Cohabitation has been a part of the student life since, well, forever. Dorms and university halls are basically the most economical way to house a large number of students. Inadvertently, this style of living also produced a conducive environment to exchange information and ideas.
In fact, some of the greatest inventions and business concepts that people have come up with were thought up in humble student lodgings. Students are brimming with ideas, ready to put new concepts to test and are hungry for like-minded people to share their ideas with. Companies like Facebook and Napster flourished precisely because students wanted to share information with each other and then created platforms to do it.
A mix of luxury student accommodation & dorm lifestyle?
Over time as international student mobility reshaped the student accommodation market student numbers increased considerably and there just wasn’t (and still isn’t) enough purpose-built housing to accommodate the influx. Property developers picked up on this and started constructing and converting buildings on and off campus to keep up with the growing demand.
Most student accommodation was based on an apartment style layout which is ideal for singles or young families but not necessarily conducive for larger groups to interact and share ideas. Traditionally styled apartments don’t really offer much in terms of a communal space for tenants of the building to interact. Luxurious student housing, on the other hand, focuses on building communal spaces. However, tenants in such apartments are still housed in isolated units.
Inspired by the idea of more communal living, some student housing, and multifamily developers are looking at building spaces that mix students with other occupiers. The trend is called Co-Living and it’s been picking up steam in the last few years.
The concept has been around since the 1960’s but has only become a worthwhile investment opportunity for property developers in the last few years. The biggest benefit of this model is that it broadens the market while also increasing profitability by offering a wider range of services and amenities to the tenants.
Communal living – but at a premium price
Co-living is a form of accommodation that encourages a communal style of living by housing a number of people who share common living spaces. The idea is to foster a sense of community by creating an environment where people from different types of backgrounds get to interact with each other. The kitchen and lounge areas become a communal space where all these different types of people can exchange ideas, discuss music and art or just hangout and watch movies. The cost of utilities is normally built into the rental price so there’s only one bill.
One may assume that rent costs would be considerably lower since it’s being shared with a number of people in the house; however, that’s definitely not the case. In fact, most times the rent will be the same if not higher than renting a single bedroom apartment or studio. It seems many young people are willing to pay extra to live with more people to stave off their sense of isolation.
They live in virtual worlds and have tons of friends on Facebook and Instagram but are lacking real-life interactions. In places like New York, they travel to work on the subway and wear earphones and don’t talk to anyone. After work, many go straight home and continue this routine in one of the busiest cities on the planet but end up being lonelier than most. By adopting elements of a communal lifestyle they are able to regain the social element even if it’s just sharing breakfast with other like-minded individuals.
Noteworthy developments and ideas for industry leaders
Co-living is often referred to as ‘dorms for grown ups’ but companies like Common, The Collective and WeLive feel that it’s much more than that. Brad Hargreaves, Founder & Chief Executive Officer of Common says “The biggest misunderstanding of co-living is people think it’s this totally new crazy and radical thing. It’s not. People have been living with roommates for a really long time. That’s how so many people in cities live. Really what we are doing is just taking this way of living and making it better, designing an experience for what people are already doing.”
Brad Hargreaves may have been on to something because it seems the co-living trend is no longer limited to just start ups or boutique developers anymore. Premier real estate investment firm Property Markets Group (PMG) is now getting in on the action with plans to build 3,500 units over the next five years which will focus on small private spaces and more common areas to encourage greater communal interaction.
Co-working company WeWork has now branched into the co-living sector with their subsidiary WeLive. They did have grand plans expand in 2017 however, after deliberation it seems they have scaled back their original plans. Nonetheless they and many other developers still see great potential in this growing trend and are looking to capitalise.
What’s your take on this?
As the co-living concept is still in its early stages it’s difficult to assume whether it will grow into something much larger or simply remain a niche model. However, it does present a new type of opportunity for property developers and it’s definitely something to keep an eye on. Where do you see it going? Let us know what you think on LinkedIn or Twitter.