States Legalize Co-Living; PadSplit Adds Host Insurance

Legislative efforts to re-establish modern boarding houses are accelerating across the United States, driven by a critical need for more affordable housing options. Several states have successfully passed legislation to facilitate co-living, while others have bills pending in committees or awaiting votes. To capitalize on the potential growth spurred by these new laws, Atlanta-based PadSplit, recognized as the nation's largest co-living marketplace, is introducing an insurance program designed to eliminate barriers that have previously deterred property owners from entering the shared-housing market. This new insurance offering, underwritten by EmpoweredRE Insurance and branded as HostGuard, provides a bundled package of protections. These protections encompass coverage for property damage, tenant evictions, and general liability. Furthermore, HostGuard includes coverage for zoning actions that might restrict occupancy. Lawmakers have specifically focused on occupancy limits, which are regulations dictating the maximum number of unrelated individuals permitted to reside together in a single dwelling. Iowa was the first state to enact reforms in this area, passing a law that effectively removed local restrictions on the number of unrelated renters. Following Iowa's lead, "Golden Girls" laws, a term referencing the popular 1980s television sitcom, have been passed in Oregon, Colorado, Washington, and Hawaii. Texas also enacted its version of such legislation last year as part of a broader housing reform package. However, the Texas law's application is currently limited to college towns, including College Station, which is home to Texas A&M University. At the municipal level, cities like Seattle and Minneapolis have incorporated co-living legalization into their zoning codes. Austin has also taken steps to remove its cap on the number of unrelated roommates allowed in a residence. In Pennsylvania, a bill that initially passed the House has been modified to exclude college students and is now awaiting action from a Senate committee before the legislative session concludes at the end of November. Other legislative initiatives have encountered setbacks. A bill in Connecticut successfully passed the Senate earlier this year but ultimately failed to pass the House. In Rhode Island, a separate bill known as the Restoring Options in Occupancy Models Act stalled alongside other housing reform efforts, a situation largely attributed to a change in the House speaker. This Rhode Island bill differs from the roommate-focused legislation, as it directly targets single-room occupancy (SRO) housing. If enacted, it would mandate that cities permit the construction and operation of SRO buildings by right in any zoning district where residential use is already permitted. The PadSplit insurance program aims to provide hosts with greater security and confidence, thereby encouraging more property owners to offer co-living spaces and increasing the availability of affordable housing solutions.