If you make housing cheap, entrepreneurs will come.
The idea is straightforward: take clusters of foreclosure homes in certain neighborhoods, rehab them, and offer them to startups at an affordable price. This is the vision of Venture House, a non-profit in St. Petersburg (Florida) that is launching a program to attract entrepreneurs, in hopes of revitalizing some of the city’s neighborhoods and overall economy.
Entrepreneurs struggle with the cost and logistics of housing: a central location, close to work and community life, is often out of reach financially, and instead those growing businesses lose lots of hours commuting or working at a job unrelated to their core venture.
“I was an entrepreneur with my own startup, and I know what it is like to try to be in the city center but having to manage a tight budget,” says Frank Welles, CEO of Venture House.
St. Petersburg has over 800 “boarded-and-vacant” homes, many concentrated in some of the city’s most strapped neighborhoods. Foreclosure houses have depreciated much of the neighborhoods’ value after the recent economic downturn. Venture House aims at targeting clusters of 5-10 houses in close geographic proximity to create additional synergy for the entrepreneurs who move there.
“Housing is really the tool to developing a community. We are trying to create a critical mass of entrepreneurs,” explains Welles. “It’s difficult to do this one house at a time. But when you look at hundreds, now you are talking about a real estate portfolio. It’s about revitalizing the city.”
Entrepreneurs must apply for the program, and if chosen, they will be able to rent or purchase homes at one-third to one-half of market value.
If the first step is to create housing as a foundation for an entrepreneurial ecosystem, the next is making sure startups stay and grow their business. Venture House has strategic partnerships with other organizations, including Bright Community Trust, to create an environment for startups in all industries, not only technology.
“We specifically target entrepreneurial companies that commit to job creation goals, providing economic development directly. Basically we want to attract the risk-takers who are looking to start a new business. We offer low housing costs and high quality of life,” says Welles.
The first pilot of 5-10 entrepreneurial houses will start at the end of this year. Welles hopes that the initial phase will serve as a test for changes and help the community adapt. Once completed, Venture House plans to scale rapidly and provide over 100 homes for entrepreneurs.