More states legalize co-living; PadSplit adds insurance for hosts

Legislative efforts to bring back the modern boarding house are gaining steam nationwide, driven by the need for more affordable housing.

Several states have passed laws. Others have legislation stalled in committee or awaiting a vote.

To build on potential growth from new laws, Atlanta-based PadSplit – the country’s largest co-living marketplace – is launching an insurance program. The program aims to remove barriers keeping property owners out of the shared-housing market.

EmpoweredRE Insurance underwrites HostGuard, which bundles protections for property damage, evictions and general liability. It also covers zoning actions that limit occupancy.

Lawmakers have targeted occupancy limits, which dictate how many unrelated people can live under one roof. Iowa was the first to enact reform, passing a law that eliminated local caps on unrelated renters.

Co-living legislative moves

So-called “Golden Girls” laws – named for the 1980s TV sitcom – have passed in Oregon, Colorado, Washington and Hawaii. Texas enacted its version last year as part of broader housing reform. That law applies only to college towns, including College Station, home to Texas A&M.

At the city level, Seattle and Minneapolis have legalized co-living in their zoning codes. Austin removed its cap on unrelated roommates.

A bill in Pennsylvania passed the House, though lawmakers watered it down to exclude college students. It now awaits Senate committee action before the session closes at the end of November.

Other efforts have stalled. A bill in Connecticut passed the Senate but died in the House earlier this year. In Rhode Island, a separate bill – the Restoring Options in Occupancy Models Act – stalled alongside other housing reforms, largely due to a change in the House speaker.

That bill differs from the roommate-focused legislation; it targets single-room occupancy housing directly. It would require cities to permit SRO buildings by right in any zone where residential use is allowed. The act would also block discretionary reviews and neighbor vetoes, and allow up to eight sleeping units on a single-family lot.

Sam Hooper is director of government affairs for the newly created National Co-Living Association. He told HousingWire TBD the bill will likely be reintroduced next year.

“We’ve got a few other states in the pipeline,” Hooper said.

PadSplit’s program

Whatever the legislative vehicle, the goal is the same: unlock housing that costs less than a typical apartment.

PadSplit designed its platform to help low-income workers find accessible, affordable housing. It has housed about 85,000 people across more than 35,000 rooms nationwide. Last December, PadSplit expanded into Seattle, Portland, Sacramento and Nashville.

Atticus LeBlanc, PadSplit’s founder, told HousingWire TBD that his company drew inspiration from short-term vacation rental company Airbnb. The short-term rental company’s AirCover program added a liability insurance layer for property owners.

“We know that it accelerated their growth to a significant degree, and we’re optimistic that it’ll do the same for us,” LeBlanc said.

“It’s super important for us to introduce some risk mitigation for those would-be hosts or landlords who are sitting on the sidelines who think there’s no way I could ever foresee moving this ‘high-risk customer’ into my housing.”

With HostGuard, LeBlanc said the goal is to ease concerns about evictions, property damage or conflicts among housemates.

Every property added to the platform going forward will carry complete coverage under the new program. Members already on PadSplit will see no change unless they move to a new listing, where the new terms apply. PadSplit will cover the cost with a 2.25% increase in member transaction fees, or roughly $4 a week per user.

On the platform, hosts, PadSplit’s term for landlords, can approve or reject applicants.

“We’re hopeful that introducing HostGuard will reduce the rejection rate or increase the approval rate for those residents as well.”