HomeShare Startup Aims to Alleviate Rental Burden
In cities across the country, renters are feeling the burden of rising rental rates. High-cost areas like large cities are hit especially hard by high rents. A new startup, HomeShare, has partnered with 10 properties in San Francisco, Silicon Valley, and New York City to match renters with roommates to share the space and cost of high-priced rentals. HomeShare functions by converting living rooms into an extra bedroom, so roommates each get their own bedroom and closet, and in some cases a private bathroom, for a fraction of the market rental rate.
Since 2016, HomeShare has received 30,000 applications in San Francisco alone. Prices for HomeShare rentals start as low as $1,125 a month for a converted room, $1,500 a month for a private room, and $1,700 for a private room with a bathroom. In comparison, as of November 2017, the median rent for a San Francisco one-bedroom apartment unit was $3,400, based on data aggregated from rental listing websites.
Part of the rapid price appreciation problem is due to an oversaturation of luxury versus affordable housing. This imbalance is happening in the single-family housing market as well. Builders see more profit from luxury housing. HomeShare founder and CEO Jeff Pang explains, “there’s plenty of housing, it’s just all in this luxury segment.”
Through HomeShare, the glut of luxury housing is repurposed for renters with a lower budget. As renters, especially Millennials, migrate to dense urban areas, HomeShare and similar services like Common, HubHaus, and WeLive, make it possible for them to secure housing.
In most metros around the country, the average rental rate exceeds the average monthly mortgage payment, and this discrepancy continues to divide the wealth between renters and owners. Traditionally, owning a home is the first appreciating asset a person will own and the first step toward building wealth. With rental rate appreciation making it harder to save for a down payment, services like HomeFundMeTM offer an alternative path to achieving the dream of homeownership.
Sources: Business Insider, Curbed, HomeShare