The Billionaires’ Secret Plan to Solve California’s Housing Crisis

from New York Times I'm Michael Babar. this is the. [Music]. day for years a mysterious company has. been buying Farmland on the outskirts of. Silicon Valley eventually putting. together a plot twice the size of San. Francisco but at every step Those Behind. the company kept their plans for the. land shrouded in secrecy until my.

colleague Connor dhy figured out who. they were and what they were up. [Music]. [Applause]. to it's Monday March. [Music]. 11th so Connor this Story begins as a. real estate mystery that you took it. upon yourself to to try to crack wide.

open so tell us about where this mystery. unfolds okay so if you imagine you're in. San Francisco and you drive north. further up into the Bay Area into an. area called Solano County and then you. go Way East and you end up in this very. rural corner of the Bay Area that not a. lot of people know about and it's over. here in this rural corner of Solano. County where our story takes. place and it's these open sort of.

rolling landscape of yellow Hills with. almost nothing on it the largest. structures there are wind turbines and a. lot of the families out there are. farmers they farm sheep feed crops and. cows and many of the people out there. have been there since like the 1860s. this is a place where families stay in. the same place for generations and pass. the Farms down several times this is is. a place where not a lot.

changes but then in 2017 something very. unusual starts to. happen a company called Flannery. Associates which nobody in the area has. ever heard of starts buying land and. they buy more the next year the year. after that the year after that more and. more and more and more until pretty. quickly they're the biggest land owner. in the entire County H so all these.

neighbors are at supermarkets they're at. church they're at schools that I mean. this is a place where everyone knows. everyone they're all on community boards. together they all talk to each other all. the time they all sort of simultaneously. get these offers for their land right. and like you said they don't even know. who the offer is coming from all they. know is that a very aggressive as we say. in New York highly motivated buyer is in. their midst exactly highly motivated. buyer so.

they not only want everyone's Farm they. start offering people these incredibly. sweetheart deals which say okay well I'm. going to buy your land but you can stay. there for the next decade or two. depending on how old they are and for. all that time you can collect all the. income from this land I don't even want. the income of the land so one thing. everyone realizes pretty quickly is. these people are not interested in. farming cuz if they wanted to farm they. would kick the farmers off the land they. had just spot or they would want to make.

money from farming like they don't care. about the price that reflects the income. and they don't even care about. collecting the income so they very. obviously have a plan that has nothing. to do with farming and so the question. is what's the plan and who are these. people right so then the county starts. to get curious who this is but because. this flry Associates is Incorporated in. Delaware which has some specific rules. that kind of cloak who is behind a. company nobody can figure out who they.

are and they send a bunch of letters to. the company Flannery Associates lawyer. and this lawyer kind of just puts them. off and says oh don't worry about it. this is a group of wealthy families who. are looking to diversify their assets. and they just want to park it in. Farmland basically H local Mayors. concerned citizens are going down to the. libraries and pulling property records. and you know looking up corporate llc's. and stuff to sort of try to figure out.

who is behind this mhm the county. becomes very concerned about what is. happening here there's this massive. information vacuum and people start to. fill. it we're talking about Solano County. where the single largest landowner is. now an LLC based in Delaware the group. Flannery Associates has acquired tens of. thousands of Acres of dry Farmland. equivalent to nearly double the size of. San Francisco and no one knows why so. what whatever they are I know what they.

aren't they aren't buying carbon credits. you know they have intentions that are. outside of our usual land use ideas. that's what makes it scary I guess is. that we don't we know nothing about them. now there's an important detail here. that I've sort of left out which is a. mysterious purchase of dry Farmland near. Travis Air Force Base one of the most. critical military bases in the western. USU has raised serious. questions all of this land is near and. surround.

Travis Air Force Base which is a very. important Strategic Air Force Base. sometimes called the gateway to the. Pacific and the concern is that a. foreign actor of some kind spies. basically is buying up a bunch of land. around an Air Force Base that it may. very well be Chinese money with a goal. of surveilling it or something like that. for a enemy to be able to be right next. to the base to monitor to listen into. the communications it would certainly be. possible to do that if you own the land.

adjacent to the fence line of Travis Air. Force Base there's never any evidence of. all this but because of where the land. is situated around this base right it's. a somewhat Reasonable Suspicion yes so. by 2023 members of Congress all sorts of. people are flipping out the defense. department starts investigating this the. FBI starts investigating this the state. department starts investigating this all. of these agencies are.

investigating who is behind this company. you know just anything you can come up. with people have thrown the idea out. except for what it turns out to. [Music]. be so I cover housing here and this was. a little off my beat but I was very. interested so I started looking into it. a little bit and made a couple calls but. I didn't turn up much then one day.

