The United States faces an exacerbated affordable housing crisis due to a surge in mortgage interest rates and low inventory, disproportionately affecting lower-income families. Simply Homes, a Portland-based startup, is addressing this issue by purchasing single-family homes in blighted neighborhoods, renovating them, and renting them out to very low-income families, the elderly, and disabled individuals, including Section-8 voucher holders. Recently, the company secured $22 million in funding to expand its efforts.
CEO and co-founder Brian Bagdasarian emphasizes the uniqueness of Simply Homes' approach, distinguishing it from other iBuyers primarily focused on middle to upper-class neighborhoods. The startup aims to provide well-maintained affordable homes to those in dire need, challenging the common trend of home builders constructing properties unaffordable to those requiring affordable housing.
Simply Homes, founded in 2020, has rapidly grown its portfolio to 108 units by renovating homes and utilizing the Housing Choice Voucher (HCV) program. More than 80% of its tenant base consists of single parents, paying no more than 30% of their income for rent. The company currently operates in Pittsburgh, Pennsylvania, and Cleveland, Ohio, with plans to expand into Baltimore, Maryland, and various Midwest markets, focusing on stable housing markets.
Operating under an operating company/property company structure, Simply Homes combines technology and operational teams for property acquisition, renovation, and management. Bagdasarian attributes the company's resilience to high-interest rates to its early consideration of worst-case scenarios in underwriting. The stability of income through the Housing Choice Voucher program contributes to the company's predictability and profitability.
Simply Homes plans to utilize the newly acquired funding to expand into new markets and develop AI-powered virtual analysts for data interpretation. Gutter Capital and Watchung Capital co-led the recent funding round, expressing their belief that Simply Homes is addressing a critical aspect of the housing shortage by rejuvenating aging housing stock and making homes available to those most affected by the affordability crisis.