The dark reality of the modern-day rooming house
In February, Tammy Olomina was sleeping in her car after a divorce left her homeless in Houston. The 47-year-old saw an ad for a housing marketplace called PadSplit, which lets people rent rooms in houses where tenants share common spaces. After paying the $100 membership fee and passing a background check, Olomina booked a room for $138 per week.
PadSplit seemed like a godsend. The all-inclusive price was far lower than the city’s average monthly rent of more than $1,200, and no security deposit or long-term lease were required. The Wi-Fi was a bonus. “I would finally be able to get back to work at my sales job,” she says.
Olomina feared something had gone horribly wrong when she opened the door to her new home and found a man on the bed “just lying there, staring at me,” she said. The stranger seemed reluctant to budge. When he finally left, Olomina inspected the room and found that it was “filthy” with a “dirty and sticky” bed. When she opened the closet door, she found a 44-ounce cup full of urine sitting on the floor.
When Olomina called PadSplit to complain, an agent offered to have the space cleaned. But the next day, the room was still in the same condition. Another person in the house told Olomina that the same man had been going in and out of her room. Olomina contacted PadSplit again. “I told them that I was going to be on the street because a guy had a key to my room,” she said.
These kinds of issues aren’t uncommon for PadSplit. Tenants (the company refers to them as “members”) and neighbors have reported everything from lax security to aggressive or abusive roommates to landlords who don’t fix problems, including backed-up toilets. Since PadSplit doesn’t own most of the homes in its portfolio and doesn’t connect members and property owners, it can be hard for tenants to know who to contact when problems arise or who to blame when they aren’t fixed.
This rooming-house model isn’t new, but the recent rise in shared living reflects the realities of the U.S. housing crisis. Rents have risen 20% across the board and as much as 50% or more in some major cities; wages haven’t kept up, and the stark inequity has meant that people are unable to find stable, affordable housing. The New York Times reported that in 2022, the number of dormitory-style developments increased 20%.
And while some rooming houses attract affluent professionals with amenities like gourmet kitchens and parties, they’re increasingly seen as an affordable housing option. As a result, municipalities from Minneapolis to San Jose have revised zoning laws or invested in “co-living” developments.
PadSplit is a reflection of that trend: The average annual income for its renters is $27,000, and the company says 40% of its members have experienced homelessness. Tenants report mixed experiences with its housing. Taylor Northern, a retail employee, has stayed in a series of PadSplit spaces in Florida. The 36-year-old says one bedroom was so small that it seemed like a converted closet “meant for people to store coats and shoes.”
In another PadSplit rental, Northern became anxious when he heard occasional gunshots outside and saw activity that looked like drug dealing. After the property manager told him that nothing could be done to improve security, he transferred to a different house. But even though Northern had some negative experiences—and faulted PadSplit for not doing more to vet property owners—he acknowledged that these kinds of setups do offer advantages. “Prior to PadSplit, I was doing a mix of staying in motels and sleeping in my car,” Northern says.
Olomina, for her part, was ultimately transferred to a new PadSplit house and offered a refund. But it’s unclear whether that would have happened if I hadn’t read about her experience in a Facebook group and contacted PadSplit founder and CEO Atticus LeBlanc. Olomina said she was pleased with her new situation, but she was angry that the path to a safe and clean room required the intervention of a reporter.
Before discovering PadSplit, Olomina had lived in a different shared housing development that smelled like urine and was full of roaches. One night, a cotenant slashed her tires. PadSplit was a step up from that house, but it still felt like another kind of exploitation. Olomina said it seemed like most of the company’s properties were in Black neighborhoods. “PadSplit is preying on low-income Black people,” she told me.
Adrienne Dowd moved into an Atlanta PadSplit last year after leaving an abusive relationship and after a bout of COVID-19 left her drowning in medical bills. One of her cotenants began peeping in her window and “trying to make advances,” she said. When the man refused to take no for an answer, Dowd began spending her days away from the house to avoid seeing him. She contacted PadSplit to report the behavior. An email response advised her to “talk it out” with her roommate. She was furious.
Months later, after Dowd got a protection order from the police, PadSplit finally took action to remove the man from the home. When three police officers arrived to escort him out, he called her “bitch” and “whore” as he left. She says her main concern with shared housing is that it may become a replacement for domestic violence shelters for women, which can be especially problematic if abusive behaviors are present there as well. “If there aren’t beds in a shelter, this is their only option,” she said.
Tenants aren’t the only ones with concerns. In Houston, after two people died in a boarding house fire, the city issued new rules for operators, including requiring permits. In a suburb of Atlanta, neighbors complained about trash, noise, and numerous cars parked in front of PadSplit properties. Last year, affordable-housing activists in Salt Lake City protested to stop a (non-PadSplit) rooming house development. They argued the model turns basics—such as private bathrooms—into luxuries, which exerts upward pressure on rent prices for everyone.
Those problems haven’t stalled the company’s growth. Founded in 2017 in Atlanta, PadSplit has grown to encompass 6,500 rental units across the U.S. and 5,300 renters. PadSplit has received $35.2 million in venture capital funding, and in 2022 Inc. listed it as one of the fastest-growing real estate firms in the country.
