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V O L . X X X N O. V § 2 M A R C H 4 , 2 0 2 4 20 F O C U S I N N OVAT I O N So far, Simply Homes has used its platform to acquire roughly 150 homes in Pittsburgh, Cleveland and Indianapolis. e company's goal is to expand into five additional mar- kets by the end of the year, primar- ily in the Midwest. e model wouldn't work in all markets, Bagdasarian says. You won't likely see it expand into high-priced areas such as Boston, Los Angeles or San Francisco. Still, there are plenty of major cities — roughly two dozen — that Simply Homes already has identified as excellent candidates for expansion, he says. ose include Baltimore, St. Louis and others. e company differs from other algorithmically driven institutional homebuyers, often called instant buy- ers or "iBuyers," which often drive up home prices in the neighborhoods where they operate by buying, ren- ovating and reselling large numbers of homes, Bagdasarian says. "I hate the term 'iBuyer,'" he says. "We're not a flipper. We hold onto our stock." Economic mobility Simply Homes chooses markets in which there are long waiting lists to move into rental properties that qualify for U.S. Housing and Urban Development housing choice vouch- ers, also known as Section 8 vouch- ers, Bagdasarian says. e housing choice voucher pro- gram differs from most people's con- ception of subsidized affordable hous- ing, which involves large apartment complexes for which Section 8 vouch- ers are attached to those specific prop- erties, he says. Housing choice vouchers are attached to qualifying tenants, who can use their vouchers to live any- where that accepts them. "It's designed to drive social and economic mobility, because now the tenant can choose to take their sub- sidy and live where they want to live, rather than being told, 'You don't make money — you have to live here,'" Bag- dasarian says. More than 80% of Simply Homes tenants are working single moth- ers, he says. "Every mother — every parent — wants the same thing," Bagdasarian says. "ey want their kids to be able to grow up in a safe home that's well maintained, that's in a nice area. … It doesn't have to be the most expen- sive, but it has to be nice." A single parent earning minimum wage in the neighborhoods where Simply Homes operates would need to work 150 hours a week to afford a market rate apartment, he says. But with the voucher program, tenants pay no more than 30% of their gross income, and the government pays Simply Homes the difference. Simply Homes spends a high per- centage of its capital expenditures — as much as 50% — on renovating the homes it buys, Bagdasarian says. It's only possible for the company to offer affordable lease rates while still earning a profit because of the technology it uses. "We're now reintroducing mar- ket-ready, high-grade homes, but making them available specifically to those that otherwise wouldn't have the opportunity to have a home like this," he says. A Harvard University study found that children who are able to relocate from high-poverty areas to less impov- erished ones see their lifetime earn- ings increase by an average of more than 30%, according to Bagdasarian. In that sense, Simply Homes offers a pathway to higher earnings for the children of its tenants. Bagdasarian sees Simply Homes as the next evolution of institutional homebuying, which in the past has been focused on short-term gains that have tended to harm lower- income residents by gentrifying their neighborhoods and making them less affordable — not more so. "We're anti-gentrification," he says. "We're about revitalization." J. Craig Anderson, a freelance writer, can be reached at editorial @ mainebiz.biz We've made commercial development a hallmark of our practice, and offer a team of legal experts that can support your goals from groundbreaking to grand-opening. When you want one firm that can handle every aspect of your next project, you want Perkins Thompson. Your Success is Our Legacy One firm for all your development needs. » C O N T I N U E D F RO M PA G E 1 8

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