St. Petersburg has a new weapon in the ongoing fight to address affordable housing – homes built in a factory.
Austin-based Amherst Holdings is one of the nation’s largest owners of rental homes. According to its website, the company has acquired over 46,600 homes across America, worth over $7.6 billion. The full-service real estate platform is expanding its footprint throughout Tampa Bay, including a partnership with the City of St. Petersburg to increase the affordable housing supply through its Studio Built Homes division.
The city’s Workforce Housing Density Bonus program enables Amherst to convert vacant lots into affordable housing, utilizing a modular home construction process, while keeping rents below market rates for 30 years. On Tuesday morning, the company invited city officials to tour some of Amherst’s Studio Built homes under construction in St. Petersburg.
“What we’re doing here today, what problem we’re trying to solve is to create an affordable, scalable supply of housing for cities,” said Vice Chairman Spencer Lindahl at a construction site on 4th Avenue South.
“That have an aged inventory that was constructed years ago en masse and now needs to be reconstructed in a scalable and repeatable way.”
Lindahl explained that about seven million people acquired homes they could not afford during the subprime mortgage crisis that began in 2007. Realizing those people – many with default now on their credit – would still need somewhere to live, Amherst began buying homes to offer as affordable housing rentals.
In recent years, Lindahl said his company encountered the acute problem of vacant real estate. With the cost of new home construction soaring, Genger Charles, managing director for Amherst, said the platform is trying to fill supply gaps in the rental industry through an innovative building process that can provide housing in just over a month.
Charles said the average Studio Built resident is entering their prime household formation years, possesses high student debt and typically cannot qualify for a mortgage. She said Amherst is trying to create solutions for those people seeking a single-family household experience at an accessible price point.
Through St. Petersburg’s workforce housing initiative, Amherst can offer two-bedroom duplexes and three and four-bedroom homes for those making between 80-120% of the area median income (AMI) at affordable rates for a 30-year minimum.
“Which seems like something we wouldn’t necessarily want to do from a mathematical equation,” said Charles. “But the reality is we want to be a part of the communities in which we operate.
“We know that there are needs that the market may not directly fulfill and that subsidies through the public housing authority and elsewhere may not fulfill either …”
Ed Gleeson, a Tampa resident and vice president of construction for Amherst, proudly showed attendees the innovative building process that reduces the cost of construction.
Gleeson said residents occupy 26 of Amherst’s Studio Built homes in St. Petersburg, with another 25 in construction and 22 in the permitting process. Gleeson noted it typically takes six to nine months to build a house.
“We’re going to have this thing up in two days,” said Gleeson as a large crane lowered the bottom portion of a duplex onto the lot at 3165 4th Ave. S. “And it takes us about another 30 to 45 days to finish it and put a resident in it.
“That’s part of the magic of building it in a factory.”
Amherst recently acquired a factory in Texas that will produce 50-60 houses a month when fully operational, said Gleeson. The duplex Amherst is erecting on 4th Avenue comes in four parts – two for each floor, followed by the roof.
Gleeson said it costs about $20,000 to ship the pieces from North Carolina to Florida. Amherst also utilizes a partner factory in Georgia, and Gleeson said the company plans to open a factory in Florida to support its expanding footprint in the state.
“If I put a factory closer, obviously, that cost goes way down,” he said. “And that goes right into the economics and underwriting of the home.”
In addition to Tampa and St. Petersburg, Amherst also operates in Orlando, Jacksonville, Ft. Myers and Palm Bay. Gleeson said the company owned just 20 properties in the state a year ago. Today, that number is close to 180, and Gleeson said Amherst would own 600-800 properties in Florida by the end of the year.
Gleeson called the property on 4th Avenue “awesome” because it allows Amherst to construct multiple homes side-by-side.
“If I can place a crane and set multiple houses – boom, boom, boom – that’s cheaper as well,” he said. “It’s all about the bottom line of how quickly and how cheaply I can put these homes together and service our residents.”
While the modular homes are quicker and cheaper to construct, Joe Butler, head of Studio Built, said they are also of higher quality than most other houses. He added that factory workers build the homes in a controlled environment with 10 times the number of quality control checkpoints and more structural material.
Butler also noted the structures never experience sunlight or weather until unwrapped at the construction and set on the foundation.
“This is also built to the international building codes,” said Lindahl. “This is not HUD code. These units are built to the exact same standards as if someone were to build it on site.”