Many people talk these days about the housing affordability crisis. There’s a solution out there, for anyone who actually wants to do something about it.
To address both the shortage of affordable housing and our relative inability to produce it, I founded a company called PadSplit in 2017. It is now the country’s largest shared housing marketplace designed for the workforce. Its premise is based on my own experience in Atlanta, where I saw low-income workers and seniors on fixed incomes who simply didn’t earn enough income to qualify for traditional housing – even in the depths of the Great Recession.
I began testing the shared housing concept in 2009. That’s when two of my neighbors, Otis and Mitch, informed me that their rooming-house was being foreclosed and asked if they could rent rooms in my rental home next door for $100/week. They ended up renting from me there for several years, and I still have one of the original residents renting a room in that same home 13 years later.
At the time, I remember looking at the condition of their former home — with a tarp on the roof, no AC and wires hanging off the side — and wondering why anyone would choose to live there. As I soon came to understand, there weren’t any better options. Even if there were, there was also no standard way to find a better room. It was clear even in 2009 that there was a lack of affordable housing supply and an equally important lack of access to that supply for low-income earners.
PadSplit was how I thought we could provide more housing choices for folks like Mitch and Otis, and more accountability for landlords. We do that through a market-based model that makes affordable housing possible by also making it more profitable … so that investors will actually create more of it. Today, through PadSplit’s online platform, there are more than 4,800 available units which have housed more than 10,000 people. Each unit includes a private bedroom, access to common areas, and all utilities, Wi-Fi and furnishings — for one weekly fee. Importantly, PadSplit does not require a credit score, a security deposit or a commitment beyond 31 days. These policies allow for more flexibility and access, both of which our population needs.
Over the years we’ve won several awards for our model, which we certainly appreciate, but I’ve taken much more fulfillment from the transformational stories of folks who have leveraged our model to take their next step in life: Lora went from sleeping at the airport to a stable home 15 minutes from her job; Gregory launched his own shoe company; Keosha bought a home for herself and her two daughters.
We love these stories. As we’ve grown, we also now have access to enough data that we can calculate the broader impacts we are having as well.
Given that we have been growing for four years, I was curious to study the data for our longest-tenured residents who leverage our model for permanent housing. To determine who our “best long-term residents” were, I screened for those who had lived with us for more than a year and had both excellent behavior ratings from their housemates and $0 account balances.
Here are the results:
- This group includes 365 people in metro Atlanta.
- Their average tenure is 1.8 years (remember, we launched only four years ago).
- Their average rent is $678.83/month (which includes furniture, utilities, Wi-Fi, laundry, rent-reporting to bureaus, and access to telemedicine).
- Their average annual income is $25,325.
- Cumulative savings by these members since move-in: $3.3 million (members report monthly savings of $420, on average).
- Actual subsidy used to create or sustain these units: $0
Compare these results to the average Atlanta one-bedroom rent, which is currently $1,862 even before utilities and without furniture. The average local capital subsidy to create or preserve a unit in Atlanta is $126,000 according to Atlanta’s current affordable housing tracker.
For just these outstanding members, the creation of those 365 units would have cost $46.2M in local subsidy, which doesn’t include the ongoing operating subsidy that would have been required to allow them to actually afford the apartment.
The data don’t lie. Our shared housing model may be controversial in many circles, but it shouldn’t be. It’s proven to be an efficient and effective way to address the housing shortage and give people access to affordable, quality and stable housing that’s close to their jobs.
Atticus LeBlanc is the founder and CEO of PadSplit, the country’s largest shared housing marketplace that provides housing specifically designed for the workforce.
