Sixteen years ago, Atticus LeBlanc was standing outside a rental home he was preparing to put back on the market when Mitch, a neighbor, approached him with a major issue.

“He came to me and said, ‘Can me and my friend, Otis, come rent rooms in your home?’”

Mitch and Otis wanted to each pay $100 a week — the same amount they’d been paying for a room in their dilapidated boarding house. When LeBlanc crunched the numbers, he realized they were locked out of better options in the Atlanta area. No wonder they’d stayed so long in a place that was barely livable, with structural dangers and no viable alternatives.

Their story is far from unique — and it’s becoming increasingly common. Across the country, the supply of affordable housing has plummeted, driving rent prices ever higher. Since 2001, median rents have risen by 21%, while incomes have grown by just 2% (inflation-adjusted).

Standing there with Mitch, LeBlanc stumbled onto a solution hiding in plain sight. “I realized I could give them (Mitch and Otis) a much better option for the same price they were paying for this piece of junk, and it would actually be more profitable for me to do that,” he said.

LeBlanc eventually founded PadSplit, a social enterprise built on the lesson he learned from Mitch and Otis so long ago. The organization — and its online platform — helps property owners convert single-family homes into co-living spaces for low-income renters, while removing many of the logistical and financial barriers that often prevent access to stable housing.

That insight has since impacted the lives of more than 50,000 low-income renters across 30 states and saved taxpayers over $5 billion in housing subsidies.

The company is just getting started. In its first six years, PadSplit brought 10,000 units online. Then, in just 16 months, it doubled that number — clear evidence that demand for this kind of housing is growing rapidly.

Could this be the innovation that complements or even outpaces traditional government approaches?

What problem are we trying to solve?

Most economists will tell you America’s housing crisis is largely caused by an imbalance between supply and demand. At first glance, it seems simple: We don’t have enough homes that low-income renters can afford, so we need to build more.

Here’s what the data tells us about the scope of the problem: The United States faces a shortage of 7.1 million affordable rental units for extremely low-income renters.

Economists warn that subsidies alone can’t fix a market this strained. Government spending often increases demand without meaningfully expanding supply, fueling the upward pressure on rent prices and creating a feedback loop where rising rents lead to greater need, which in turn leads to more subsidies.

The problem is massive, complex, and expensive, so it’s easy to assume only the government has the resources to fix it. However, LeBlanc argues we’re framing the problem all wrong, and that individual investors can play a powerful role in solving it at scale — and often more nimbly than government programs alone.

More houses of all types are needed — single-family, multifamily, ADUs, and more — and the market should be free to respond to local needs. Along with building new housing, repurposing existing housing to accommodate more people can also be part of the solution.

LeBlanc pointed to the mismatch between today’s housing design and current demographics. In the 1950s, a typical home housed a family of four in 900 square feet. Today, single-family homes average about 2,600 square feet, often with just one person living in them. He argued that rethinking how existing space is used could dramatically ease housing pressure.

PadSplit’s model helps demonstrate how zoning laws and other regulations often stand in the way of innovative solutions. In many cities, shared housing like PadSplit is illegal due to outdated rules. Reforming these policies is essential to expanding housing access and allowing a broader range of solutions to flourish.

The status quo market fails to account for a basic human need

Over the years, landlords have stacked up all these requirements: You have to earn three times the rent, have a certain credit score, pay a big deposit, and set up your own utilities.

“The barriers to entry have gotten higher because housing providers want to mitigate their risk,” said LeBlanc. “Take upfront deposits. A landlord wants to see skin in the game. They view that deposit as a mitigant to eviction, to damage, what have you. But I have yet to see any empirical case studies around deposits actually helping to minimize damage or improve payment rates. They don’t really do anything except make it harder to lease your unit.”

PadSplit has proven the opposite. There are no deposits and no minimum credit scores. The company’s eviction rate is just over 1%, and the rent collection rate is 97.4%.

LeBlanc designed PadSplit based on the assumption that people want to keep a roof over their heads. It’s another lesson he learned from Mitch and Otis.

“Otis made $684 a month, but he always paid on time,” LeBlanc said. “That’s not supposed to be possible. That’s when I started to question the conventional wisdom of any book on real estate investing or being a landlord.”

People are deeply committed to maintaining stable housing when given a fair chance and flexible support. In LeBlanc’s experience, the issue isn’t risk — it’s logistics. When paychecks don’t align with due dates, and they’re juggling multiple bills alongside daily expenses, managing cash flow becomes the real challenge. PadSplit helps ease that burden by bundling utilities into the rent and letting members choose to pay weekly or bi-weekly — whichever aligns best with their income schedule.

“If you believe that people want housing and you make money from renting to them, why would you make it harder for them to either get in or pay for their housing?” he said.

What does this look like in real life?

Aaron Reed, 34, a PadSplit member in the greater Atlanta area, juggles three jobs — in construction, pest control, and as a semi-pro basketball player. Originally from Milwaukee, he says relocating to Atlanta would have been impossible without the support of PadSplit.

He pays $197 a week — roughly $850 a month — significantly less than the average $1,600 rent for a one-bedroom apartment in his area.

“It’s definitely given me peace of mind,” he said. “I like knowing that this is a starting point for bigger stepping stones that I’m working on.”

He shares a spacious house with six housemates. Each has a private bedroom, while common areas like the kitchen and bathrooms are shared. Reed has made his room uniquely his own — the ceiling is transformed into a starry, cloudy night with LED lights woven through cotton “clouds.” He describes their living arrangement as a family-style environment. Every Saturday, the house comes together for a “family meeting,” strengthening their bond and sense of community.

“If there’s anything that needs to be corrected, or there’s a schedule that needs to be changed. We get together and discuss how things are going,” he said.

He plans to stay in the PadSplit for two years while he saves up for his own apartment. In the meantime, he’s enjoying the experience. “I love my housemates,” he said. “We get along, we fight, we argue, we make up, but it’s nothing too crazy.”

Back in Milwaukee, Reed had his own apartment. He appreciated the freedom and privacy but admits it came with loneliness. Now, living with PadSplit, he feels a strong sense of purpose and connection. His host (what PadSplit calls landlords), who Reed looks up to as a friend and mentor, relies on him for maintenance and yard work — including adding new bedrooms to the property.

His housemates often ask for his help around the house — usually rewarded with a delicious home-cooked meal. Recently, he chased off some raccoons rummaging through their trash cans, a moment that helped everyone feel safer and that he found downright entertaining.

“Everybody in the home is really nice,” he said. “Everyone respects each other and gives each other their own space. It has been wonderful.”

According to LeBlanc, 90% of PadSplit residents say that they would refer a friend. People’s motivations vary — some value saving money, others appreciate the community or housemates. Some, like Reed, enjoy both.

“A lot of times there are benefits to shared living that you don’t necessarily anticipate,” said LeBlanc. “There are enormous benefits to the community that lives in some of these homes.”

For him, the housing crisis and the work of PadSplit come down to one fundamental question: “Do we as Americans, want to create a world where people who are working full time have access to housing opportunities?”

PadSplit is supported by Stand Together Ventures Lab, which invests in and supports founders and their early-stage start-ups that are challenging the status quo.

Learn more about Stand Together's efforts to make the economy work for all and explore ways you can partner with us.