Techo: Providing a Roof Over America’s Attainable Housing Crisis

Techo: origin: Spanish, pronounced: teh-choh, translation: roof, ceiling, or shelter

Techo Real Estate Capital is a purpose-driven real estate funding platform centered on the creation and preservation of Attainable Housing throughout the United States. We believe a home is foundational for not only the well-being of families but also to create thriving communities. Techo was founded by a team of real estate operators, bankers, entrepreneurs, and builders who understand the journey developers embark upon to create the next generation of Attainable Housing.

The Modern American Crisis

America is at a critical moment in the housing crisis. Homeownership remains well below historical norms with decreasing participation amongst minority groups and younger generations (1). In contrast, wealth created through homeownership has skyrocketed, accounting for 32% of all wealth creation between 2016-2019 (2) and 47% of overall wealth amongst homeowners (3). Housing affordability has been kept in check by the Fed’s efforts to keep borrowing rates low but is rapidly diminishing as home prices set new records nearly every quarter. The latest release of the FHFA home price index shows that homes are nearly twice as expensive as they were in 2000 and 45% higher than the peak of the last cycle. (4). While rental housing is increasingly becoming the housing solution for Americans, nearly half of all rental households are rent-burdened (paying rent >30% of their household gross income) (6) with many living in substandard conditions.

Although the creation of additional housing supply makes high-quality rentals and homeownership more accessible, the rate of new housing supply creation remains stubbornly frozen at mid-1990’s levels. Development is further inhibited by rapidly increasing construction costs and limited access to development funding. The result is fewer high-quality homes developed in proximate locations that serve working-class families.

Addressing this modern American crisis is imperative. The creation of sustainable, affordable housing has been quantifiably tied to the economic prosperity of the residents and surrounding communities, including healthier appreciation of surrounding homes (5).

We founded Techo to invest alongside the developers solving the housing crisis.

Burgeoning Housing Innovation

Many are embracing the challenge to create Attainable Housing. Innovators have birthed new ideas on how to build these communities, including both homes for purchase and rent, new methods of construction that accelerate timelines and reduce costs, and re-engineering of financing models. As entrepreneurs, we are champions of purposeful innovation and aim to partner with thought leaders. Specifically, we are interested in:

• Construction of entry-level, single-family homes
• Adaptive reuse strategies, including hotel conversion
• Deployment of lower-cost construction techniques, including modular construction and use of lower-cost, more efficient materials
• Renovation of class B and C multifamily
• Construction of accessory dwelling units (ADUs)
• High-density infill construction
• Co-habitation

Techo is focused on channeling these innovations to fuel Attainable Housing development that serves these families.

Closing the Funding Gap

Although the breadth of demand for Attainable Housing and a dearth of supply are easily quantified, many of the projects that could address the problem are never launched. They are often too small for institutional investors, too complex for specialty lenders to underwrite, and fall outside the criteria for bank financing, thereby forcing forward-thinking developers to tap into private networks to capitalize these projects. While most lenders view the world through a rearview mirror, the solution requires forward-thinking lenders who possess the sophistication to underwrite and fund Attainable Housing.

We built Techo to systematically unlock these opportunities and build programmatic partnerships with like-minded developers.

Capital with Purpose

We’ve mobilized a new form of capital with the belief that housing security is the basis for creating sustainable, thriving communities. We take a holistic view of each project, partnership, and opportunity to find the optimal structure and prioritize those where we can scale the relationship on a programmatic basis, climbing deeper into the capital structure over time. Our purpose enables us to create a lasting relationship with developers that extends beyond simple economics.

Creating better housing solutions for America starts today. We hold ourselves accountable for the number of lives we can positively impact through our investments. Please see our website at www.TechoREC.com for more detail on our strategy and funding solutions