At the end of the 19th century, active construction of income houses began in Moscow. This was linked to the rapid development of industry, which led to an influx of various social groups into large cities like Moscow and St. Petersburg. After the abolition of serfdom, thousands of peasants rushed to the cities in search of work, along with workers, clerks, and students. They all needed housing, and purchasing real estate was often impractical and expensive. Many sought temporary but decent places to live. The construction of large houses for rent turned out to be a profitable venture. Owners of old Moscow mansions sold land to more enterprising and affluent fellow citizens or began building fashionable apartment buildings on their plots. By the early 20th century, income houses were being built not only by private individuals but also by joint-stock companies or large enterprises.

The income house on Malaya Polyanka (7, building 5) was erected in 1914. The land and the old estate belonged to the famous textile merchant dynasty of the Khudovs, hence the house bore their name. The location was quiet and peaceful, and the ringing of nearby church bells delighted the local residents. To create this house, Moscow architect Vladimir Vladimirovich Sherwood was invited, known for his works in the Art Nouveau and Constructivism styles. The building turned out to be beautiful: red brick, an asymmetric facade, and an impressive bay window of the staircases. The house was equipped with modern conveniences: electricity, an elevator, plumbing, and sewage. There was a separate entrance for the staff from the kitchens.

The basement, accessed by a separate door, was used by the service staff: a janitor, a concierge, and cleaners. However, the peaceful life of the Khudov residents lasted only three years until the October Revolution. After the revolution, the spacious apartments with high ceilings turned into communal living spaces, with families settling in each room. In the 1940s, the building was raised by two floors, becoming six stories tall. Five floors remained residential, as the first floor was almost at the level of the second, requiring residents to climb a high staircase to reach their apartments. In the 1990s, the communal apartments were vacated, and the spirit of prosperity and tranquility returned to the house, complemented by a creative atmosphere. In 1990, collector and art manager Marat Gelman opened a gallery here, where exhibitions, concerts, and discussions were held for over 10 years.

The income house of the Khudovs is also known for being the residence of the great Russian writer Ivan Shmelev from 1915 until his emigration in 1922, in apartment number 7. His major works, such as "The Sun of the Dead" and "The Summer of the Lord," were created later in France. However, it was in this house that Shmelev contemplated and wrote stories and essays that were included in the collections "The Hidden Face," "Carousel," "Harsh Days," and the novella "How It Was."