pretty much out of the blue I get a. message and I can't exactly say where or. how or from whom H but someone tells me. I know what this is tantalizing this. isn't some group of Rich families trying. to park their cash in Farmland like the. Flannery Associates lawyer implied this. is at least according to this tip some. of the most powerful people in. technology Venture capitalists. Executives from Silicon Valley.

buying this land and they're trying to. round up other investors to join them. huh so now you have a theory about who. is buying this land it's a bunch of. really rich Venture Capital types from. Silicon Valley but at this point you. don't really know if that's actually. true totally and as you know you get a. lot of tips as a reporter some of them. sound quite extraordinary and turn out. to be nothing but for various reasons. that I can't get into I sort of knew. this had to be worth checking out mhm so.

I call basically you know everyone I've. ever met I mean I'm kidding but I start. just blitzing the phones right I am. sitting there texting calling just. trying to find anybody who might know. anything about this in this kind of. Nexus I think the technical term is dog. with a bone yes so then I started. working with my colleague Aaron Griffith. who covers Venture Capital mhm and. eventually through a ton of reporting we. were able to conf affirm that yes in.

fact the money behind Flanery Associates. was a who's who of Silicon. Valley Loren pal jobs the Widow of Apple. co-founder Steve Jobs Mark Andre very. famous venture capitalist from Andres. and Horowitz right Michael Moritz. billionaire venture capitalist from a. company called seoa Capital Reed Hoffman. co-founder of. LinkedIn some of the richest people on. earth. are actually the ones buying all this.

farmland and the craziest thing is what. I learned their plan was to take all. this land an area about twice the size. of San Francisco on this Farmland. building totally from scratch a brand. new city that they hoped would help. solve California's housing crisis and. beyond that create an entirely new model. for building communities in this.

[Music]. [Music]. country we'll be right. back so what do you end up learning. Connor about the specific plan that all. these rich folks have for this model. City that they want to build on this. farmland. so this whole thing I learned is the.

plan of a guy named. Yanik and who's that Jan shik is an. interesting guy he's originally from the. Czech Republic and in his telling he. grew up in this Tiny Town of a thousand. people but he's this very precocious. entrepreneurial young guy according to. him he brought internet to his town and. actually cut a side deal for himself to. get money for this is always looking for. an angle and with the help of different.

scholarships he studied at Cambridge. goes to the London School of economics. and becomes a star Trader at Goldman. Sachs he leaves Goldman Sachs and. eventually makes his way to California. where he does several startups that have. a pretty mixed record of success and one. thing to know about Yan is that he's. really enamored with the culture of. Silicon Valley he loves the startup. thing he loves the feeling of the way. people in Silicon Valley try to blend.

this kind of philanthropic message with. capitalism that we're saving the world. and we're going to make a bundle doing. it like this whole sort of spirit of. Silicon Valley all of this appeals to. him but there's one thing he really. doesn't like especially being a a. European he hates the. place he likes the culture but he hates. the physical Place hates the physical. place now if you've ever spent time in. Silicon Valley it's really not a very. remarkable place it's very sprawled out.

you go to like Sand Hill Road which is. where all the biggest Venture. capitalists are and it's like this like. kind of crappy office complex there are. of course some very beautiful wealthy. neighborhoods but a lot of the housing. stock is he these kind of called the. sacki whatever you would sort of you. know stereotype as the kind of American. suburb it just feels like that so not. only is he sort of uninspired by this. very low density landscape there's a. huge housing crisis in California at. this time and not only is a huge housing.

crisis there's just a ton of conflict. over whether or not the state should. build more you know how it should build. it's just a big fight over basically. whether to even solve it so he is coming. to this all very fresh you know the idea. that there's this place where people. start big companies and investors give. young guys millions of dollars to chase. their crazy idea I mean this just seems. like paradise to him and allowing more.

people to move here you know building. tons more housing building great. buildings that's what he thinks should. be happening got it so his argument. basically is that a place as magnetic. and energetic and influential as the Bay. Area as Silicon Valley deserves a. physical Community worthy of all those. qualities that does not exist in fact. it's the opposite yes 100% now that. feeling that Yan's expressing that.

