Co-living a growing trend among renters on a budget

PadSplit and Society Atlanta are two unique options for shared living arrangements.
Keosha Roache lived in three PadSplit properties in Atlanta while saving enough money to buy her home in Monroe.   STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

Credit: Steve Schaefer

Credit: Steve Schaefer

Keosha Roache lived in three PadSplit properties in Atlanta while saving enough money to buy her home in Monroe. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

Trucker Yorkie Miles moved to metro Atlanta from Montgomery, Alabama, a few months ago and needed to give his real estate agent time to find him that perfect single-family home.

“I was kind of reluctant to sign a long-term lease, never knowing when the realtor would come through,” he said.

Miles decided to try co-living and Atlanta-based PadSplit.

Atticus LeBlanc founded PadSplit for renters seeking an affordable housing alternative.

Credit: Photo courtesy of PadSplit

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Credit: Photo courtesy of PadSplit

“It was perfect for me, especially in my circumstances,” said Miles, who makes deliveries within a 150-mile radius of Atlanta for a major freight line.

While he waits on a home to buy, “it’s just nice to be able to come home to a clean, safe environment in a decent neighborhood,” he said.

Miles is renting a furnished bedroom in a single-family home in Douglasville through PadSplit at less than $700 a month, well below the average cost of a one-bedroom apartment in Atlanta or the surrounding suburbs. Utilities, internet and free telemedicine services are included.

Groups such as PadSplit are helping to fill a void in affordable housing both here and in major cities across the country.

Other co-living developers are catering to niche markets, including people who find the isolation of working at home alone too tough and desire an amenities-packed lifestyle, and those who have a desire to be real-life Golden Girls.

In the United States, more than 5,000 beds in about 150 modern co-living communities existed in 2019, according to CBRE, the world’s largest commercial real estate services and investment firm. Another 55,000 are in the works, the firm’s researchers found.

Society Atlanta is one of several co-living projects being developed in Atlanta and elsewhere by the co-living brand Society Living.

A rendering of Society Atlanta, a co-living development on Peachtree Street, slated to open in 2024. Courtesy of developer PMG

Credit: Photos courtesy of PMG

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Credit: Photos courtesy of PMG

Slated to open in 2024, the development is located at 811 Peachtree St., the site of a former parking lot. This live-work project is expected to include 460 units and 644 beds. About 15% to 20% of those leases will be rent-by-the-bed options, said Ryan Shear, managing partner for developer Property Markets Group (PMG).

The development will tap into a roommate trend that’s long been a mainstay of college life and early career adults with shared kitchens and common living rooms. But this new configuration comes with plenty of other amenities. Its website advertises a “lobby restaurant and bar, sky pool deck, modern gym, and huge co-working lab.”

Rental rates will be determined based on current market trends, and tenants are expected to range in age from early career to 50-plus, said Shear.

“People were already living with roommates to afford to live where they want to be,” he said. “But the process was disorganized and inefficient. We realized we could make living with roommates better by providing the furnishings, splitting the bills and filling any vacancies. That gave us the ability to offer a lower introductory rent than traditional buildings.”

The reasons why

Metro Atlanta has a serious shortage of affordable housing — so bad that staff of the Atlanta Regional Commission (ARC), the area’s planning agency, took 13 county commission chairs and mayors to Seattle in 2018 to show them what can happen when a housing shortage reaches the crisis stage and pushes people into homelessness.

“It’s gotten a lot worse since then,” said Sam Shenbaga, who runs the ARC’s community development program. “We are in the midst of probably the worst housing situation we’ve had in our region in a long time.”

The housing supply is so low in metro Atlanta that the region has “more real estate agents than we have homes for sale,” Shenbaga said. “And what supply that is out there is priced on average so far above what the median household can afford.”

Supply versus demand is a major part of what’s happening.

“We’re simply not building enough,” Shenbaga said.

Before the Great Recession of 2008, the housing market was going gangbusters and plenty of new housing was being built. But as the rest of the economy rebounded, the local housing market did not, as is clear from the data. In metro Atlanta, the average number of permits issued to build residential units every month went from 4,100 a month in the 1990s to 2,500 a month in the past decade, according to the U.S. Census Bureau.

All the while, more people continue to move to metro Atlanta for the climate, relative affordability and good amenities, pushing up both demand and costs, Shenbaga said.

Other factors include the loss of existing affordable housing as older homes and rental properties are demolished and replaced and “the big mismatch between our transportation infrastructure and our housing,” Shenbaga said.

“There are not enough homes at a decent price point close to job centers,” he said.

The average cost of a home in the 11-county metro area jumped $82,000 or about 53% since 2017. Rents jumped 26% in that same period — leaving 28,000 renters in the city struggling to keep up, 148,000 in the 11-county region, according to data provided by ARC.