It’s easy to see why landlords gravitate toward this model. Heather Wren, an Atlanta-based landlord, partnered with PadSplit in 2018. She started with one property that had formerly been occupied by a woman with three children who was using a housing choice voucher via a program run by the Department of Housing and Urban Development (HUD) that pays a portion of low-income tenants’ rent. Wren converted the home to a PadSplit that housed six individuals who weren’t receiving the government subsidy. She quickly discovered what studies have long shown: Renting to poor people is good for business.
“PadSplit has been the key to higher profits,” Wren told me. She now owns 10 properties with a total of 65 rooms and plans to keep growing.
When I interviewed LeBlanc in March, he contended that the real problem is not with his company but with government inefficiency. PadSplit’s roots go back to 2008 when LeBlanc saw signs of the impending foreclosure crisis in Atlanta.
“It was disturbing to see what was going on in some of these neighborhoods,” he said. “And I knew that housing projects were also shutting down.”
The former land broker began buying properties and renting to tenants who held government vouchers. He quickly became frustrated by the bureaucracy. Partnering with the government “came at a cost,” he said. After meeting two tenants who complained about the waiting list for vouchers, LeBlanc explored the shared-housing model.
“I’m still a proud supporter of housing choice vouchers,” he said. “But the unfortunate reality is that with these local and federal programs, there is little incentive to do something that is efficient and solves the problem so much as conforms to the rules that were laid out.”
There’s little doubt that rooming houses can offer a more affordable housing option for many people. PadSplit estimates that its renters save about 40% on rent. But critics have raised alarms about private solutions to a national crisis.
In Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, historian Keeanga-Yamahtta Taylor writes that “the heart of the civil rights struggles of the 1960s” was a demand for fair housing laws enforced at the national level. Then-President Richard Nixon resisted these demands and shifted the responsibility to the states. During the 1980s, thousands of public housing units were lost due to neglect and lax oversight. President Bill Clinton’s HOPE VI program razed public housing developments across the country and didn’t replace them with new construction.
LeBlanc is aware of that history. “This problem has been going on my entire life,” he said, noting that he also recognizes that the lack of affordable housing affects some more than others. “When you’re talking about low-income, low-opportunity populations [in Atlanta], you are predominantly talking about African American populations,” he said. But he believes the problem is best solved by a private sector that can “create profitability while creating more accessibility for the income segment that doesn’t currently have enough supply.”
Edward Goetz, a professor at the Hubert H. Humphrey School of Public Affairs at the University of Minnesota and the author of The New Deal in Ruins: Race, Economic Justice, and Public Housing Policy, contested this claim. “The market doesn’t produce affordable housing and hasn’t for decades,” he said. “We simply don’t devote enough public resources to the issue.” He worries that a deregulated market “has opened up opportunities for entrepreneurial ventures.”
Deregulation has likely been key to PadSplit’s success. In the years after WWII, the federal government controlled the cost of about 80% of rental housing. More recently, pandemic-era tenant protections kept millions of people in their homes. But as the programs ended, evictions spiked to pre-pandemic levels and rents skyrocketed. The typical American renter now spends more than 30% of their income on housing.
One result has been long waiting lists for public housing. In Houston, where Olomina lives, the waiting list was reopened in 2023 after being closed for more than four years. According to David A. Northern Sr., president and CEO of the Houston Housing Authority, 35,000 people applied in 30 days.
A main obstacle to affordable housing in Houston, as elsewhere, is a decline in funding. A 1998 law bars most construction of new public housing, and about 10,000 units are lost each year because public housing authorities can’t afford to maintain them. One result is that three-quarters of low-income households don’t receive federal rental assistance.
“HUD expects us to figure out locally how to create affordable housing,” Northern said. In 2021, he led a coalition of housing authorities that successfully sued HUD for some of the cuts. But the problem has only expanded.
It may get worse. This year, the Republican-led House announced plans to phase out housing choice vouchers for good. While the plan may not get through Congress, it shows how vulnerable low-income renters are to budget cuts in Washington, D.C.
These conditions are a major reason for the success of housing alternatives like PadSplit. They also speak to how thinking about the government’s role in housing has changed. Goetz sees PadSplit as part of a trend of short-term solutions that don’t address underlying conditions. He would like to see a reconsideration of New Deal housing models that were funded by public investment and organized at the local level.
“It wasn’t about poor people and about lower-income people,” he said. “Public housing in the 1930s was really meant to be a union- or class-based effort.” Goetz also warned that market-based solutions risk reproducing discrimination: “If dorm-based housing becomes a second-class version of affordable housing that ends up disproportionately housing people of color, that becomes a real issue.”
Ann Larson is a writer and activist focused on economic justice. Her writing on education, debt, and low-wage work has appeared in the New Republic, the Chronicle of Higher Education, and the Los Angeles Times, among other publications. She is co-author of Can’t Pay Won’t Pay: The Case for Economic Disobedience and Debt Abolition and has given many invited talks on debtor activism.
Co-published with Fast Company.