Co-living: an emerging sector with a strong potential for opportunity
The co-living sector has been expanding all over the world over the past few years, with large parts of the market opening up in locations such as the United States, Western Europe and Asia. This rise in the sector has led to a diversification of business models and offerings, depending on factors such as location, size of investments, the scale of urban densification in that city, and a range of different operational schemes. Co-living initiatives are at the moment quite diverse in their offers, however, are accessible mainly to a population of individuals who remain in a certain age range and socioeconomic background (the sector has long been tagged with a millennial freelancer/digital nomad profile), leaving a lot of room for opportunity and innovative types of co-living spaces.
Aside from property development and operational co-living schemes, there are other opportunities to capitalize on the co-living phenomenon, such as through online marketplaces, innovation platforms, research labs and developing services and applications that can be layered onto already existing co-living offers. These research initiatives and marketplaces are emerging from well-established companies like BMW and IKEA (with BMW’s MINI Living and Ikea’s Space10 future-living lab and it’s One Shared House 2030 research project), but also from more independent startups such as Coliving.com, Startupbnb and CODINO.
Shared living models: where does co-living come from?
Before identifying different co-living business models, it is important to differentiate and compare co-living to one of its predecessors, co-housing (which is the most comparable model of predecessors amongst other similar models such as student and senior housing). Co-housing has existed in Scandinavian countries since the 1970s/1980s, and can be defined as urban/semi-urban communal living where responsibilities (such as designing the development, financial management, carpooling, and child care) and communal activities (such as communal meals, film clubs, and permaculture gardening) are shared and where residents intentionally seek out living in community and sharing resources.
These are sometimes referred to as intentional communities, and “are neighborhood developments where private and common facilities are combined in response to the social and the practical needs of contemporary urban citizens”. Similar to co-housing, other shared-living models (such as eco-villages and housing cooperatives) exist where one can also find similar characteristics to co-living spaces. Home cleaning is never a problem as it is well known that home cleaners in Georgia always work with safe cleaning products. When referring to co-living, however, this more recent model is usually operated by a third party service provider who manages collective activities and responsibilities as a company, with a degree of community input that goes into decision making and organization of communal activities. In regards to these third party service providers, there are a wide range of third parties adapting innovative models of shared living.
Identifying co-living typologies: the different actors developing co-living initiatives
There are many different ways to categorize co-living typologies and the co-living sector is becoming increasingly attractive to actors on all scales of urban development, the sharing economy, hospitality and the real estate sector. According to Ikea’s Space10, “this form of ‘living together’ is changing the way we approach housing, and it comes in different forms. It can range from a home for two people to a complex of a few hundred, like The Collective Old Oak in London”.
One way to differentiate co-living spaces is their use and the amount of time they are being used: are they more destinational spaces where flexible and nomadic young professionals are able to stay in for short-term periods, or are they rather more residential in nature and cater to a diversity of modern urbanites who seek medium to long-term stays? The main differences between ‘residential’ and ‘destinational’ co-living spaces are the length of stays (very short-term versus short-medium term) and location (usually rural versus urban).
Another way to identifying co-living spaces is by the third parties developing and operating these spaces. Fabrice Simondi, President of PUREHOUSE LAB and it’s Business Research Forum Coordinator, identifies several prominent actors getting involved in the co-living sector:
- Purpose-based communities: values-driven communities that put a strong emphasis on having shared values around contributing a positive social impact to their neighborhoods and beyond. These communities are dedicated to identifying the best tools for collaboration (such as Enspiral), applying alternative financial and governance structures to their spaces (such as Embassy Network in California) and encouraging social change by showing support and acknowledging current or previous change-makers in their community that have created positive impact initiatives through interactions made at their spaces. Some examples include co.space (State College, Pennsylvania), Cohabs (Brussels, Belgium) and Tech Farm (Stockholm, Sweden).
