ROOM FOR RENT
PadSplit offers affordable, shared housing rental options for front-line workers.
PadSplit, an Atlanta-based company focused on affordable housing near where people work, has entered the Houston market with a shared housing platform that connects renters with rooms and services designed to improve their station in life.
Houston will be the secondlargest market for PadSplit, which provides furnished rooms for front-line workers earning less than $40,000 a year and an opportunity for property owners to put underutilized real estate to use. The rooms, which could be owned by PadSplit, allow a homeowner with a spare bedroom or single-family or multi-family investors, to rent for an average of $600 per month.
“The pandemic has highlighted the importance of front-line workers to our quality of life, as well as their vulnerability due to the lack of affordable housing options,” said CEO Atticus LeBlanc.
Because home sizes in the U.S. have increased as family sizes have decreased, there is surplus space in many houses that could be generating income, according to PadSplit.
“The fastest way to deploy affordable housing is to use what’s there,” said LeBlanc, who founded the company in 2017.
The PadSplit platform converts underutilized spaces such as formal living rooms to bedrooms
to maximize returns for property owners, he said. The houses are outfitted with energy efficient lighting and insulation to save on operating costs for the owners.
“Our model balances the needs of those who seek affordable housing with actually increasing profits for property owners, all without the use of additional taxpayer dollars,” LeBlanc said.
Tenants, who undergo background
and credit checks, pay by the week. The rate includes utilities, WiFi, laundry facilities and 24/7 access to telemedicine services.
PadSplit works with credit agencies to help tenants improve their credit scores so they can work toward goals such as owning a house or having their own place, LeBlanc said. The company partners with social services
groups and staffing agencies to help tenants who are struggling with job losses. Because of the economic fallout from COVID, the company set up an emergency assistance program and has raised more than $90,000 to help members who have fallen behind on their payments.
“If they decide they don’t like this place or location or this roommate, they can move to another room in the network or they can be refunded,” LeBlanc said.
Early on in the pandemic, PadSplit developed a policy including “no guests” and additional cleanings to address COVID. The pandemic did not directly impact the company’s plans for expansion, but highlighted the need — and its resolve — to provide more affordable housing.
PadSplit manages the units, including those it does not own, collecting the weekly rents, which can be set to correspond to paydays. It handles maintenance issues and sends the proceeds to the owners, typically on a monthly basis. It makes money by charging a 12 percent to 14 percent commission to the property owner.
PadSplit tenants, who often earn between $25,000 and $35,000, include security guards, hair dressers, teaching assistants, grocery store and restaurant employees. About 70 percent of them get by without a car, opting instead to take public transportation, ride-hailing services or biking to work. They stay in the rooms an average of about one year.
The company has more than 1,230 rooms available across all markets, primarily in Atlanta. Almost 90 rooms are under development in the Houston market. The rooms, which will be hitting the market in the next few months, are concentrated in southeast Houston, Acres Homes and Pasadena areas.