Is Co-Living the Future of Housing?
Houston, we have a housing problem: Our current paradigm is expensive, inflexible, limiting, and isolating.
The suggestion that our traditional housing model is flawed is an understatement. It’s inexcusable that so little attention has been paid to improving or transforming the options for fulfilling this basic human need.
Until now.
The nature of work and life is changing at a rapid pace, and the current limitations in the world’s housing model are holding back progress.
One solution to our archaic housing paradigm could be co-living (with and without a co-working element). The potential implications for seizing the plausible business opportunities to serve this emerging market are of monumental magnitude.
You possibly experienced 1 of 4 reactions while reading that paragraph:
1. What the hell is co-living?
2. Ugh! Sounds like living in a grown-up hostel. Read: “Definitely not for me.”
3. Sounds intriguing. “Maybe it could work for me?”
4. Been there/done that. “I have my opinions.”
Regardless of your current thoughts on the topic, let’s take an objective look at the major shortfalls of modern-day housing and assess how co-living can potentially solve them all.
Co-living Defined
Co-living is a new, synergistic form of housing based on shared economy. Basically, it’s housing reimagined to align better with the needs of modern-day life.
On a physical level, residents typically have their own bedroom & bathroom but share cooking and living spaces.
On a practical level, residents share living expenses, which are typically lower than what they would spend on their own.
On a philosophical level, residents may share a common set of interests or values.
What makes co-living so great?
It’s been a hot minute since civilization decided to reinvent how and where we live. The concept of renting or leasing a home is so long standing, it seems to have originated in the years B.C. and has continued in some form ever since: The Roman Empire, feudal system of the Middle Ages — you name it.
Renting in modern day society isn’t so far removed from days past; it’s just more structured and standardized. Regulations vary by city, county, state and country, but renting an unfurnished property for a term of at least 1 year is the norm in any landlord-tenant relationship. Throw in real estate or rental agent fees and you have yourself a pretty inflexible situation.
Inflexible Lease Terms and Pricing Model
When you sign on the dotted line and receive your house key, you:
- Enter into a rental contract with designated start/end date.
- Pay first month’s rent and last month’s rent.
- Pay a security deposit.
- Are responsible for covering the agency fee or commission (from a % of the monthly rent up to 2–3 months’ equivalent of rent, depending on your city or country).
- Have to make a utilities deposit.
- Are responsible for utilities activation and/or contracts.
- Are required to do credit and background checks plus references. In some locations, like NYC, proof of income is also important.
On top of that, you need to hire a mover for your furniture or buy new furniture to fill this new space. When the 12 months are up, the most likely outcome — and the path of least resistance — is to renew the lease.
Because one thing we can all agree on is that moving is an expensive pain in the ass.
Co-Living Solves This on Every Level
- Typically, there’s no lease agreement or minimum commitment (with exceptions). You decide when you want to come and go.
- You pay only for the term you want to stay for.
- There’s no security deposit (sometimes a credit card hold).
- You owe no agency fees or commissions.
- Utilities are included so no out-of-pocket deposit.
- You don’t need to set up any water, electricity, internet or cable contracts.
An added bonus is that most co-living spaces are already fully-furnished, so you don’t need to move anything but yourself, clothing and personal items. This eliminates the primary headache-inducing causes of stress and expenses during a move. Hallelujah.
What are some of the other pros?
It’s Affordable
While the face-value of an unfurnished rental apartment may appear cheaper than co-living (sometimes), once you add on all the other monthly expenses and one-time sunk costs, plus the inherent time and opportunity costs associated with a move, reality may paint a wholly different picture.
Co-living oftentimes becomes either a very competitive option or the obvious, more affordable option once you crunch the numbers.
Global Mobility Trends
Without utilities contracts, rental agreement or furniture holding you back, you could potentially live anywhere with a remote job. In 2018, plenty of digital nomads are already taking advantage of their physical freedom, engaging in a type of veritable housing arbitrage.
When you can live anywhere in the world, you can define your cost of living and housing expenses.
For example, you can rent in Bulgaria for €150/month, Berlin for €800/month, London for $2,000/month, or Tokyo for $2,500/month.
Considering the current cost of an unfurnished studio apartment in New York or San Francisco, it’s pretty impressive that you can co-live almost anywhere in the world, including your own hometown, for less hassle and less money. At the time of writing this article, there are co-living options advertised in Brooklyn starting from $1,350/month. The average regular rent price in NYC and SF? Both hover around $3,500 per month. Amongst the highest in the world.
Convenience & Productivity
Besides not having to worry about monthly bills, many co-living establishments come with a built-in co-working option.
