How Homz Is Helping Cities Create “Attainable Housing”

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The U.S. has a massive housing shortage problem. The country requires 3.79 million units to close this gap, according to housing nonprofit Up For Growth’s 2022 Housing Underproduction study.

Luckily, Homz is hoping to begin filling that gap in partnerships with cities across the U.S.

Homz is a national company dedicated to creating community-focused housing at attainable price points. This includes creating various complexes to fit family and roommate needs and neighborhoods that incorporate green space, schools, hospitals and other community infrastructure.

Homz communities focus on meeting renters at each stage of their lives with four different rental models: UP for students, 24 for “value-seekers,” NJOY for smaller floor plans and LYF for larger families or roommates who require three or more bedrooms. Each Homz complex also offers 54 publicly available amenities, including playgrounds, urban farms and forests, according to a company press release.

“We are not a development company,” Homz’s managing director Dipika Patel says. “We are a community creation company.”

“Attainable Housing” Is The Future

Most of the discourse around housing right now focuses on affordability. This makes sense considering that rent continues to increase year-over-year. But Patel says that housing has four major issues: accessibility, availability, attainability and affordability.

Patel says Homz wants to help make housing more “attainable” by bringing the four issues above into every community it develops.

Patel knows how important these issues are because she has been on the ground for three years, working with cities to make Homz work for their unique needs. Homz is not able to publicly disclose which cities these are at the moment.

Integrating Accessibility Into Housing

Transit deserts are a major problem in U.S. cities. This means that people can’t often commute from where they live to where they work, receive healthcare or go to school. Often, these transit deserts are located in poorer, racialized neighborhoods.

Homz’s integrated communities help cities address this problem, creating not only community, but jobs. Homz employs locals to build its communities, as well as locals and transplants to work at the schools, hospitals and museums located nearby, according to board member Kim Diamond.

Further, the communities are well located, providing convenient access to everything residents will need. On average, it will take seven minutes to get from the communities to essential services like grocery stores and pharmacies; 15 minutes to get to social services like schools and hospitals; and 30 minutes to get to cultural and economic centers like central business districts, museums and convention centers.

Municipalities across the U.S. are using housing as an incentive to bring workers, such as teachers and public servants, to their cities. So, Homz could help bring in new, desperately needed workforces to communities across the country.

The large number of people living in a Homz community will create a demand for retail and restaurants, further stimulating the local economy and adding to the tax base, says Diamond.

“It helps with the overall growth and development of the city itself,” she adds.

Available Housing Requires Scalability

In the U.S., 230 metro areas have experienced increased housing underproduction since 2012. That’s why Homz is using a scalable model to bring 50 developments to the country over the years ahead. Every community Homz creates will have a consistent design standard, taking a page out of the hospitality industry playbook, where chains like Marriott and Hilton have a uniformed brand and consistent design across their different hotel concepts.

This consistency will help Homz to unlock efficiencies, including a faster development process and cost savings that can be transferred to residents in the form of attainably priced apartments. What’s more, residents will know the quality of their experience will be similar at any Homz community in the country, which creates even greater brand recognition and loyalty as residents move.

“Why can’t you build one community, one place, make it successful, and then go to the next to continue expanding the concept?” Patel says.

The Homz team has the unique skill set to build quickly and at scale. A company press release details the team’s backgrounds: Patel herself previously served as president and CEO of Hayden Holdings, a hospitality investment and management company with real estate assets valued at more than $250 million. Diamond also comes from a real estate background. Homz’s other managing director, Lakshmi Narayanan, invests in and builds real estate assets and startups in the U.S., Asia, Europe and the Middle East.

Homz expects to invest between $140 million and $170 million in each community. The company plans to secure financing from the Department of Housing and Urban Development.

Attainability and affordability go hand-in-hand

Patel tells Next City that developers often face increased property taxes with their buildings. This happens because as a building’s value increases, the city raises the building’s property tax and that cost goes into rent increases. In response, developers may face “immense pressure” to raise the rent.

Patel adds that developers can make a significant profit selling a building five to 10 years down the road. So, there’s little reason for them to care about how the building benefits the city long-term.

Homz has found a new business model to fit with its triple bottom line mandate. Instead of selling after five to 10 years, the company will remain invested in and actively manage each mixed-use community for 20 to 25 years, returning the development to the city at the end of that term, according to a company press release. The land will be valued higher at that point, and the city can either sell it for a good price or keep it without cost.

In return, Patel says that Homz receives “tax holidays” so that its property taxes are waived or stay low over its hold period. This means Homz can keep rents attainably priced, without the pressure to increase rates in response to rising taxes. This creates significant value for residents, communities and municipal governments.

“Co-creating public value goes beyond just economic development, it’s about social development,” Patel says.