go and live in Texas and pay 10% less tax, that's fine. But I think if tech actually seriously got involved and decided to make sure that things were governed properly, this could happen in a decade. There's no question about it. I mean, imagine, go back and think about in the 80s about the influence of the oil companies on running the country. I mean, nothing happened in America without- Think about the influence of entertainment

in Hollywood. Think about the influence of entertainment in Hollywood or finance in New York or law in Boston. Exactly. Exactly. I mean, the idea, and think about how big those industries were when they were running the sector. And they basically were able to make sure that the place was run relatively reasonably. We have $10 trillion of market cap in tech, and we can't get progressive agenda in terms of actual progress politically. That's insane. That's crazy. Devin, I'm going to bring you in in one second, but I want to introduce, because we're kind of already touching on the question that i wanted to ask which is exit verse voice and what this is the classic conversation in which you know do you leave a failed city um you know and start something else uh or do you use your voice you try and fix the city and this feels

honestly like a third way this is a related it's like you're not really leaving you are intricately bound to the place but just separate enough to do something very special and helpful to to san francisco and that it relieves housing pressure and things like this um how do you both think about exit first voice uh devin like i know that you're you've been deep in this i've seen you online like how are you thinking about it yeah i mean i i think that that is a good third way and i maybe you could think of it more as a spectrum where, you know, there's the pure voice, I'm not going to move, there's the pure exit, which I'm going to like go to Mars. But I do think that there's a whole spectrum in between there that people don't usually talk about. And it's really powerful. And, you know, despite all the problems in San Francisco and the Bay Area more broadly and California more broadly, it has so many wonderful things going for it. And I think a smart entrepreneur like Jan is basically looking at the landscape and

saying, OK, what is the right balance here? You know, maybe trying to build something in the middle of Pacific Heights. Yeah, you're probably not going to quadruple the density there. Maybe, maybe, hopefully I would love to see that happen, but like that's, that's really hard mode. It's probably not going to happen. But and similarly, like going to the middle of Wyoming, a lot of land, they are a little more friendly to building, but like, there's not a ton of infrastructure to tap into. And when I say infrastructure infrastructure i also mean like human and social infrastructure there's just not a ton going on because wyoming is a very small population state um and so what what does it look like to balance

those benefits and i think solano county is a really interesting approach to that i think it's healthy in the bay to think about the bay Area overall, rather than just San Francisco 14 million people because it's Northern California overall with Sacramento and so on. I think there's the exit versus voice debate, which is one, but then there's the just merits of building more room in this area and then bringing opportunity to a part of the bay that's been left out. Solano County right now, you talk to people and there's definitely a sense of we've been left out and why is that? And could we have more of the great things? Could we have more jobs?

Could we have more good restaurants? Could we have more good shops? And so I think it's just a project where I think the Bay Area needs to start thinking of itself as a region rather than just a bunch of individual cities because it works that way. I mean, it's an economy of 10 million people. People work across it. People commute across it. They have friends across it. In order for us to get the transportation right, we need to think of ourselves as a region. And to what you said, Mike, I think that we can

help San Francisco in lots of different ways. And one of those is we can relieve some of the pressure. Another one of those is we can pioneer some of the things that the YIMBYs have been trying to do in San Francisco. And a good example of that is a simple zoning code. I mean, Devin has written a great series about the initiative. And one part of it is that we are pioneering this relatively simple zoning code

that makes it easier to build. It makes it easier for small builders to build. And that's a hard reform to pass in San Francisco. But if we can get a neighborhood built that looks great and it was built on a short zoning code, it's much easier for the EMVs in San Francisco to go to the board of supervisors and say, hey, this works here. Can we simplify it? Can we do that reform?

