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 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.
“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.”
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.
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.
“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.