An example of one of the rooms in Central Virginia registered to the PadSplit service. The startup wants to be the Airbnb of income housing, connecting owners and tenants looking for accommodation. (Photos courtesy of PadSplit)
There’s a new player in the local on-demand housing industry, an Airbnb-like business model that connects landlords with low-income tenants in need of housing.
Atlanta-based PadSplit added Central Virginia to its list of markets earlier this month. The company provides an online marketplace of housing options, primarily rooms for rent for users with an average annual income of $25,000.
PadSplit’s initial foray into the area will consist of 12 single rooms in the Petersburg area, although more properties in the Richmond area are expected to be added to the site in the future.
There were two Petersburg properties with four bedrooms each listed as available on the site Monday, with weekly rents of $140 to $165.
The rooms listed on PadSplit’s site are furnished and include flat fees for utilities, as well as Wi-Fi and access to telehealth services.
While PadSplit handles the application process and processing of rent payment, on-the-ground management to handle issues such as maintenance issues is outsourced to local property management companies. PadSplit said it typically finds its tenants through referrals from social service providers and large employers.
“The reality is that in smaller markets, we don’t have the bandwidth or the funding to go in and hire a lobbyist or even send people to those markets. We really rely on these local partners who already have this relationship,” said Founder and CEO Atticus LeBlanc.
Atticus LeBlanc, founder and CEO of PadSplit.
LeBlanc said real estate agent and local landlord Moe Mathews, owner of the inaugural 12 units in the Richmond Metro Market, reached out to PadSplit to bring him to the area. PadSplit has also forged relationships with Anthem Healthkeepers Plus and Richmond-area nonprofits Housing Families First and Safe Harbor to help get the message out to tenants.
Mathews said he heard about PadSplit through professional connections around the time it was launched four years ago.
“I’ve probably helped PadSplit break into other markets even before Richmond over the years, because I was so excited, and couldn’t help but tell every real estate investor about the model and their business. affordable housing,” he said in an email. “Many investors have tried it, but none have perfected it like PadSplit.”
Mathews said PadSplit plans to have 30 units in the area in the first year.
Tenants pay rent, utilities, and other expenses on one weekly bill, and payment is handled by PadSplit. A percentage of the housing bill is paid to the owner. It is free for owners to publish rooms on the site.
Anthem intends to refer clients as they complete their medical care to help them transition from residential care to independent living. The units are also accessible to the general public.
“By partnering with PadSplit, we will ensure that recently released individuals have access to affordable, quality housing and support services, which generally results in the best outcomes for the vulnerable populations we serve,” said Jennie Reynolds, president of the Anthem Healthkeepers Plus Medicaid plan. in an email.
Healthkeepers is an independent licensee of the Blue Cross Blue Shield Association.
Housing Families First executive director Beth Vann-Turnbull said the site appears to be a promising tool in the nonprofit’s efforts to address housing affordability and homelessness in the area. Vann-Turnbull said income-based housing opportunities are rare in normal times and the pandemic has made it more difficult to find properties.
“Since they usually have a house with individual rooms for their members, that might work for a single woman we work with, or a mom or dad with a young child,” Vann-Turnbull said. “It could be a good match for a few people and we are looking for every good, safe, well-maintained and well-run housing opportunity we can.”
PadSplit markets its service as a way to help renters improve their credit rating and save the money needed to move into new apartments, buy vehicles, and buy homes. PadSplit rooms must meet design guidelines that exceed US Department of Housing and Urban Development standards. Renters are subject to a criminal background check to qualify for rooms, and renters must submit income for verification.
PadSplit was founded in 2017. It has over 1,300 active units, mostly in single and multi-family properties in Atlanta. The company also has a presence in Tampa and Houston. It has 60 full-time employees and about 80 contractors, and has raised $15 million in capital to date.
PadSplit is the latest out-of-town startup to bring its services to the Richmond market.
California-based company NuggMD recently launched its telehealth website that facilitates assessments needed for medical marijuana cards in Virginia, on the heels of the opening of Richmond’s first dispensary.
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