Call it a co-op for renters, or boarding house 2.0. Startup PadSplit, based in Atlanta, has a novel approach to solving the affordable housing crisis: shared homes, with private bedrooms for residents (or members, as they’re called), fixed utility costs and a business model that makes it all profitable for property owners.
While many co-living startups target affluent and mobile Millenials, average annual income for a PadSplit residents is $21,000. Room rentals—all in the Atlanta area for now—cost roughly $550 a month, including utilities. That compares to an average $1,437 for a 1-bedroom apartment rental in the area.
Residents also report about $460 in monthly savings when taking into account housing, utility and transportation costs, according to PadSplit, which tries to locate its units near public transportation.
Among the benefits for property owners: lower vacancy, lower turn costs, no leasing fees and massive demand, according to the company. It says its property owners have increased earnings by more than 60 percent.
“This opens up more choice for people who have no choices,” says PadSplit founder Atticus LeBlanc (second from right, back row), who recently raised a $4.6 million seed round of financing.
An Inefficient System
LeBlanc got the idea while working as an affordable housing developer and property manager. What he saw were highly regulated, inefficient housing subsidy programs, along with a private market lacking incentives to create affordable housing. With that in mind, he came up with a model that could encourage private investors to create affordable housing by making it more profitable. “Property managers have a typical formula for what people can afford. But as I talked to people earning minimum wage, I realized they couldn’t pay for anything that was available,” he says.[…]
The post Low Income Co-Living Offers a Solution to the Affordable Housing Crisis appeared first on Locavesting.
The full and original article can be viewed on Locavesting.com
Visit the Invest With Values - Resource Directory to access leading investor information, opportunities, organizations, events, groups and tools.