5 Reasons Why Co-Living Could be the Next Big Trend
“Great environments don’t happen because architects create them, but because cultures create them”Charles Durrett
It is said that humans are social animals. We crave relationships and the company of others. This is why we create communities. It has been the norm since the days of our earliest ancestors. Living together and sharing resources. The co-living trend, similarly, is not a new concept and it builds upon the idea that humans need to interact and live in groups. Today, it helps us address the issue of scarce and rapidly dwindling resources.
The earliest coliving communities can be traced back to the mid-twentieth century in Denmark. Back then, it had a different objective but now growing populations have brought in the idea of cohousing as a sustainable alternative to the traditional residence. It has caught up so rapidly that even mainstream developers are acknowledging the co-living trend. This is evident in the fact that many new projects now feature co-housing spaces too.
The target audience for cohousing is shifting too. When the notion first started to take shape, it was targeted at the young and inspiring lot. The new trend, which according to a recent Forbes article has been referred to as ‘co-living 2.0’ is reaching out to older individuals. The experiences and being part of a collective living space are the main selling points.
The reasons behind the growth of coliving are varied. It depends on different segments of the target market and why they prefer to reside in a shared home. Coliving was initially directed at the youth only but recent statistics have shown that the older population is showing attraction towards the concept too. Here we discuss some of the factors that will contribute towards the sustainability of coliving in the future.
What is Co-living?
The term co-living is fairly recent but the concept is not. Co-living is used to define a system of living where residents share a space. However, the underlying idea for these people is to be able to support each other and allow them to grow through shared experiences, interests and values. A co-living community is built in a way that people use the same kitchen, seating area and a number of other facilities that are otherwise available separately for residents.
Shared housing is different from traditional renting in a number of ways. Firstly, it is more affordable because unlike paying for one complete apartment, people pay for a space where a lot of amenities are split between others. In a rental agreement, all that you get is the apartment and nothing else but coliving rates include facilities like Wi-Fi, utilities, furniture and other necessities for day to day use. Co-living agreements are also relatively more flexible than normal lease contracts.
How Much has Coliving Grown Over the Years?
The co-living trend has shown mushroom growth over the last few years and especially in 2018. Of the co-living spaces available today in the US, which are considered investment worthy by stakeholders, 55% were developed in 2018 alone. In the next two years, the coliving units operational in the country are expected to grow by another 84%. This is staggering growth which is encouraging mainstream and conventional developers to jump on the bandwagon too.
The figures show similar growth in populated city centers across the globe. In places like China, Hong Kong and London, coliving spaces are blossoming rapidly. The Collective, a network of spaces which began in the UK has grown to three locations in the United States and is looking to open more branches in Germany as well as other parts of Europe, and all this in the span of just ten years.
As the years progress, the trend is expected to hold strong due to underlying factors like increasing population and rising costs.
Why the Trend is Here to Stay
Industry experts are reading the way co-living market and its consumers are behaving. There are a number of positive indicators that show shared housing will continue to change the real estate sector for many years in the future. It’s not just because of affordability but the actual underlying idea of enhancing the experience of living as a community.
It’s the sense of togetherness that is bringing people from different age groups and walks of life to co-living spaces springing up around the globe. Let’s take a look at the top 5 reasons behind the growth of this co-living trend.
1. The Affordability Factor Trumps All Else
A co-living space may offer less room but they are usually designed to cater to individuals. However, they still cost less than what a normal rental would cost. Although exact savings differ depending on the area where the cohousing space is located, users are able to save hundreds of dollars on average living in shared working spaces. The collective amount that these people have to pay is lower than the rent of home which would be bigger but harder to maintain.
The Collective, the fast-growing UK-based coliving company, states that their charges are £850 with certain discounts or otherwise they start at £1100. This is all bills and utilities included. Also, in this price users get access to a gym, library, cinema and games room. In comparison, a one-bedroom flat in Willesdan can cost £1200 with no amenities or utility bills included. The only difference is that the floor space for these flats is more than 60 square meters but in a Collective coliving space you only get 10 m2.
This is a compromise cohousing users say they can live with.
2. Social and Economic Factors
Economic factors continue to make it difficult for an increasing segment of the population to afford houses. The prices of real estate surpass wage rates by a considerable margin. This trend will remain the same as the population continues to grow but the resources available to them don’t. Industrialization and urbanization around the world is also driving people towards cities putting extra strain on the already burdened housing and work markets.
Moreover, students are burdened with debt which makes them take longer to get married and start families. This means that buying a home is a priority which comes way down the list. Another factor here is the need for people to socialize. In a world of technology, people are increasingly becoming isolated either because of work or other commitments. This is why they yearn for experiences that co-living provides to them.
3. Fulfills a lot of Experiential Needs that Traditional Housing Doesn’t
Leading on from the social needs being discussed in the previous section, it is important to emphasize that co-living provides an avenue for people to experience things that they otherwise wouldn’t. Digital nomads and other people who’ve shared accommodation with a group of people always talk about the sense of inclusion, bonding and that feeling of being part of a family. All these factors contribute towards an urge for them to go back with some people even staying for months on end.
4. Value for Money
We touched on this aspect when talking about affordability but it is something that requires a more elaborate explanation. It is easy to perform a cost comparison between renting and coliving but it is difficult to factor other intangible elements. Living in a coliving space means that you pay the monthly rent and then you get access to internet, running water, electricity and other amenities which are never provided in an ordinary house.
There are no long term maintenance concerns because those are taken care of by the owners of the space. On the contrary, when renting, you pay a monthly charge and still remain responsible for everything else. You buy furniture, pay bills and then maintain the house you’re living in too. All in all then, at the end of the day, a coliving space is better value for money. This is another variable that is contributing to its success.
5. Erasing the Boundaries Between Work and Life
Last but not least is the added benefit of coworking. These two concepts go hand in hand because shared living spaces are mostly used by independent workers or startup owners. For them, it is like being able to work from the freedom of their home without the loneliness. Added benefits include access to specialized training, networking, ability to hone new skills and even pilot test new ideas that they may have for the future. And this is just the tip of the iceberg.
Is Co-living Really Going to Happen?
If the decision has to be made keeping all the evident factors and their results in mind, then the answer is simply, yes. Co-living is a market which is showing significant growth with all factors supporting the notion that this is going to be a sustainable trend. As conventional real estate is also accepting shared living spaces, there seems to be no conflict and the growth trajectory looks set to make investors as well as other stakeholders in the market very happy.