New Western and PadSplit have entered a partnership aimed at increasing affordable co-living housing, effective last week.
New Western cofounder and President Kurt Carlton told HousingWire the collaboration will allow investors to access PadSplit’s model for converting single-family homes into shared living spaces — while leveraging New Western’s large property inventory.
“(PadSplit) will help you reconfigure a house if it meets the right floor plan, so that you can fit six people in it, and they’ll manage it for you,” Carlton said. “They’ll bring the tenants, but it’s a co-living space in a single-family home.”
The right fit
Carlton said the decision to work with PadSplit was driven by the companies’ areas of expertise fitting together in just the right way — and finding new ways to help investors.
“We’re the category leader in the space, where, as of last quarter, we were the number one homebuyer in the country, about more homes than all the iBuyers, everybody else,” he said. “We’ve got the inventory and (PadSplit has) this unique strategy that they’re really good at,” he said. “So it provides a better ROI for the 250,000 investors on our platform.
“They can be exposed to a new way of renting out a house. So that’s a win for our investors, but it’s also a big win for housing, because you’re able to increase density without having to even look at a zoning requirement.”
He said the approach offers a practical solution to add housing supply without new construction.
Integration, investor Incentives
When asked about the structure of the arrangement, Carlton described it as a data integration.
“We’re providing the inventory, and some incentives to our investors,” he said. “We started about two years ago, trying to work on things that are bigger than New Western like the affordability narrative and education.”
The companies will maintain separate access points, though New Western investors will have a streamlined process for connecting with PadSplit.
“They’ll still access it through PadSplit,” said Andrea Merrill, vice president of marketing at New Western. “Essentially, they inquire with them. They say they came from New Western, or we kind of have a special link with them, as well, and we have a sync where we verify that they are a New Western investor. So it’s a pretty easy sign up process for them.”
PadSplit services
PadSplit’s model allows owners to rent out rooms individually — with weekly rent covering furniture, utilities and internet.
The company says the approach has created more than 21,000 rooms and housed over 50,000 people.
“Co-living is no longer a niche. It’s a proven solution to our housing crisis and a compelling opportunity for investors,” PadSplit general manager Adam Kolojejchick-Kotch said.
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