Could co-living be the next big thing for apartment owners?
We take a look at co-living, the appeal and why it's a viable solution for renters.
Posted: February 17, 2021 by Anna Jotham
Tight housing inventory. New construction that can't keep pace. Millennials buckling under student loan debt. And wage growth at a snail's pace. As the largest generation in the history of the U.S. still struggles to find a home of their own for myriad reasons, a new spin on communal living is taking hold: it's called co-living.
Co-living has been gaining popularity in recent years, particularly in big cities, where housing is at a premium, and millennials are eager to take up residence. But the idea is catching on in other areas, and apartment owners are looking at it closely to see if it might be the next big thing.
What is co-living?
Co-living offers residents the ability to move into a shared space with their own private bedroom, often without the annoying hassles that come with trying to find and keep a roommate. Some co-living companies aim to remove the barriers to sharing an apartment, providing entirely furnished common areas, connecting roommates with shared interests, collecting rent from individuals (rather than a single lease signee having to collect from roommates), offering cleaning services for shared areas, even stocking commonly-needed supplies, like toilet paper. The solution has found a niche among millennials in particular, who are well-practiced in the sharing economy concept and are ready to move out of their parents' home but not ready to purchase a home of their own yet — whether due to lack of down payment, inability to secure a loan or just reticence to leap. Moreover, the generation desires to stay connected and social while still remaining flexible and co-living delivers.
Looking at the future of co-living
During a pandemic and a slowed economy, it can be hard to gauge where co-living trends will go. In the short term, co-living assets have taken a hit, as has much of the housing sector. Economic challenges such as job losses that have certainly impacted the millennial generation could further stall efforts to purchase their first homes, while the desire to move out on their own will surely remain. The financial freedom that comes with renting will allow this generation to continue to lead experiential lives, whether in the urban centers or smaller cities. Location, as well as amenities like fast and reliable internet and roomy common areas, will be key draws for those exploring co-living as their next housing solution.
If the next chapter of apartment ownership features a co-living model, it's clear the responsibilities of management will have to evolve to leverage this newish approach effectively. Done well, co-living spaces could attract a desirable demographic for occupancy. In the end, co-living appears to provide a solid answer to the needs and preferences of the next generation, conveniently and comfortably bridging the gap between living with their parents and becoming a homeowner.