Rethinking Affordable Housing with Frank Furman
On this episode, Bryce talks with Frank Furman, COO of Padsplit, a privatized affordable housing company and Reconstruct Challenge Grant Recipient. From the Marine Corp to one of the world’s largest toilet paper distributors, Frank’s path has been far from traditional. He talks about how his career ultimately has led him to where he is now and how he balances impact and profit at Padsplit. The belief that it is a disservice to people to expect little of them and a big part of what keeps people where they are economically, is a theme that guides Padsplit. They aim to empower people and part of that is setting expectations and believing they can achieve them.
Affordable housing is a major issue across the country and much of the emphasis on solutions has been in new unit creation for low-income families. In many communities, though, there is existing stock, and the real opportunity is to make that existing stock more affordable. As such, Padsplit helps landlords turn rental properties into pay-by-the-week rooming houses.
Rather than building new buildings, PadSplit works with property owners who are renting out single-family homes. The property owners agree to fix up the houses to a certain standard, and then PadSplit helps them add walls to create new rooms–if there’s a formal dining room or an extra den, for example, those will be converted into bedrooms. Then the company screens potential residents and rents out each room, including utilities, internet, and laundry, for around $550 a month. For a property owner who might have been renting the whole house for $1200, it’s a way to make more money. For renters, it’s a way to save; the average PadSplit member makes only $21,000 a year and saves $460 by renting through the startup. When almost 50% of Americans don’t know where a $400 emergency bill might come from, a reduced cost in housing can go a long way to improving prosperity for them and increasing the opportunities they see for themselves.
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