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Texas company brings ‘innovative housing’ to St. Pete
On Thursday morning, crews steadily raised a modular single-family home into a poured foundation at 3171 4th Ave. S. It’s one of the many sites real estate company The Amherst Group has purchased in South St. Pete.
“Amherst is a U.S. innovative housing solutions provider. For more than a decade, we’ve been investing in single-family homes for rent,” said Spencer Lindahl, vice chairman of Amherst.
Several years ago, Amherst, which owns over 44,000 rental homes in the country, launched its build-to-rent StudioBuilt arm of the business.
The division focuses on modular construction. It manufactures the components of homes out of its main hub in Cuero, Texas, and delivers the pieces to the permanent site.
The front entrance and porch of the home at 4435 15th Ave. S.
The modern-finished units, such as the 1,522-square-foot, three-bedroom unit at 4435 15th Ave. S., are on the market with rental prices starting above $2,000 per month, which is below market rate.
One of the bedrooms inside the home at 4435 15th Ave. S.
“We’ve found that a lot of cities have scattered site areas that have casualties of housing stock. Over the years, the sites have become vacant land. We found that regional, national and custom home builders would not pick up these lots,” Lindahl said.
“The main reason they won’t take these lots is because it’s not productive to them for hitting their economics – they need 200-plus homes to develop versus single lots. From a location and characteristic standpoint, it was a natural addition for our strategy to pick up these lots and build rental properties.”
The kitchen inside the home at 4435 15th Ave. S.
In 2020, Amherst hit a bump as the pandemic essentially paused permitting processes; However, the company has since made more acquisitions.
Amherst recently secured a nearly $500 million mortgage loan and over 20 properties in Pinellas County.
Last year, the full-service real estate company team said it had entered a partnership agreement with the City of St. Petersburg to increase the affordable housing supply.
“What kicked us off is we bought a 30-home bulk from a seller in St. Pete,” Lindahl said.
One 10-year-long resident called Lindahl on his personal cellphone, claiming that the previous owner did not address serious plumbing issues and other infrastructure safety needs. She feared by complaining to the owner, potentially igniting a legal battle, she could be threatened with eviction.
“For us to buy a house at a $70,000 price point and then spend $35,000 to $40,000 to fix plumbing issues, it doesn’t make economic sense. This is where our strategy has evolved. We could build a new house with a longer lifespan,” Lindahl said.
The resident was relocated to another Amherst-owned home around the corner. A month later, Amherst moved her into the new home. The team worked with the housing authorities to suspend payments for a month, and her voucher was valid when the house was ready.
“Our homes are built to meet the exact building codes of the city and location,” Lindahl said.
The units can take less than a month to piece together onsite.
A full bathroom inside one of the St. Pete units.
Amherst typically seeks out vacant properties or that are below a certain price point; oftentimes, it results in lot portfolio sales. “Our initial business plan was connected to opportunity zones. We are still looking to build anywhere that makes sense economically. We are predominantly doing this through the private sector,” Lindahl said.
Another Amherst-built unit in South St. Pete. The units have mirrored exterior and interior designs.
“We would love for the City of St. Pete to see us as a holistic housing solution for affordable and workforce housing. The structure we historically considered as typical housing in our culture with multigenerational homeownership is changing,” Lindahl said.
“Today, we often will see one person who wants to rent a house with three to five people subletting from them. We typically don’t accept sublets.”
However, Lindahl said Amherst asks eligible residents over 18 to be listed on the lease, and the team would qualify each applicant.
Today, Amherst manages $17.3 billion of assets and has renovated over 55,000 homes, according to the company.
Lindahl said the company plans to build a manufacturing hub in Florida next year. It has partnerships with other facilities in the Southeastern U.S.
Stew
September 22, 2023at3:31 pm
They dropped one down the street from me. Doesn’t fit the neighborhood character at all and has been vacant since 12/22 starting at $2660/month now down to $2130/mo with the grass recently up to your knees. Our neighborhoods need owner occupants, not rentals.
Jim Murphy
September 22, 2023at10:56 am
The innovative part is that while most investors focus on large multi-family with ROI’s of 6%, this firm has found a method to manage a dispersed single family rental portfolio at margins exceeding multi-family. By vertically integrating the supply line and using factory assembled houses, they have probably lowered their cost to $175K for a single story. Add in $50K for the land purchase price (they bought several 8 years ago when they were much cheaper) and the $2,100 monthly rental income creates a gross margin of 11%. Multiply that 11% ROI by $5Billon and that’s their business model.
Lynn
September 22, 2023at7:52 am
A Texas company placing manufactured homes on empty lots is not innovative. It’s contrary to what our city needs. It means these are forever rental units and all rental dollars goes to Texas. The opportunity for home ownership no longer exists. The dollars are not used in our community. No, this is not what we need and is not innovation.
Morris Ron
September 21, 2023at10:28 pm
Let’s here from someone who is looking for a reasonable home to rent on a limited budget… I’ll bet they’d jump on one of these… 2,000 for a home is going rate locally – what’s available in large part, at this price point is generally shabby and minimally maintained. The are brand new homes – built to codes written to withstand extreme weather.
Pamela
September 21, 2023at7:37 pm
When did over $2,000 rent become affordable housing? I’m so sick and tired of being perceived as stupid. Between Duke’s ridiculous rate hike and “affordable housing”, I’m truly sick and tired of it.
Steve Sullivan
September 21, 2023at7:21 pm
And, I hope you are involved politically. The Florida Legislature has been robbing the Sandusky fund for 20+ years to pay fors that had nothing to do with housing. They stole billions and are still doing it. Now ask yourself which political party has been running Florida all that time. We could have had tens of thousands of homes by now and not had such great inflationary pressure in the market
Steve Sullivan
September 21, 2023at7:10 pm
Ms Lowe those are horrible and will look like crap in five years and good luck getting finance and reasonable insurance on that structure
P Thomas
September 21, 2023at7:02 pm
Wow. At this price point, this is NOT a solution for low income families living in the area, and does not remedy the immense problem of displaced and homeless families that have increased in numbers in Florida since the pandemic. And these developments offer no possibility of home ownership for lower income families. What is the sense of building homes in the community when many in the community cannot afford them?
S. Rose Smith-Hayes
September 21, 2023at6:35 pm
$2000 a month to rent??? How much to buy??? This does not create stability nor home ownership.
Linda Lowe
September 21, 2023at3:44 pm
I don’t think there’s anything wrong with modular housing per se assuming that it can withstand hurricane force winds, but instead could it be a way for lower income residents to purchase housing instead of renting. Neighborhoods full of rental units do not make for stability.