Co-Living: New Real Estate Category or “Dorms for Grown-ups”?
Anyone who’s seen the HBO comedy Silicon Valley knows what a “hacker house” is. A group of twenty-somethings pool together their limited resources to rent or buy a single family home where they can pursue their dream of developing the next killer app. Each resident contributes to overall living expenses, sharing chores, and there’s a common living area. In the case of Silicon Valley, the mostly-male set-up is more reminiscent of a fraternity than a viable living situation for young professionals.
But now, with the rise of a new kind of real estate start-up, could the concept of co-living gain traction beyond the caffeine-fueled world of software engineers?
Communal living isn’t new. What is new are companies like The Collective, OpenDoor, WeLive, and Common which hope to expand and promote co-living as a new category in the real estate market.
These companies purchase properties and reconfigure them — not as apartments or condos — but as shared spaces specifically designed to meet the needs of their members. For those just starting out, co-living is an option that provides a room and shared common area where young professionals can begin to build their careers. Co-living also offers individuals a range of amenities they could never afford on their own, such as free internet, housekeeping services, security, etc.
Millennial Lifestyle vs. Futuristic Utopia
Working long hours often makes it hard to make new friends outside of work. For a generation raised on social media, co-living offers the opportunity to connect with others in the real world. Co-living companies are pitching this new lifestyle as a place where like-minded millennials can meet others who share their world view.
One example is OpenDoor, which has available homes in San Fransisco, Oakland, and Portland, Oregon. OpenDoor is “reimagining home for the collaborative age.” For this start-up, co-living is not just a housing solution, but an alternative to, “mainstream housing products…based on antiquated notions of hyper-individuality, consumerism, and the suburban American dream.”
OpenDoor envisions the future of humanity in “uber-sustainable cities…where buildings produce their own energy from clean sources, where water is treated as precious, and where urban planning is based around a walkable lifestyle rather than cars.” OpenDoor’s mission as a company is to innovate, “new models for real estate…to catalyze the transition to a sustainable and connected built environment, one that will sustain life for generations to come.”
Companies like OpenDoor are opening properties in tech-dominated locations, which means this utopian future comes with a hefty price tag. And, a recent survey conducted by Swedish furniture giant Ikea — One Shared House 2030 — found that while most respondents don’t mind sharing kitchens, gardens, and workspaces, most indicated a preference for sharing a house with no more than 10 people — a number significantly lower than co-living companies are offering. In fact, according to an article in Fast Company, “The Collective has a giant tower in west London with 550 beds, WeLive is building a skyscraper in Seattle that will have 384 apartments, and in 2018 the U.S. company Ollie is launching a co-living house with more than 470 apartments in Queens, New York.”
What Agents Should Be Considering
Millennials, saddled with an average student loan debt of over $26,000, are finding themselves locked out of the housing market by escalating home prices, rising interest rates, and an inventory shortage. Rising rents and a lack of affordable housing, particularly in and around large urban areas, has given rise to this new co-living trend.
The questions are:
What are the implications for real estate agents in a tightening housing market? Is this a real trend or a fad? A stop-gap measure to meet the needs of a generation about to dominate the job market, but find themselves waiting to start a family and unable to either find or afford a single family home? Or, is it a blueprint for a new way of living? Stay tuned.