What appear to be strangely-proportioned townhomes popping up in Houston’s Third Ward, University of Houston area, East End and other neighborhoods are turning out to be small dorm-like structures for single adults chasing affordability.
The reason is co-living, a niche housing model that’s starting to take on a more institutional feel in Houston. A new 10-bedroom, 10-bathroom building in the Third Ward for instance is one of roughly 33 newly built or in-progress co-living properties backed by investors working with the Passive Investor Network, a Houston-based real estate investor network, according to the Houston Chronicle.
Rather than carving up older houses, PIN projects are purposely built for PadSplit, an Atlanta-based firm that rents out private bedrooms in shared homes. Often described as a grown-up version of a dorm, PadSplit pitches itself as an affordable alternative for renters priced out of traditional apartments by deposits, income requirements and bundled fees.
The new homes are scattered across the Third Ward and University of Houston area, Near Northside, Independence Heights and the East End. Most PadSplit listings in Houston — nearly 2,000 rooms metro-wide — are still in older properties, the outlet reported. But build-to-rent investors are increasingly testing newly constructed co-living units across the Sun Belt, including in Houston, New Orleans, San Antonio and Jacksonville.
At PIN’s Third Ward property, dubbed the “Juice Joint,” bedrooms are spread across three floors, with multiple kitchenettes, shared laundry and communal refrigerators. Each room has its own bathroom, the outlet reported. An Art Deco speakeasy theme runs throughout, with private rooms named after cocktails and finished with brass fixtures and dark tile.
Rents for PIN Group’s new-build co-living rooms run from about $1,000 to $1,200 a month, depending on the site. That’s roughly in line with Houston’s average rent for a Class B one-bedroom apartment and still well below newer Class A units, which average about $1,471 per month, according to MRI Software. Newer build-to-rent single-family homes typically lease closer to $2,000, according to John Burns Research and Consulting.
PadSplit backers argue the savings show up elsewhere. Utilities, internet, furniture and cleaning are usually included, and tenants aren’t locked into yearlong leases. Move-in fees are typically about $100, sometimes waived, compared to $1,600 to $1,800 upfront for many apartments in the Third Ward area, based on the publication’s analysis.
PadSplit also skips traditional credit checks and steep income thresholds, the outlet reported, lowering barriers for renters who might otherwise be shut out, tying investment opportunity to density rather than rent growth.
— Eric Weilbacher
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