There’s a new player in the local on-demand housing sector, one toting an Airbnb-like business model that connects property owners with low-income tenants in need of a home.
PadSplit, an Atlanta-based company, added Central Virginia to its list of markets earlier this month. The company provides an online marketplace of housing options, mainly rooms for rent for users with an average annual income of $25,000.
PadSplit’s initial foray into the region will consist of 12 individual rooms in the Petersburg area, though more Richmond-area properties are expected to be added to the site in the future.
There were two Petersburg properties with four rooms each listed as available on the site Monday, with weekly rents of $140 to $165.
Rooms listed on PadSplit’s site are furnished and come with fixed utility costs as well as Wi-Fi and access to telehealth services.
While PadSplit handles the application process and rent payment processing, on-the-ground management to handle things like maintenance issues is shopped out to local property management companies. PadSplit said it typically finds its tenants through referrals from social services providers and large employers.
“The reality is in smaller markets, we don’t have the bandwidth or funding to go in and hire a lobbyist or even send people to those markets. We really rely on those local partners who already have that relationship,” founder and CEO Atticus LeBlanc said.
LeBlanc said local real estate agent and landlord Moe Mathews, who owns the 12 inaugural units in the company’s Richmond metro market, reached out to PadSplit to bring it to the region. PadSplit has also built relationships with Anthem Healthkeepers Plus and Richmond-area nonprofits Housing Families First and Safe Harbor to help get the word out to tenants.
Mathews said he learned of PadSplit through professional connections around the time it launched four years ago.
“I probably helped PadSplit break into other markets even before Richmond over the years as I was so excited, and I couldn’t stop talking about the model and their company to every real estate investor about affordable housing,” he said in an email. “Many investors have tried to do this but none have perfected it like PadSplit.”
Mathews said PadSplit plans to have 30 units in the region in the first year.
Tenants pay for rent, utilities and other expenses in a single weekly bill, and payment is handled through PadSplit. A percentage of the housing bill is paid to the landlord. It’s free for property owners to post rooms to the site.
Anthem intends to refer its customers as they complete medical care to help them transition out of care facilities and into independent living. The units are also available to the general public.
“By partnering with PadSplit, we’ll ensure that recently discharged individuals have access to quality, affordable housing and supportive services, which typically results in the most successful outcomes for the vulnerable populations we serve,” Anthem Healthkeepers Plus Medicaid Plan President Jennie Reynolds said 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 seemed like a promising tool in the nonprofit’s efforts to address housing affordability and homelessness in the region. Vann-Turnbull said that income-based housing opportunities are scant in normal times, and the pandemic has made it more difficult to find properties.
“Since they typically have a house with individual rooms for their members, that might work for a single woman who we are working with, or a mom or dad with a young child,” Vann-Turnbull said. “It could be a great match for a few people and we’re looking for any good, safe, well-maintained, well-run housing opportunities we can.”
PadSplit pitches its service as a way to help tenants improve their credit scores and save money needed to move into new apartments, buy vehicles and buy homes. PadSplit rooms are required to meet design guidelines that exceed the standards of the U.S. Department of Housing and Urban Development. Tenants are subject to criminal background checks to qualify for the rooms, and tenants must submit their income for verification.
PadSplit was founded in 2017. It has more than 1,300 active units, most of them 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 NuggMD recently launched its telehealth website that facilitates evaluations needed for medical marijuana cards in Virginia, on the heels of Richmond’s first dispensary opening for business.