Co-living apartments offer a sense of community for on-the-go millennials
Investors seek to upend the rental market, starting in the world's largest and priciest cities
Khatija Ali did not plan on becoming an urban housing pioneer.
The 28-year-old Toronto native graduated with a medical degree from the University of Windsor in April 2018. A few months later, she moved to New York City to launch her biotech startup and needed a place to live.
She was struck by the first place she saw: a two-bedroom, tastefully furnished apartment with exposed brick and expensive appliances in a townhouse located in the rapidly gentrifying Brooklyn neighbourhood of Bushwick.
"We actually fell in love with it. It was the first apartment we saw and we basically just moved in," Ali told The Sunday Edition.
While the unit was enough to convince Ali this was the place she wanted to live, she soon discovered this was no ordinary apartment building.
The building was owned and managed by a company called Node, one of about a dozen companies that, over the past few years, have collectively raised hundreds of millions of dollars in an effort to upend the rental market in our largest and priciest cities with an approach called co-living.
There are many variations of co-living, but it's best to think of a typical co-living building as a combination of apartment, college dorm, hotel and high-end rooming house — like a 1970s commune without the communitarian ideology.
Co-founded by Canadian entrepreneur Anil Khera, Node currently owns buildings in New York, Dublin, London and Los Angeles.
They've also purchased a building in the Ontario tech hub of Kitchener-Waterloo, with plans to open their first Canadian co-living building by the end of next year, before expanding across the country.
Know your neighbours
Ali's building in Bushwick has eight units, with 14 people currently living here.
"There's some people who live upstairs who are hairdressers. And then we're here. And then we have someone who's an artist. And the couple next door — they travel a lot," said Ali. "So it's a lot of different people, with a lot of different backgrounds, and that's really appealing in itself."
Other co-living buildings are much larger, housing hundreds of people. But what they all have in common is density.
Most co-living apartments are small, even by New York standards. Some are only a few hundred square feet and have shared bathrooms and kitchens. By squeezing more rental units into their buildings, these companies hope to make them more affordable for people who might otherwise be priced out of desirable neighbourhoods like Bushwick.
That hasn't really happened yet — at least not in Brooklyn. Ali's two bedroom rents for $2,800 US a month, which is similar to what a traditional apartment would cost in Bushwick. But when all the extras are factored in, co-living can become a more attractive proposition.
In exchange for less private space, co-living buildings offer generous common spaces, like lounges, gyms and hot tubs, as well as hotel-style amenities, including free Wi-Fi, utilities and housekeeping.
Co-living companies also often hire a representative — known as a "community curator" in the case of Node — who act as a sort of concierge, helping to manage the building, deal with residents' problems and organize community-building activities, from music nights to local bar tours.
The current target market for co-living is millennials — generally defined as people born between 1981 and 1996 — who are increasingly finding themselves shut out of the rental market in the major global cities where so many want to work and live.
Thanks to social media, they're connected to more people than any previous generation, but they're also feeling lonelier and more isolated. The promise that virtual communities can be as meaningful as genuine communities is starting to fade, according to Eric Klinenberg, a sociologist at New York University.
"Many people now recognize that being on the screen all the time is unsatisfying," he said. "And many of us really hunger for connections where we live. And that can be the neighbourhood, that can be the block — but it could also be the very building you spend time."
Khera currently divides his time between London, where Node is based, and Toronto, where he grew up. He said his previous experience working at a private equity real estate investment firm propelled him to find new models for building community through the housing market.
"I understood the broken nature of the housing market from a professional standpoint, but also from a human standpoint," said Khera.
"We're building cities with fractured relationships between residents living all on top of each other. We really haven't addressed housing and the right way for actually thinking about what's good for society. And so all co-living operators believe that there's a better way to connect to people and have community."
For people like Ali, new to the city and busy running her business, these efforts to build a community among her fellow millennial co-livers was as appealing as the appliances and exposed brick.
"I didn't know anyone here in New York and it was really nice to come into a community that you could connect with people who are on the same level," she said. "New York is built for a certain type of fast-paced individual, anybody with an entrepreneurial type of spirit, anybody that wants to be their own person — and I think I fit right in."
Co-living for families and seniors?
The appeal of co-living for young professionals is pretty clear. Selling the idea to investors has been a harder slog. Executives at one co-living company, Ollie, approached 400 New York building owners before one agreed to allow them to convert a conventional apartment building into co-living units.
But that reluctance has now largely dissipated. Money is pouring in and plans are underway to move co-living beyond its millennial roots.
Earlier this year, Common, a large co-living company, announced a partnership with one of New York's biggest developers to form a new venture called Kin. The plan is to create co-living spaces designed to meet the needs of young families. There will be small, self-contained apartments and lots of shared spaces, including playrooms, places to park strollers and other community areas for children and their caregivers.
Co-living is also a model that could one day appeal to Gen-Xers and baby boomers, and, according to Khera, that's already starting to happen.
"We get quite a few of our residents' parents saying, 'Where's my Node?'" he said.
Written and produced by Ira Basen