America’s empty bedrooms are up for grabs

After a breakup in late 2022, Todd Waller, a social worker living in the Atlanta metro area, decided to find a new place to live quickly. He found an advertisement for PadSplit, a company founded in 2017 that allows property owners to rent out individual furnished bedrooms in single-family homes on a week-by-week basis. Waller was impressed by the simplicity of the process – he could get approved and move in on the very same day without a security deposit.

His weekly rent was just $180, which allowed him to save a significant amount of money. Despite earning a decent salary, Waller struggled to have any money left after paying his bills, and the financial relief provided by sharing a room with six other people made the tradeoff worth it.

The issue of co-living, or house-sharing, has been a contentious one for decades. Cities in the 20th century banned cheap rented rooms, and a 1974 Supreme Court ruling still determined who could be considered a "family" under zoning laws. This is now being challenged on two fronts: a Kansas lawsuit asking the Supreme Court to revisit that precedent and "Golden Girls" bills that have passed in four states, spreading across the country.

The next few years will determine whether co-living becomes a normal option or remains a niche workaround. According to Zillow, there are roughly 21 million empty nest households in America, which could potentially be rented out as co-living spaces. However, lawmakers are also exploring turning post-pandemic vacant office space into apartments.

Advocates argue that co-living can help people experiencing homelessness avoid the slide into shelter living, especially when models allow for almost immediate move-in without a deposit. Despite the positive potential, co-living still faces strong opposition due to long-standing discriminatory zoning codes, which enforce traditional nuclear family arrangements in single-family housing.

However, the momentum seems to be shifting, with more states considering new laws and legislation to accommodate co-living, and companies like PadSplit driving private capital into the model.