Dallas Company Targeting 'Missing Middle Renters' Raises $50M In Pre-Seed Funding

A Dallas-based business working to address a shortage of attainable rental housing has raised $50M to kick-start the development of 50 communities.

Homz, a housing company focused on sustainable, wellness-focused multifamily developments, said it will use the money to form partnerships with leaders of secondary markets across the Southeast. The company hopes to leverage incentives to develop communities at a lower cost.

“It’s no secret that there is a lack of attainably priced housing in the U.S., which severely restricts optionality and socioeconomic advancement,” Homz Board Member Kim Diamond said in a statement. “We are committed to changing this by delivering a uniformed brand of sustainable, wellness-centric communities at attractive price points that people actually want — and can be proud — to live in.”

The pre-seed funding was led by Dallas-based Nanban Ventures, with additional contributions from family offices and high net worth individuals, according to a news release. Homz expects to invest between $140M and $170M into each community and to secure financing through the Department of Housing and Urban Development.

“Investing in Homz provides us with an opportunity to contribute to the betterment of society and the livelihoods of many individuals and families without limiting our return potential,” Nanban Ventures CEO and Managing Partner Gopala Krishnan said. “We are excited to see these communities come to life.”

Homz is modeled after the hospitality industry, which uses standardized, franchised brands replicated across markets. When paired with incentives, Homz can create cost efficiencies in the residential space that translate to lower rental rates, Diamond told Bisnow.

The company works with municipalities to procure land either through the city itself or through landowners who wish to leverage their property for the greater good, she added.

“By standardizing the design and layout of each community and saving on land acquisition costs, Homz is able to invest more in the communities while continuing to ensure each unit is available at an attractive price point,” Diamond said in an email.

Each community will have about 1,000 units evenly divided across four multifamily brands aimed at accommodating various stages of life. Larger units will be ideal for roommates and growing families, while others will cater to value-seekers. Build-to-rent homes will also be included, per the news release.

The developments will primarily target “missing middle renters,” Diamond told Bisnow, or those whose primary options are typically Class-B or C workforce housing with less access to desirable amenities, noting that there is a “glut of luxury and overpriced development" in markets across the country.

“Homz is committed to being a solution that addresses the affordability gap that has prevented individuals and families from finding a vibrant place to call home,” Diamond said in the email. 

Pricing is still being finalized and will vary by market, and the number of units set aside for families earning below area median income will be based on location and each particular city’s requests, Diamond said.

The company hopes to break ground on its first projects by the end of this year.