Is co-living an answer to the affordable housing crisis?

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. Author: Peter Oosterveer, Chief Executive Officer, Arcadis

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Co-living has become a popular topic in housing development circles as the building industry contemplates new residential delivery models. This March at the international property industry event MIPIM in Cannes, discussions on co-living in France were being held, some in the mainstream program and others privately at various industry lunches and dinners. Most agree it’s a housing concept that is getting increased airtime and gaining traction.

I have engaged with a number of commercial developers in discussions around affordable housing, the advent of co-working and the preferences of the millennial generation, which include co-living. Interestingly, most commercial developers recognize the changing interests of millennials, with co-working advancing to become a well-accepted commercial development model. Co-living, meanwhile, also appears to be making some inroads, particularly in delivering student housing and in highly densified cities. Co-living serves as a modern form of housing, whereby residents share values, interests, aspirations and living spaces. It establishes a balance in which members feel there is no compromise between space, privacy, location, productivity and fulfilment. Outside these niche residential markets, it appears that co-living new build is still evolving and is not yet an accepted mainstream housing delivery model – but that could be changing.

In March, we launched a startup incubator in Amsterdam with Techstars, and one of the 10 startups currently under development is founded on the premise of applying digital technology to facilitate co-living. The startup is called Kndrd, and instead of addressing the new build audience, it focuses on property owners and building portfolio managers who may want to adapt their existing properties to accommodate the growing short-stay housing needs of business travellers. It’s a fascinating outfit that has developed its own co-living management software, and sees itself as a digital platform that offers “housing as a service”.

Christine McDannell, co-founder and CEO of Kndrd and author of The Coliving Code, is quite bullish on the trend, and writes, “Co-living is absolutely the leading answer to our global urban housing crisis. Not only does it solve the cost and spatial demands associated with housing, but it also addresses the intimate aspects of human connection that have been lost. Loneliness rates have doubled in the past 10 years, and rent costs have gone up much more than that. It’s very rare that a single solution can solve a complex multi-pronged issue like housing, but co-living truly does. We’ve built the technology platform to unite people globally by linking them to homes with complete efficiency in this otherwise fragmented industry […] It’s time that housing became as automated, flexible and on-demand as Uber – what I like to call ‘housing as a service’.”

As summarized in the graphic above, Kndrd recently produced a report about the current state of the co-living industry, based on a 62-question customer survey and with more than 10 countries represented. The top findings are that the average minimum stay is 58 days; co-living facilities have functioning websites but are not fully satisfied with them; while on average, these facilities have been in business for 1.8 years. A surprise takeaway from the surveyed group identified an unmet need for tech solutions such as shared digital platforms and the need for better facility promotion.

According to McDannell’s book, The Coliving Code: “There are so many benefits to shared living space that it’s amazing that it hasn’t been done at scale before. Of course, technology has helped us in this respect. Advances in the way we communicate and how we organize our lives have helped the co-living initiative take hold. There are so many ways you can take advantage of the current and future tech to make life easier. Co-living is an important one of these that deserves to be explored in more detail.”

Stepping back from the digital age, I recall that New York City, during its period of rapid population growth and vertical urbanization, utilized an affordable housing model called “single-room occupancy” (SRO). The SRO residential model was built around shared living for cooking, bathing and other common areas, with smaller private sleeping quarters for its residents. SROs could be rented for short-term stays, and many evolved into a long-term housing alternative. If this can work in NYC, one of the most densely populated cities in the world, it might be worth considering.

Other global cities, like London, are also looking at different housing models that will appeal to millennials as they enter the housing market. Whatever happens, the question of how we address the working and living needs of all citizens in a city’s future deserves increased consideration and digital enablement.