Homestead
Homestead is a tech-enabled housing company based in Los Angeles that was built on the belief that housing development can be achieved without displacement and gentrification. The company partners with homeowners, providing financing, design, permitting, and project management services, to help create new housing in LA’s backyards.
- Chosen to be a part of Y-Combinator’s Winter 2020 accelerator program and raised $2+ Million to help address California’s housing crisis.
- Quickly became the largest ADU builder in Los Angeles.
- Pivoted in 2022 to take advantage of California’s landmark new housing law (SB 9) which allowed for 4x the development on a single lot.
- Generated demand for SB 9 development, in the form of paid LOIs, that exceeded $100M in future net revenue.
SB 9
SB 9 went into effect on Jan 1, 2022. It allowed most single-family homeowners in California to divide their property into two lots and create up to 4 units of housing on each new lot.
The problem? Most homeowners who would consider this type of development couldn’t afford the process or weren’t able to access financing for this big of a project.
Homestead’s SB 9 Product allowed homeowners to put $0 into the project and make anywhere between $200,000-$400,000 just by giving up their backyard. To do this, Homestead used its own debt warehouse to finance the project up-front, then handled all permitting, design, & construction. When the new house(s) sold, Homestead would give the homeowner their % of the profit.