This means you can work where you live, eliminate wasted time commuting to an office, multiply your productivity or carve more personal time out of your day. Just walk downstairs or next door and open your laptop.
What would you do with an extra 2–4 hours per day?
If you’re a digital nomad who’s constantly on the road, the benefits compound exponentially. Perpetual travelers can save hundreds of hours per year that would otherwise be (mis-)spent planning out travel.
With co-living, everything is done for you; just show up with your suitcase. There’s no need to worry about finding quality Wi-Fi or supplementing your space with bath towels or kitchen gadgets.
Community Support and Activities
One casualty of the modern-day lifestyle, especially in western countries, is a close-knit collective community. Technology, housing norms and the geographic distribution of towns and cities all contribute to inadvertent isolation at a time when our global population is peaking, creating quite a paradox.
It’s extremely easy to commute to and from work by yourself, eat lunch at your desk, scroll Instagram during coffee breaks, plug in headphones at the gym or get sucked into our phones/social media/Netflix once we get home.
If you are what you eat, you’re also what you do every day. These little things add up and can result in less regular contact offline (especially if you live alone).
For the first time in history, people are spending more time engaged with screens than they are communicating with others face-to-face. Days blend into weeks and we wonder why we feel lonely and distracted whilst being surrounded by people.
These days, it’s necessary to make a conscious effort to connect with others — but our willpower reserves are limited. Going out of our way to dedicate time for cultivating relationships is one more thing to put on the to-do list.
Co-living makes socializing and connecting with others a lot easier by design, as you live in a building full of people sharing communal spaces for cooking, working out, watching TV or relaxing.
There are always group activities going on that you can show up to, or not. It’s always your choice but it’s there if you want to partake.
Built-in Network of Friends
On a similar note, the co-living environment provides an instant group of friends or, at the very least, acquaintances.
When 100+ people dwell in the same building with shared living spaces and regular organized activities and interactions, it’s only natural to find friends — even ones you thought you would never “click” with — because you have the opportunity to meet up on a regular basis.
This built-in group of friends can potentially exist at any co-living space, anywhere in the world. As the old saying goes, strangers are just friends you haven’t met yet.
Potential Mental Health Benefits
More scientific studies are needed on the correlations and impacts of co-living, but one of the basic tenets of psychology is that humans need interaction with other humans in order to thrive and live a happy life. There’s a reason why solitary confinement is one of the worst punishments we dole out as a society.
Co-living can increase the number of human interactions one has on a daily basis. As a result, this can reduce feelings of isolation, increase happiness and likely contribute to better mental health and an overall sense of belonging.
Global Identity
As symbolic walls and physical barriers to entry between countries fall away, the world continues to morph into one community of global citizens. Co-living establishments provide another way for people to connect around the world on both macro and micro levels.
It’s definitely a small world. Residents of Roam.co, with 5 worldwide destinations, might end up meeting in Bali then reconnecting and living together in London or Tokyo.
After trying one type of co-living for the first time, people tend to open up to the concept’s potential. After living at one location, they may be more apt to try more co-living options offered by different companies.
Co-living Influenced Programs and Workations
Concepts like Roam, which is a group of physical buildings run by the same company, are just the beginning.
You can now join one of tens (hundreds?) of co-work/co-live programs and retreat options like Wi-Fi Tribe, Unsettled, Hacker Paradise or Remote Year, all of which organize trips for people to live and work with a group for a week, a month or an year in a number of different locations around the world.
This lifestyle is not possible if you’re locked into a long-term lease with a U-Haul full of furniture weighing you down.
Conclusion
The concept of co-living clearly solves more problems than it creates. While the pros outweigh the cons, you can learn more about the downsides in this article.
You should consider co-living if any of these resonate with you:
- You can’t or don’t want to commit to buying a house or renting long-term.
- You’re looking for a lower-cost housing option with more flexibility.
- You have a remote job or are self-employed and can work from home or anywhere.
- You want a more affordable, sustainable way to travel around the world (compared with paying for hotels or renting on Airbnb).
- You want to live & work in the same building.
- You are interested in growing your social circle, business network and making community a more prominent part of your life.
- You like the convenience and productivity potential that co-living offers.
The co-living industry also presents an extraordinary business opportunity on every level. Solopreneurs, start-ups, real estate developers, REITs, VC’s, hotel operators, and more all have an opening to create something new in this market or enter on a level that makes sense for their expertise, financial resources, product mix, or long-term strategic plan.
Have you ever tried co-living? Would you do it again? How would you describe your experience? Let me know in the comments.
