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Finance: The trendy co-living spaces attracting millennials in New York and San Francisco are just the latest version of a concept that's been around for 200 years

Finance: The trendy co-living spaces attracting millennials in New York and San Francisco are just the latest version of a concept that's been around for 200 years



starcity coliving housing

As millennials look to cut back on costs, the number of renters living with roommates has been climbing, according to a recent article by The Atlantic. But today's co-living spaces are nothing new — they're just a modern-day version of yesterday's boarding house.

  • The number of renters living with roommates has been climbing, according to a recent article by The Atlantic.
  • Millennials are looking to cut back on costs in a period of increasing rents.
  • But cohabitation is nothing new — immigrants and workers sought out boarding houses during the 19th century.
  • Today's co-living spaces are just a modern-day version of yesterday's boarding house.

Millennial renters are doubling up — and it's not always out of desire.

A recent article by The Atlantic highlighted the rise of adults living with roommates: from 2005 to 2015, the number of Americans aged 18 to 34 with roommates increased by 23%, according to the US Census Bureau, and around 32% of American adults cohabited in 2017, according to the Pew Research Center. This doesn't count those living with a romantic partner, but does include those who live with their parents.

Atlantic writer Allie Volpe cited a number of reasons behind the trend that seems to have sprung out of necessity, thanks in part to the Great Recession: Higher housing costs, the burden of student loan debt, and delays in marriage.

Living with a roommate is a way to cut costs in trying times. While millennials have benefited from a 67% rise in wages since 1970, according to a Student Loan Hero report, this increase hasn't kept up with inflating living costs.

While cohabitation is a departure from the 20- and 30-somethings who lived with their significant other in the past, it's nothing new.

Here's Volpe:

"The United States has seen this phenomenon before. As people moved to cities seeking work in the 19th century, boarding houses became hubs where diverse residents—immigrants, single men and women, workers of all kinds—could live affordably and mingle with others in shared spaces.

"Now, as housing becomes increasingly scarce and rents continue to rise (cities like Orlando, Salt Lake City, and Knoxville are experiencing the fastest rent growth in the country), the boarding-house experience is back, just at a smaller scale."

The rise of co-living spaces

Renters are looking beyond the standard two- to three-bedroom apartment; communal living, or "co-living," spaces have been sprouting up in major cities, like New York and San Francisco — and they're just a modern-day version of yesterday's boarding house.

"The market for communal living, or 'co-living,' spaces is quickly crowding," wrote Business Insider's Melia Robinson. "Companies like Open Door, HubHaus, and WeLive, a subsidiary of co-working giant WeWork, are competing for millennials' dollars as young people continue moving to high-priced urban areas."

Common is a shared-housing startup that offers furnished apartments in San Francisco and New York, plus Chicago and Washington, DC. Roomrs owns about 100 co-living units in New York City. In Oakland, California, 13 residents live in a "hacker house," provided by group-living startup Open Door.

And in San Francisco, middle-class workers earning less than $90,000 a year are moving into dorms provided by coliving startup Scarcity as a way to deal with an affordable housing shortage.

The high demand for these places is only indicative of the number of millennials looking for roommates as a way to save money on housing costs. Common receives 300 applications for rooms in its buildings a week, Business Insider previously reported, and Scarcity had a wait list of more than 8,000 people in early 2018.

But more affordable living isn't the only advantage of co-living spaces. Tech CEO Arram Sabeti shares a house in San Francisco with nine roommates, called The Archive, and he previously told Business Insider that creating this communal living space has cured his loneliness — and that it was one of the best decisions he ever made.

"Our whole house is a very, very ambitious group of people. We think of ourselves as both friends and allies over the long term and hopefully, for the rest of our lives," he said.

This may be why, in some co-living spaces, residents pay a premium for having so many roommates or for extra services.

"Homeownership as a life goal has dramatically shifted, and it's not limited to millennials. I think it's across society. If anything, the housing crisis sort of disavowed the fantasy that homeownership meant security," Matt Mazzeo, an investor in Common, previously told Business Insider. "People just care about belonging."

Click here to read the full text by Hillary Hoffower

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