Karen Hatcher, a real estate broker and president of the Atlanta Realtors Association, said the city needs a diverse housing stock and co-living can be a component of that.

“There are people out there who don’t want the isolation of a conventional apartment, and this is an opportunity for them to save money to buy a home,” Hatcher said. “It can be a part of the thriving mixed-income we are looking for.”

Front Porch is a development slated to open 2024 that will include units designed for co-living. Courtesy of Historic District Development Corporation

Credit: Historic District Development Corporation

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Credit: Historic District Development Corporation

Front Porch — the first major revitalization project to come to Atlanta’s historic Sweet Auburn in 15 years — will include options for co-living.

Cheneé Joseph, president and CEO of developer Historic Development Corporation, said community input was solicited in the planning stages of the project. Neighbors made clear they wanted co-living to be part of the mixed-use development of retail and residential space at Auburn Avenue and Old Wheat Street.

“They felt it was important to have various opportunities, including shorter leases,” she said. “You have a lot of people in the hospitality industry, and to look into a year lease is not very convenient.”

The development’s 36 co-living units featuring 70 beds will have a base rent of $845 before utilities, cable and cleaning, Joseph said.

“We’re working on having a fitness center, as well,” she said.

These units will be open to people making 80% or less of the area’s average median household income of $55,733. But Joseph said she is hoping the project, which is slated to open in early 2024, can find funding from a nonprofit so that even lower-income workers can afford to live there.

The PadSplit model

Atticus LeBlanc of Decatur founded PadSplit in 2017 as a housing option for low-income workers. Drawing on his years in real estate and his longtime interest in affordable housing, he’s created a shared housing marketplace with PadSplit.

With operations in Atlanta, Texas, Florida and Virginia, LeBlanc recruits property owners who are willing to rent one or more rooms in their houses. His company runs background checks on potential renters, which are referred to as “members.” PadSplit does not check applicants’ credit but turns down people who have been evicted more than once or have had a felony conviction in the past seven years.

Members pay PadSplit weekly or biweekly, and PadSplit, in turn, pays the property owners. The technology-based company has investors behind it and is not expected to be profitable for several years, LeBlanc said.

PadSplit members typically make about $25,000 a year and are usually looking for a stepping stone to stability, he said. Members include financially strapped college students, transplants starting a new job, and people experiencing divorce or a financial setback.

Currently, PadSplit has 4,100 bedrooms in its inventory and has housed more than 7,400 individuals at a time. The average person stays in a PadSplit for nine months, and 20% to 25% stay long-term, LeBlanc said.

Keosha Roache, a Clayton County school teacher, lived in three different PadSplit properties leading up to and during the pandemic. She described the experience as “revolutionary.”

“It changed my life, if you consider where I was and where I am now financially, and in terms of having some stability for my growing family,” said Roache, an English Language Arts teacher at Riverdale Middle School and mother of two.

Her children stayed with their grandmother in South Georgia while Roache taught full-time and pursued her master’s degree. By living in low-cost PadSplits during that time, she said she was able to bank enough money to achieve her dream of buying her first home in October 2020.

Co-living projects such as PadSplit, especially in areas such as the Beltline, are “all necessary as part of the solution to the affordable housing crisis,” said the ARC’s Shenaga.

“There’s a lot of 2% solutions,” he said. “There’s no silver bullet here.”

Does home-sharing work for you?

The National Shared Housing Resource Center recommends you review your past living arrangements for the good and the bad, and ask yourself these questions before entering a shared housing arrangement:

⋅Are you sensitive to other people?

⋅Are you “reasonably accepting” of other people’s personalities, moods and preferences?

⋅Are you able to confront problems and come to workable solutions?

⋅Are you willing to compromise and be flexible?

Cost of apartment living

Estimated median apartment rental rates in March 2022.

City 1BR Rent 2BR Rent

Atlanta $1,400 $1,410

Roswell $1,660 $1,860

Alpharetta $1,830 $2,190

Marietta $1,410 $1,670

Smyrna $1,500 $1,750

Newnan $1,450 $1,520

Kennesaw $1,650 $1,900

Tucker $1,380 $1,630

Duluth $1,590 $1,970

Stockbridge $1,190 $1,500

Woodstock $1,390 $1,920

Canton $1,210 $1,400

Lithia Springs $1,220 $1,400

Conyers $1,410 $1,510

Norcross $1,320 $1,640

Apartment List develops rent estimates each month based, in part, on the median recent rent statistics from recent movers taken from the Census Bureau American Community Survey. Utilities may not be included.

Source: Apartment List online rent tracker