Yardsworth’s Innovative Approach: Buying Backyards to Solve Los Angeles’ Housing Crisis

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An innovative company is confronting the Los Angeles housing crisis head-on. Yardsworth leverages recent legislation — Senate Bill 9 (SB 9), the California Housing Opportunity and More Efficiency (HOME) Act — to turn empty yards into new lots with additional housing. This ingenious solution is the brainchild of Matt Lucido, founder and CEO of Yardsworth.

“At a high level, Yardsworth’s mission is to enable all people to live better lives in high-cost housing markets,” Lucido explains. “We buy their unused backyard space and use it to build a small home or duplex.”

Yardsworth pays homeowners up to $200,000 for about half of their backyard — approximately 1,500 square feet of backyard space plus a small access path. “In effect, we pay them to stay in their homes,” Lucido says. In this way, Yardsworth can help whole communities retain their original character, combat displacement, and forestall gentrification.

Los Angeles’ housing crisis

As The Guardian reports, “The median price for a home in Los Angeles, California’s largest city, will soon hit one million dollars, as soaring housing costs fuel a humanitarian crisis that has left at least 50,000 people living on the streets.”

This longstanding housing crisis was one of the factors that inspired Lucido to launch Yardsworth. “First there was a lack of housing, and then inflation and high interest rates hit,” he comments. “Governor Newsom often says California needs 3.5 million new homes by 2025. Well, that’s only a bit over a year away now.”

The question is how California can obtain all this new housing. “In LA and other cities, it’s not feasible to build farther and farther from the urban core,” Lucido says. “The time spent in traffic is not only a tax on lower-income workers and families, but also the number of car-hours created by such commutes is an environmental disaster. Meanwhile, new housing construction was blocked in single-family zoned areas across LA, San Diego, the Inland Empire, the Bay Area, and other key areas for 80 to 100 years. That’s why every house you see for sale was built in 1920 or post-WWII.”

The good news, however, is that SB 9 has opened up new opportunities for affordable housing.

SB 9: A huge opportunity for new housing

“Thanks to California’s enactment last year of SB 9, there’s finally an opportunity to ‘upzone’ and build houses at scale,” Lucido explains. “SB 9 allows all that backyard land to be utilized for housing — specifically single-family homes or small duplexes. Another advantage of this new construction is that it reduces the amount of lawns, which aggravate our near-perpetual water crisis.”

According to Lucido, however, while these opportunities may be “huge,” they are also underutilized. “Hardly anyone’s building anything,” he says, “because it’s an extremely complicated process. Plus, it’s more expensive than your average homeowner can afford. The fees can reach $75k just to split a lot in two, and that’s before you even build anything.”

That’s where Yardsworth comes in.

The solution: Yardsworth

Yardsworth gives homeowners an easy, practical way to turn the unused portion of their lots into a fortune in cash, as well as alleviating them from the expenses and headaches of attempting to build new construction themselves.

“We pay 100 percent of the costs involved in subdividing or splitting a lot on behalf of our homeowner clients,” Lucido says. “We also pay them hundreds of thousands of dollars on top of that. For most of our clients, that kind of money is life-changing. It’s debt-free and typically tax-free. Furthermore, they get to stay put in their homes and communities instead of being gentrified out and marginalized. Keeping diverse communities intact while creating housing is a win-win.”

Yardsworth uses the land they purchase to build one- or two-unit homes. “Each one we build gets us that much closer to California’s 3.5 million home goal,” Lucido notes. “In a way, it’s a public-private partnership.”

Yardsworth: A new way to tap into home equity

While Yardsworth offers a fast way to raise substantial funds for anyone who would like a major cash infusion, it’s particularly helpful for homeowners who find themselves in a “house-rich, cash-poor” situation.

“Homeowners are sitting on near-record home equity,” Lucido points out. Indeed, the value of California homes has more than doubled in the last 10 years.

According to Lucido, homeowners historically have accessed that equity in two ways. “Either they have sold their homes and moved — which is displacement and gentrification — or they have borrowed against their equity,” he says. “Today’s high-interest rates make both options unattractive.”

By providing a debt-free way of accessing home equity, Yardsworth gives homeowners the cash they need without burdening them with double-digit interest-rate debt. “Some of our clients use this payment for retirement, renovations, or tuition,” Lucido says.

The future of housing is bright

Lucido’s plans don’t stop with Los Angeles, however. “Yardsworth will invest hundreds of millions of cash into low and middle-income communities across California,” he says. “We’re creating housing, at scale, in city centers for the first time since WWII.”

Indeed, Yardsworth has a host of new and homeowner-friendly offerings in the pipeline. “We aim not only to help existing homeowners stay in their homes while expanding their net worths, but also to help first-time homebuyers access their piece of the American dream,” Lucido says. “With Yardsworth, it will soon be possible to buy a home in one of the country’s most competitive housing markets.”

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