We are witnessing a fundamental shift in the way people are choosing to live. With stagnated wage growth and the millennial generation being the first to earn less than their parents’ generation, young adults are delaying marriage and having children and forgoing homeownership. For the first time, the percentage of 18-35 year olds living with their parents has surpassed those owning their own home.
The result is that more people are living with roommates for longer and later into their lives. These socio-economic trends have produced a unique opportunity in the multifamily market to deliver a new and better shared housing product. Common’s unique approach to coliving is directly addressing this underserved market through convenience and design. I’m thrilled to participate in this year’s MIPIM PropTech Summit in October to talk about it.
History of Coliving
Of course, living with roommates isn’t a new concept. Communal living has existed for centuries but has been on the rise in urban areas around the US in recent years. In the late 19th and early 20th centuries, residential hotels were a critical part of the urban housing supply. Middle-class Americans and families lived in hotels with spacious private units and shared dining facilities. In many ways, the coliving trend is the renaissance of the residential hotel. People choose coliving out of economic necessity as well as the togetherness and community that living with people can provide.
But the user experience – the act of finding a roommate and then living together – has always been awful. Today, you have to scour the Internet or Craigslist or ask friends of friends if they know of openings, only to find rooms that are too expensive or poorly maintained or riddled with administrative costs. And after finding a place, you have to spend money furnishing it and navigate roommate dynamics of how to split the rent, utilities, who’s going to clean the kitchen or buy the next pack of toilet paper. Living with roommates has been a reality for nearly all of us but the experience hasn’t been improved upon until now.
Demand for Shared Housing
One-third of all households 22-35 live with roommates, yet traditional real estate doesn’t cater to the demands of today’s growing market of young, mobile renters. Much of this population earn between $40,000 and $80,000 per year, which in many American cities leaves them without decent, affordable housing options.
Common is changing that, disrupting the rental market by working with developers to design and operate buildings specifically for how most people live today: with roommates. This is an enormous segment of the housing market (about 750,000 households in NYC are shared by non-related folks) that has been ignored by the industry — that’s why we receive more than 1,000 applications for Common membership every week.
In addition to renters, forward-thinking real estate companies are seeing the value in coliving. In June of 2016, Common raised a $16 million Series B round with significant investment from the real estate community. Led by 8VC, participants included Circle Ventures, the technology arm of the Milstein Family, LeFrak, Solon Mack Capital, and others.
Reinventing the Roommate Experience
Common has taken the way people are already living – with roommates – and made the experience safer, more convenient, and a whole lot more enjoyable. We’re merging technology, design and real estate to create a much better user-experience to provide a unique housing option for today’s mobile renters who seek a higher-quality living experience with the benefits of flexibility and convenience.
Membership at Common is all-inclusive. For one fee, your rent, furniture, utilities, and amenities like member-led events, weekly cleanings and shared kitchen and bathroom supplies are included. A seamless, tech-enabled experience makes life easier, handling everything from billing to repairs, and weekly cleanings keep suites tidy, so you never have to argue with your roommates about who’s going to clean the kitchen. And if a member in New York gets a great job in Chicago, they can seamlessly move to a Common home in that city without the hassle of breaking a lease and scrambling to find a subletter.
Working with Developers & Property Owners
Common partners with real estate owners and developers throughout the US to create community-minded homes that are affordable for the individual while also delivering above-market returns to our real estate partners. As a property management company, we’re addressing the fundamental supply and demand issues that underlie housing shortages in major cities today.
The response to opening our first home in Brooklyn in 2015 was so strong that we were able to rapidly expand in New York and into San Francisco, Washington D.C., and recently announced homes in Oakland, Chicago, and New Orleans. More than 70% of Common members are on 12-month leases, and most people stay longer than a year because they want to stay in the Common community.
With coliving, we are driving innovation in the multifamily market for the benefit of renters and property owners. It’s more than a millennial trend — it’s how more and more people will continue to live in the future. To learn more, visit common.com or join my coliving roundtable at the MIPIM PropTech Summit on October 11th.
Top photo © sturti/GettyImages