Co-Living Is Not a Trend, It’s How Everyone Has to Live Now

published Nov 5, 2019
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Credit: Katie Lukes

In my entire 27 years of life, I’ve only lived places where there were a lot of people around all the time. I grew up having at least one family member at home most days, and since college, I’ve had more than 20 roommates. While I cherish the impromptu gatherings that happen just because all of my roommates are home, it would be really great if I could one day live alone. In my dreams, I don’t have to reserve the living room TV to watch a movie or feel like an asshole if I have to leave the dishes in the sink for a couple of hours. But for now I do, because the rent is too damn high.

According to a new analysis from Apartment List, I’m not the only one shacking up with roomies to make rent: While 50 years ago, 42 percent of American households were made up of nuclear families, today it’s only 22 percent. Instead, we’re living in different combinations like unmarried couples co-habitating, married couples with roommates, multigenerational families, and other roommate situations. The analysis points to the fact that, in order to be able to support a nuclear family that lives alone, you have to be in the upper tier of household income. So instead, more and more Americans are coming together to increase density (or raise the number of people who live in a space) in available spaces and creating “economies of scale” (or banding together to lower total costs) to increase their buying power and make rent. (According to a 2017 Trulia analysis, on average, renters save at least 13 percent of their income by tacking on a roommate.)

“Household make-up has been changing and becoming more diverse for the last 50 years—but especially since the recession,” says Igor Popov, the chief economist who worked on the analysis. “Whatever stigma about living with one’s parents in our late 20s or roommates in our 30s and 40s is lessened, if not entirely gone.”

Ah, yes. The recession—that lil’ period of economic history that’ll haunt Millennials for the rest of their avocado toast eating lives. The reason why rents and mortgages are so expensive in the first place? A severe overcorrection from the housing industry in the wake of the mortgage crisis that had developers shifting from building starter homes to less risky luxury condos and apartments (aka the top five percent of priced homes.) Everyone who couldn’t afford to live in a glamorous high-rise (*raises hand*) had to beg for scraps—ahem, fixer uppers—leading to competition at the bottom of the real estate market, causing home and rental prices to go up, up, up. At the same time, though, there was less demand for these new luxury units, causing their prices to go down. Why buy a small one-bedroom, one bathroom apartment in the Financial District for $1M when you could buy a three-bedroom, two-and-a-half bathroom brownstone you could renovate to your liking just a couple of train stops away? All of a sudden, all of these luxury properties began to sit on the market, waiting for someone to call them “home.”

How co-living is filling the housing vacuum

As a real estate editor, I could spew off multiple policy recommendations that would alleviate this compounding problem. However, instead I am going to defer to something I’ve been pitched at least 200 times that’s been deemed the answer to our country’s housing crisis: co-living, aka (often luxury) properties managed by an overarching company where units (or beds) are rented out to multiple, unrelated tenants.

While institutionalized co-housing is not a new concept by any means (for example, dormitories—like those you’d find at colleges or the historic women’s Barbizon in New York—have been providing affordable housing options for centuries), these “adult dorms” are a new, luxury-driven variation on a theme. Marketed towards convenience-obsessed Millennials looking for inexpensive options to live luxuriously, these “adult dorms” come fitted with trendy, name-brand furniture, routine house cleaning services, toiletries, and a packed calendar of social events.

“People are living with roommates for a long, long time. We’re trying to improve an experience that’s already there,” says Eric Rodriguez, vice president of operations at Common.

Up until now, I’ve avoided writing about these “adult dorms.” They seemed to be something that tech bros and rich kids with frugal parents opted for—even though they were more in reach to my budget than the other new luxury buildings I had been pitched. Still, some aspect of those shiny buildings seemed too good to be true, dystopian even.

While 50 years ago, 42 percent of American households were made up of nuclear families, today it’s only 22 percent.