Silicon Valley in San Francisco can do. better that it's become too hard to. build in California that this vibrant. place has gotten stuck that feeling is. shared by a lot of very rich and. powerful people in particular in the. venture capital and Tech Community there. is this very deep frustration in that. world that as much influence as they've. had on the digital world they've had. very little influence on the physical. world I mean these are people who grew.

up dreaming of flying cars and you know. monals through Sim City Landscapes that. sort of thing and yet they live in this. strip mall office complex culdesac. suburb and because of the politics of. the state it's almost impossible for. them to change that people talk. constantly about this and Yan at this. point is extremely well connected he is. friends with billionaires he's in a book.

club with some pretty high powerered. Venture capitalists so he puts together. a plan for a new community in eastern. Solano County one that lives up to his. vision and one that he brings to these. people and eventually he's got almost a. billion dollars to pursue this idea of. building an entirely New City from. scratch out in this rural area so Conor. what happens once you and the times. break the story and tell world what's. really going on because it's been so.

secretive and mysterious until that. point so within an hour or two of us. breaking the story Yan's LinkedIn page. reidentified and California forever has. taken its place it's a whole new company. with a whole new name and a very. friendly face and not only that is as. public as you can be you know it goes. from black box that nobody can get in to.

a company that has opened four offices. around Solano County so that you can. walk in and go hey how are you doing. what's this project and learn about it. and see maps and talk to people about it. wow a company that has put Billboards. all over the 8 freeway on the way up to. Sacramento saying California forever so. they've gone from nothing to you can't. stop hearing about them well what. exactly are they saying once they decide. to acknowledge what they are Rebrand. themselves and start having what sounds.

like the beginning of a conversation yes. with the people in this County so. because of county law they cannot build. this city unless they get a vote of the. people ah right California is among. other things land of the ballot. initiative exactly Solano County has a. rule that says you can't build in the. rural areas and that's because they want. to preserve these Farms just as they've. been for Generations so at the start of. this year California forever filed a. proposed ballot initiative that would.

undo that and pave the way for them to. eventually build this. city and the hope is that this. initiative would go before Solano County. voters in. November good evening good evening. everyone thank you for being here how. how's everyone doing tonight great thank. you for coming they have to go on this. massive charm offensive because not only. do they have to eventually convince. elected official and all these people to. give them know permission to build thank.

you for coming out and learning about. this California forever project you've. been hearing it a lot about it in the. media and we're here to get your. questions answered we know everybody's. got a lot of questions so they have to. get the whole County to vote. affirmatively for this project so uh Yan. take it away so Yan goes from nobody has. heard of yan to he's everywhere in the. county he's meeting with elected. officials he's meeting with you union. leaders um good evening everyone thank.

you for coming to introduce myself um. you might be asking yourself why is this. guy with a funny accent here and then he. starts having a series of public town. hall meetings in all these different. cities across Sano County this. acceleration in home prices and pushing. of particularly working-class families. out of California has been building up. since the 80s and he just begins. pitching people every 5 years it gets. worse and it gets worse and it gets. worse and it gets worse and the pitch. really begins with all the huge problems.

California is facing right now and so. where our project times in together with. this is that we do think that we need to. revisit some of these ideas and we need. to look into if our kids are going to be. able to live in California if California. is going to be a state that does. something about homelessness if. California and he really says I have an. answer to what is ailing us we need to. build again we need to think big again. that this is what California need needs. to essentially shock itself out of its.

current malaise um new community homes. in safe workable neighborhoods good. paying local jobs locally owned shops. and businesses big employers make it big. enough to be an economic engine for. everyone make it big enough he says. we're going to build roow houses with. bike lanes and a dense city with a bus. running around the perimeter of it where. you can walk to shops it basically. describes Brooklyn where you live or. you're sitting and we went out and uh we.

found a group of investors who wanted to. double down in California and who. believed that if you could purchase. enough property that you could design a. project that was designed in a way that. it made everyone around better and. eventually this city they hope will have. 400,000 people living. [Music]. there a from scratch fully envisioned. dense L constructed Community where you.

go to work you go to the theater you do. your grocery shopping all within walking. distance of your row house which is. attached to another house which is. exactly the kind of dense style of. living that urban planners say we should. be having in this country more of it not. less of it. exactly Conor all of this sounds. eminently reasonable that I wonder why. Yan approached it from the beginning. with so much. secrecy and mystery because that doesn't.

feel in keeping with the spirit of what. he is talking about here yes well pretty. simple answer there money what Yan will. tell you is that they were worried that. people would jack up the prices of the. land if they were public yes that if. people out there realized that the. richest people in the world had a plan. to buy all this land they would start. raising the prices got it but at the. same time it created a ton of Suspicion. in this community and on top of that.

it's possible some of these Farmers. might not have sold if they would have. known what the plans were you know many. of these people have a a very deep. connection to the idea of this as an. agricultural Place well to that point. what happens once the public and all the. farmers who have sold their land learn. precisely what the plan is and what they. have sold their land off to become so. people are incredibly unhappy about it.

so I go to the town hall and right off. the bat my question is where are you. making your money because it comes. across like you're doing a big favor for. all of us to build this but I know. you're looking for a bottom line so I'm. curious people contend that this is just. a plan to get rich if you get your way. you will get to build this giant City. and the land you bought for not very. much money will suddenly be worth. astronomical amount more and these. people who are already billionaires are. just going to get richer I am one of the. 43 individuals that has been named in.

