Atlanta Startup Sees Single-Room Rentals as Future of Low-Cost Housing

Rentals with single-room occupancies, once a staple of urban housing, were largely zoned out of U.S. cities decades ago. An Atlanta startup called PadSplit thinks they’re ready for a comeback: The company is helping landlords turn rental properties into pay-by-the-week rooming houses. They already manage more than 400 rooms, mostly in lower- and middle-income neighborhoods of single-family homes.

“We’re investing in this because we have basically come to believe that there is going to be a housing crisis again,” says Arjan Schütte, founder of Core Innovation Capital, a venture capital firm that’s backing PadSplit. “Ten years ago the crisis was a financial one. This time it’s a crisis of supply.”