The pitch that essentially broke me? An offer for a complimentary stay at the nodeLA bungalow court in while I was visiting a friend in Los Angeles. In late September, I stayed in one of the six one-bed bungalows for two nights (the court also has two two-bedroom townhomes in the back.) The space was in a great location—just off Sunset Boulevard, two blocks from Dodger Stadium. It was beautifully decorated in minimalist Scandinavian-inspired design, had a Smeg fridge and dishwasher, and even a cute outdoor patio. The only space that was shared were the larger outdoor spaces—and I didn’t see any of the other tenants while I was there.

I did see a lot of my gracious host Tara Stephenson, Node’s community curator and partnerships director, who lived full-time in the bungalow across from me. While the spaces at Node weren’t so communal as they are in more dense cities, Stephenson explained that the co-living tag more referred to the built-in sense of community that came with living in the court, with its frequent get-togethers and expeditions to visit local businesses. Many of Node’s clients are people who had to secure housing quickly after relocating from a new city—usually for work—and are looking an easy transition, both in the move in aspect itself, but also in establishing a local support network. Most tenants sign a year lease to reduce turnover and keep rates low, but some do opt for a shorter stay at a higher price. And though some may permanently stay in their new city, most plan to relocate again in the near future of their career (they are professional Millennials, of course)—and in their new city, if there isn’t a Node for them to stay in, they at least have access to the alumni network.

Of course, this comes at a cost: for the all-inclusive one-bedroom bungalow I stayed in, the rent is $3,000 a month (including $125 for utilities). That’s much more than the area’s median rent, which Zillow puts at $2,200, plus utilities. Though it’s more expensive, it does add a priceless component: Built in-community. Frequent job displacement and community turnover coupled with the individualization of technology has led to a loneliness crisis, too. While I’ve never had to live somewhere I didn’t already have a support system, I know that’s a big issue for many people. The $825 extra each month could be worth it, for some, for all those movie nights, dinner prep chats, and holiday gatherings I take for granted with my roommates.

The co-living conundrum

I have to say, after I left L.A., I had a more positive outlook on co-living. But then I got back to New York City, and the late-stage capitalism of it all really sunk in. While Node didn’t pretend to be a more affordable housing option in Echo Park, many of the New York sites I’ve talked to do. For example, Rodriguez told me that the brand will always aim to be priced 20 percent below market rate rents in the same neighborhood.

While that sounds well and affordable, here’s the catch: They’re comparing a single bedroom in a co-living situation with a traditional studio. I think this is a misleading, an apples to orange comparison. For example, on their website, Common advertises that a room in their Kingston Crown Heights building with between two and four roommates—a block away from where I currently live—starts at $1,485. They place finding a similar room on Craigslist to be a total cost of $1,610 a month and a traditional studio in the area to be $2,610 all together. A block away, I live in a renovated four-bedroom, two-bathroom apartment where the smallest room costs less than $850 a month. Indeed, Common may be more affordable than living alone in the area, but for living with roommates, it’s definitely at the top end of the neighborhood market.

While touring Alta+, a new space in Long Island City, Queens, Ryan Murphy, Ollie’s corporate partnerships manager, told me that co-living has taken off in the past few years since it caters to both sides of the marketplace: tenants get a high value living experience at a lower price point than traditional luxury buildings (of course, by paying a premium and compensating on privacy), and real estate investors and developers have a low-risk way to densify and increase their price per square foot.

Common advertises that a room in their Kingston Crown Heights building—a block away from where I currently live—starts at $1,485. A block away, I live in a renovated apartment where the smallest room costs less than $850 a month.

I started to have a galaxy brain moment: Remember all that inventory those developers created in the wake of the Recession I talked about earlier? Some very smart person realized that they could open up these luxury buildings to a lower price point and unlock a higher price per square foot in already existing developments by increasing density, or the amount of customers that could be sold to on a single plot of land. Since these tall buildings could have more individually-paying customers with a co-living situation, these otherwise vacant buildings became more profitable for investors.