the lawsuit because I own 200 acres of. land as they acquired the land they also. used some pretty significant Strongarm. tactics such as suing Farmers many of. whom were in a lawsuit with them during. the town hall will you commit to. dropping the lawsuit against the local. farmers who are not aligned with your. vision in a good will attempt to change. the way that you are interacting with. our community which is right now. unacceptable at one point this family. rose up and one after the other started.

saying you're suing my family. flanner California forever's. divisiveness and deception are very well. documented then there's the more obvious. thing people say which is how do you. expect anyone in this room or the county. to believe what you are saying how do. you expect this to trust you after. you've been basically lying to us for 7. years I would like you to explain. further why you look at farmers who land. is more important to them than your.

money why we are a. [Music]. problem this is a rural area and does. not want to be a city they have remained. here because they like being farmers and. they like being in a small town where. everyone knows each other and that is. the way of life to which they are. accustomed and many of these people will. tell you I know California has a housing. problem they are aware that there are.

big cities not too far from them and. that they have significant. troubles but what they're saying is this. is Farmland if you want to sort of solve. San Francisco housing problems like. maybe you start in San Francisco right. no one there seemed particularly happy. about it right which does not seem like. a great sign if as you said earlier. Connor what California for needs most is. to hear from this community that it's. willing to vote to let this city get. built yes people are very skeptical of.

them and i' I've even heard people who. are you know sort of more kind of. seasoned political people saying it's. very hard to trust them right now and if. I'm going to give them all this. affirmation in the form of a vote I need. to be pretty confident that they're. going to do what they say they're going. to do I mean there's a real irony here. which is that California forever thought. that the best way to. circumvent all of the normal screaming. and yelling and Community opposition and. bureaucracy and nimbyism of Big City.

California was to escape to rural. California and try to build a brand new. model of Housing and Urban living there. and they ended up unleashing a different. but it sounds like no less Fierce. version of all those same forces just a. couple hours outside the city exactly. and I think they probably knew that. would happen and I think in a weird way. this is what they want what do you mean.

why do they what do you mean they want. it I think in their mind it's almost. easier to build a city than it is to. build a duplex I think they would rather. have one big gigantic knockdown drag out. expensive fight H and then if they get. approval just build the city you know if. you think about it the problem in San. Francisco is that they fight over every. little duplex they fight over every. little apartment building and I think.

they're sort of like okay let's do this. once let's have it be as Furious and. expensive as it can be and if we get. over that. hump then we can build a city that they. hope one day will have 400,000 people in. it and I think they've calculated if we. do this on this scale it'll be too big. to fail this is fascinating this project. is almost ideological for. Yan he knows that there's a huge. distrust of Silicon Valley and. billionaires and that many see his.

approach as huis he's totally aware of. all of. this but this is a state that built the. Golden Gate Bridge and went from a. little Frontier Town to the largest. state and the fifth largest economy in. the entire world and I think there's a. feeling that it's forgotten how to do. those big. things and I think what Yan would tell. you his argument is somebody needs to.

revive this Spirit somehow we need to. get. Californians excited about big things. again and if it's not this then what is. it and if it's not them then. [Music]. who well Connor Thank you very much we. appreciate it thank you. Michael.

we'll be right. back here's what else you need to know. today the justice department has begun a. criminal investigation into the midair. blowout of a panel on an Alaska Airlines. flight that forced the plane to make an. emergency landing in January Federal. investigators have suggested that Boeing. may have delivered the plane to Alaska. Airlines without installing the bolts.

necessary to hold the panel in. place and in an interview over the. weekend with MSNBC President Biden. delivered some of his harshest words to. date about Israel's deadly military. strategy in Gaza and about the man. leading it prime minister Benjamin. Netanyahu he's hurting I my view he's. hurting Israel more than helping Israel. by making the rest of the world it's. contrary to what Israel stands for and I.

think it's a big mistake so I want to. see a ceasefire in the interview Biden. was asked if there was a point at which. netanyahu's actions would compel the US. to cut off military aid to Israel but. there's red lines that if he crosses in. the he cannot have 30,000 more. Palestinians. [Music]. dead today's episode was produced by. Ricky nety Michael Simon Johnson Eric.

krupky and will Reed it was edited by. Mark George fact checked by Susan Lee. contains original music by Chelsea. Daniel Mar Lozano Diane Wong and Rowan. nisto and was engineered by Chris Wood. our theme music is by Jim brunberg and. Ben lansburg of. [Music]. wonderly.

[Music]. that's it for the daily I'm Michael Boro. see you. [Music]. tomorrow.