And then I think it also applies to the people. I mean, the media tries to frame this narrative of exit. I mean, you look at our investors, many of them are some of the biggest backers of the investment in San Francisco. And so most of them or many of the biggest backers of the investment in San Francisco. Most of them, or many of them, have invested in this project, but they have also spent hundreds of millions of dollars of philanthropic capital investing in trying to improve things in San Francisco. It's really thinking of it as a region and trying to make the region better overall. Part of that is improving the situation in San Francisco and

part of it is building other options for people to live and balancing out the jobs across the region this works you know you guys get exactly what you want um the housing goes up the community is built it's a great success how do you both see this changing the country i mean is there a way that maybe there's obviously a california you were kind of alluding to the california changes that you could see or even the local san francisco changes you could see but do you see this maybe do you see more of this across the country are you yourself interested in doing more of these across the country um what are your thoughts on that last question devon why don't you go first? Yeah. Gosh, I hope so. I think that this could be really an inspiration for people building across the country. I mean, in the US, people are building new cities. They just don't

call them that. They call them subdivisions. And for the most part, they're really badly designed. And they use a lot of land. And they make us more isolated and away from each other. And I think one thing that I really admire about the new urbanist approach, which we mentioned earlier, that I think California Forever is bringing into its project is this idea of what if you could build a city in a way where each person that gets added to it contributes more and makes it better as opposed to exclusivity being the thing that is being sold. Because I think in most places across the country, what gets sold is you're not going to have to deal with any neighbors. You're going to have as big of a lot as possible. You won't even have to see them. And that's great for some people. I'm not saying that that's not the right

some, some people want their peace and quiet and just be completely away from, from other humans. Right. I want that sometimes too. But that is sort of the only option that's on offer right now. That's the only way that you can live in a new community is if you are buying that dream of exclusivity. And frankly, it doesn't scale very well. It uses a lot of land. It's super expensive. The infrastructure costs are astronomical. And it's really bad for the environment. And so if we can build in a new way, then people who are looking for more walkable communities, more communities where every neighbor who comes in might be somebody who's starting a new bagel shop, or who might have a kindergarten

for your kid, then I think that's a healthier way to live. And at the very least, we need to be building some of them. And we're building very, very, very few. So I think this could be a model to be seen across the country. And my hope is that big developers who build all over the US can see what California Forever is doing and change the way that they're building so that their communities can be better as well. I agree with everything that Devin said.

I think it's going to take a little bit of time for us to show that this can be successful before that happens, but I'm hopeful that it will. To me, the other part of it is I am excited about the idea of reopening a physical frontier in America. I think for such a long time, it was a country that was defined by the sense of frontier. I mean, first it was the West,

then space and industrialization and new technologies, and then it was the early internet and tech. And that's remained the case. But I think there's...wood actually was another good one um but i think there's something about a physical frontier rather than a digital frontier that's really important for the collective imagination of the nation if you want and i think there is this malaise of we can't build in the physical world anymore and everything takes 30 years and if we can crack a code on this and show that we can't build in the physical world anymore and everything takes 30 years. And if we can crack a code on this and show that we can still build big things, but also

beautiful things, I mean, to Devon's point about beauty, actually to your point, Mike, about beauty as well, if we can show that we can build beautiful things and build them quickly and have this sense of frontier, I think that would really change the conversation. And there's something really useful about frontiers. They are these new places where experimentation is easier and it's easier to start a new company. It's easier to build a new building. And there's a sense of excitement and wonder

and possibility on a frontier. And I get very excited about that. And that's why I want my kids to grow up here. So that's the one for me. I do think about the earlier critique of just sort of like the shock at the arrogance that it would take to think that you can build something

so, you know, in their mind, ambitious. And it's like, one one it's not that it's not that shocking two it should happen and the fact that you've internalized the idea that it can't is extremely bad for the entire country um and i really hope i just i hope that i know that it will happen because i think it has to happen. I think that that's just where we are on the arc of American history right now. I think that when it comes to urbanization and when it comes to cities and just the insanity of local politics specifically, I think people want things to change no more so than they do in the Bay Area, which is why I'm excited about the

Bay Area right now because it's in a weird way where I see most of the people fighting for something new. Very excited about this. I think it's like the antidote. I think that you get something like this to work and you have consequences across the country. No one can ever say it's impossible anymore. You just point to what works and you say, why not that? Why isn't it as good as that? to what works and you say, why not that? Why don't we, why isn't it as good as that? And there just can't be any excuses anymore. Really excited, thank you guys both for joining. Can't wait to update further as the project progresses.

Thanks for having us. Thanks for having us. Let's do this again once we break ground. Yes, I'll do it from my place in the town. Absolutely, deal. Bye town. Absolutely. Deal. Bye guys. Bye. Bye.