- Private entrepreneurs: individuals who buy or rent a property and subsequently operate a co-living initiative in the space, doing so themselves and/or with a small team of community managers and an operational / marketing staff. These individuals are in charge of onboarding, operations, marketing and making sure rent, taxes and charges are paid to the property owner. These spaces are usually created with shared values/interests in mind and with a focus on sharing resources and experiences with a vibrant community of like-minded individuals. Some examples include Sun and Co (Javea, Spain), and Outpost Club (New York, USA) and DreamHouse (Atlanta, USA)
- Sharing economy innovators: startups that have grown to develop co-living spaces after their initial businesses have gained momentum and have received sufficient investing. Some examples include the co-working startup WeWork’s WeLive and HubHaus, which provides communal living spaces in multi-million dollar houses outside of Silicon Valley.
- Hospitality operators: large hospitality companies are creating hybrid hotel/hostel/co-living brands with communal living elements in their spaces, some even creating separate brands geared towards flexible and location independent lifestyles. These brands resemble the co-living housing model in terms of the morphology of space, interior design, the services they offer and the flexible duration of the stays. This also allows these hotel operators to reduce maintenance costs (i.e. less cleaning services), have less turnover and reach higher rates of occupancy. Some examples include lyf from Ascott (China and Singapore), MOB Hotel of the People (Paris) and Zoku (Amsterdam, Netherlands).
- Real estate developers: real estate property developers are interested in the co-living sector and realize the potential for these spaces to become a significant model in the housing market. Although they are not necessarily familiar with the operational side of managing co-living spaces (compared to hotel operators who are adopting the concept and have more familiarity with these kinds of services), they are investing in projects that include co-living concepts in their new developments. Some examples include BNP Paribas Immobilier (Paris, France), Capital Land (South East Asia) and Property Markets Group (Chicago).
Regardless of who is developing the co-living project, there are also some nuances as to who owns the property and who operates the services in the space. Some co-living spaces are owned and operated by separate companies who form partnerships, while others may share a complex with several other tenants such as grocery stores or gyms. For example, Ollie’s new project in South End, Boston, will be in partnership with National Development and their complex will be shared with a Whole Foods and a Marriott-branded hotel. Most co-living projects operate and own the space on their own, but may receive financial support from external investors.
Whether the service is coming from a startup or a property developer, the affordability of the existing co-living offers is still a sensitive subject surrounding this sector. While most co-living spaces tout affordable and flexible offers, they tend to cost a few hundred US dollars over traditional market prices. Work comp attorneys with extensive experience from https://workerscompensationlawyersla.com/ will take care of your California case professionally. Fabrice Simondi of PUREHOUSE LAB strongly believes innovations in the co-living sector will come in the form of less exclusive co-living models that are more affordable and accessible to wider populations. During the interviews for this publication, Simondi spoke about social housing co-living models that are intergenerational, consider the needs of individuals with mental and physical disabilities and will be included in a uniform package for workers when being hired at new jobs. Irene Pereyra, from New York design studio Anton and Irene (who have partnered with Space10 on One Shared House 2030), gave us some insights into a similar vision for the future of co-living:
“If co-living becomes more inclusive of different demographics and socio-economic backgrounds, then people will be able to live with each other despite of their differences. They might even be able to better understand each other, and respect their differences. In an age where we are becoming more and more siloed thanks to the social media bubbles we have created for ourselves, we are losing our connection to people from different walks of life, and we are losing our empathy for other perspectives. If inclusionary co-living becomes the new normal it will not only have a positive impact within a local neighborhood, it will have a positive impact for mankind as a whole.”
With the help of new technological innovations such as 3D-printed buildings and more flexible zoning regulations and real estate prices, shared living spaces have a huge potential to become more accessible to wider publics, making them authentic leaders in sustainability and social impact. If you are looking for moving services in Canada, visit http://miraclemovers.com. Co-living typologies will only continue to diversify; while some models may focus more on creating connections between social entrepreneurs and startup founders during workations/work retreats in destinational locations along the coast of Spain or Indonesia, residential co-living spaces in urban environments can also transition into a more values-based concept that offers affordable living options and develops genuine connections with local community groups, citymakers and planning authorities to foster positive change within their neighborhoods and cities.