As I’m very familiar with the externalities of real estate pivoting to profit, I asked Murphy how she thought upping price per square foot for consumers would affect housing prices in the neighborhoods they entered—especially since I knew many developments were in hip “up-and-coming areas,” aka those undergoing gentrification. I’m still waiting for her to get back to me on that, but she did remind me that Ollie is not capital A-affordable housing. While entry-level luxury is more their focus, partnering with cities to create affordable housing in the future is not out of the picture. In fact, Common won a NYC Housing competition just last month to bring an affordable housing project to East Harlem.

All co-living spokespeople I asked were adamant that they were actually driving down prices for individual consumers. The only answer I received that directly responded to how co-living models would affect rent in the area was from Common, who focused on how adding more inventory to the market means they wouldn’t be driving prices up in the neighborhood.

“Common’s model adds rental housing where there was none, rather than taking existing apartments off the market,” Rodriguez says. “We only work with real estate developers on completely new ground-up buildings or remodeling existing buildings that are completely vacant and have not been used for housing for years. This is true across all of our cities.”

Still, this worries me: The housing crisis and following gentrification has already made my neighborhood unaffordable to the working class families who made it what it is long before I arrived. As seen in the ApartmentList analysis, I’m only able to afford my $3,650 a month apartment because I split it with five people. But if co-living catches on, who is to say that my landlord won’t decide to lease out this building to a co-living developer who can give him almost twice that monthly rent? I’m skeptical that a solution cut from the same cloth of the housing crisis will help affordability.

The value of interdependence over independence

I’m not going to lie: Reporting about the state of co-living has been somewhat demoralizing. But I’m going to end this story on a more hopeful note: Since co-living seems so utterly geared towards Millennials (which raises a whole other bunch of questions about how this plays into housing discrimination, but this piece is already ungodly long), I was interested in seeing if there were any similarly-styled developments geared towards older folks.

That’s how I found Oakcreek Community, a senior co-housing community in Stillwater, Oklahoma, that Pat Darlington started with eleven other residents in 2012. After watching her father struggle in an independent senior living community and hearing demoralizing stories about those who lived in assisted facilities, Darlington noticed that there were few options for those wanting to age in place, both safely and comfortably—and none in her area.

So she started researching co-housing, a type of housing brought over from Denmark to the US in the 1980s, where residents plan and run their own community according to shared ideals. Whereas retirement communities focus on independence, which Darlington says can cause an “I don’t want to interfere” mentality, she wanted a community that looked out for each other.

“We as Americans in particular have this myth that independence is the end all be all, but no one at any time of their life is really independent,” Darlington says. “We have to focus on interdependence instead.”

After a few years of raising funds and developing the project, the first residents moved in in October 2012. As time of publication, the community has 32 residents that live in 24 “right-sized” homes. Residents have their own home (and own 1/24th of the land), and pay a $301 monthly HOA fee to support a shared common house and garage. And since Oak Creek is resident-owned and operated, there is no-profit margin going to an outside investor. This keeps costs low for residents and allows the concept to be sustainable.

“When you buy a home at Oakcreek, you’re not buying a home, you’re buying a community,” Darlington says. “We can live in our homes for a very long time, if we cooperate and help each other.”

As the residents age and fall ill, Darlington says the community helps share the burden. There is not a care manager at Oakcreek and residents still need to largely provide for themselves, but the community can fill in when needed. Darlington also makes sure she’s getting out of the house. The community hosts dinners and outings that each resident can opt in to any time, but Darlington says a lot of spontaneous social interaction occurs as well.

“We as Americans in particular have this myth that independence is the end all be all, but no one at any time of their life is really independent,” Darlington says. “We have to focus on interdependence instead.”

“I have learned so much about myself,” Darlington says of living at Oakcreek. “Living like this raises everyone to a higher level.”

When you think about it, we really are all co-living—no matter if you’re living in a luxury co-living community, a grassroots alone in a studio, with our partners and a roommate, or with our families. The market affects us and our individual choices play into them more than we’d like to admit. Maybe the solution to the housing crisis is to accept that, band together, and work towards grassroots solutions that raise everyone to a higher level. Just a thought.

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