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Affordable co-living startup PadSplit raises $4.6 million

Sonam Vashi

By Sonam Vashi

After the 2008 recession caused Atlanta home prices to collapse, Atticus LeBlanc started buying up newly cheap, multi-bedroom properties and renting them. He kept rents reasonably low—many renters couldn’t afford more than $100 per week—while still making a profit. “It was this lightbulb—why aren’t more people doing this?” LeBlanc says.

That desire to connect profit-minded landlords with renters in need of affordable housing led him to found PadSplit, an Atlanta-based startup that aims to help landlords turn single-family homes into multiple units, helping keep rents down. The two-year-old company has some promising momentum: PadSplit recently announced an initial funding figure (its “seed round”) of $4.6 million, invested by Core Innovation Capital, Cox Enterprises, Kapor Capital, and Enterprise Community Partners, among others.

A PadSplit room (Courtesy PadSplit)

PadSplit screens potential roommates, furnishes rooms, factors in costs of utilities and laundry, and chooses properties near transit and employment centers, helping bring down the cost of transportation. The company is part of several nationally that are rebranding a more simple concept—roommates, or rooming houses–as co-living, but LeBlanc points out how this model has worked in other industries: Uber and Lyft reconceived how hitchhiking and carpooling were once done. “You have this technology that gives you the confidence and accountability to think that you’re not getting in the car with [just anyone],” LeBlanc says.

PadSplit, which currently has more than 200 rooms across the metro Atlanta area, is mostly focused on single, lower-income Atlantans—unlike the WeLives of the world—including those making less than 80 percent of the area median income (less than about $42,000). LeBlanc says the average bedroom cost is about $580 per month, and the average income of a PadSplit resident is about $21,000, an important fact given that Atlanta’s affordable housing needs are most severe at that income level, or less than 50 percent of the area median income. Between housing, transportation, and utility costs, PadSplit says it saves members $460 per month, on average.

Some PadSplit residents stay in their homes for a few weeks before finding a traditional living situation (in this way, the company functions as a much-cheaper alternative to extended-stay inns); others have stayed for years. LeBlanc says the average stay for a PadSplit member is seven months.

What makes PadSplit unique is that it’s a for-profit model (many affordable housing developers are nonprofits) that doesn’t receive public subsidies, and it seeks to change the way incentives for landlords work. Right now, many Atlantans with means list their spare rooms or backyard carriage houses on Airbnb, allowing tourists and visitors to rent for a short time. But LeBlanc wants to provide another option for landlords and homeowners, especially those who are more socially conscious.

PadSplit wants to explore expanding to other cities, as well as adding more rooms in federal opportunity zones, a new program that incentivizes investment in specific areas. LeBlanc says PadSplit wants to show potential investors: “Here’s a way that you can increase your net profits; that you can do less work, because we’re going to take on more of the burden; and that you can do something good for society.”

 

This article was updated on April 23, 2019 to clarify statements by LeBlanc.

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Sonam Vashi
Sonam Vashi

Sonam Vashi is an award-winning freelance journalist in Atlanta writing about affordable housing for Saporta Report. Her reporting, which usually focuses on criminal justice, equity, and the South, has also appeared with CNN, the Washington Post, Atlanta magazine, and the Atlanta Journal-Constitution, among others. She is the vice president of the Atlanta chapter of the Asian American Journalists Association, and she grew up in Gwinnett County.

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1 Comment

  1. Avatar
    Coretta Johnson October 13, 2019 2:41 am

    I have been evicted from my room and all my things were placed in the basement of the house. The whole eviction was illegal eviction. The maintenance guy tore a peice of paper and put in my door last Monday, saying they will be by to put my things in the carport but my expensive things will be in storage. All LIES! They came in without the correct paperwork and set all my things out, lost my kapra meds for my seizures. I have stage 2 breast cancer and found this out just when I moved n with Padsplit. They were aware of the situation and I had to choose life or roof over my head, I chose life. For several months I had to pay for treatment out of my pockets, and at times didn’t even have food. When one of my house mates asked to use my phone email Padsplit and said she was going to call codes if the Black mold was not taken care of. They came in and gave me 24hrs ,no Marshalls, no court papers and set all my things out and change the locks. Into codelock. I have been there illegal evicted by Padsplit. They put me in a hotel on Fulton industrial with no public transportation then put me in lithia springs and no transportation to and from work. I don’t make alone. But all I had went to travel by lyfe, $40 aday. I have my granddaughter whos 4 yrs old with me on weekend and I have no money,food and padsplit isn’t answering my no emails. We’re here with nothing. I got her some eggs and sausage from breakfast to last all day. All this is due to an illegal eviction from Padsplit. Now they have me leave in Wednesday morning with no where to go. All this was illegally eviction. Atorn peiece of paper stuck in my door by the maintenance man. Then came back the next day took all I had and put it out. They lost my kapra meds for my seizures and I contacted them about it, they lied to me again saying they didn’t move it. How would you know if you moved it. You guys came in throwing all I had in black garbage bags and I can’t buy more meds cause I have to go to work and have food. I have nothing now due to Padsplit putting me out,changing locks . Illegal eviction. I have food at the house but I can’t go back to house to get things. I have not taken my seizures med since last Wednesday night. When I checked in the hotel the first night I woke up in Atlanta Medical due to seizures. They don’t care.

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