Co-living spaces: How millennials, Gen Z create affordable rent situations in big cities

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Lightning Society Lofts in Bushwick, Brooklyn is a “collaborative living project” that sees 17 adults under one roof. Robert Deutsch, USA TODAY

After years of living alone and a six-month-long apartment hunt in New York City, 27-year-old Jade X found what she called the “holy grail” of living situations – roommates. 

For two years, the hotel manager had been renting a $1,200-a-month one-bedroom apartment in a residential section of the Bronx, where she says she didn’t have any friends, felt little sense of community and “there was literally nothing to do.”

“I didn’t feel safe, and it really didn’t fit my vibe,” the free-spirited fashion design enthusiast said. “I liked the price of the apartment, but then again, you get what you pay for.”

After a friend recommended that she look into one of the metro area’s many communal living companies, Jade, who legally changed her last name to X, did some digging and quickly applied. Two weeks later, she moved into her new shared apartment in Bushwick, Brooklyn, that is operated by Venn, a network of shared homes and spaces in the neighborhood. 

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“Everyone who moves around New York City has their horror stories; but for the first time in my life, this was not one of them,” Jade said about moving into the two-story duplex.  “After everything I’ve been through in New York, it was worth finding this in the end.”

With millennials carrying more student debt than ever before, earning less than their parents and dealing with unaffordable high rent prices in big cities, experts say “communal living” spaces in today’s sharing economy are both convenient and necessary.

Compared with traditional home buying or apartment renting, today’s cohabitation market is friendlier to lower credit scores, laxer with security deposits and offers greater flexibility than traditional leases with multiple roommates.

The lifestyle is often compared to adult dorms, with the communities formed intentionally for residential transplants. Hot spots span from L.A. to New York City, with budding hubs in metro areas nationwide.

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Jade’s apartment is run by Venn, an Israeli startup that leases and renovates properties before renting many of them as shared spaces. The 5-year-old company says it invests revenue back into the neighborhood by funding local businesses and programs to minimize displacement.

As a member of Venn, Jade and her roommates split the $3,900 rent among the three of them, however, some of the company’s residents are only responsible for their own room – a practice that’s common among cohabitation startups. Venn has more than 75 residents in NYC.

Utilities are included in the rent price along with access to local events, co-working spaces and yoga. 

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“I think that the idea is about creating a certain lifestyle where people live, and it’s more like a hotel with amenities than what you would think of as a traditional apartment complex,” said Dana Bull, an real estate agent with Sagan Harborside Sotheby’s International Realty who has experience working with millennial clients.

“The rent prices are staggering, and it’s one of the only ways people can live in an area they want to live.”

The trend of living with strangers isn’t a new concept at all.

In fact, 25% of all Americans have lived with someone they didn’t have a prior relationship with, according to a new Credit Karma survey, but what’s different is the significant expansion and investment in the burgeoning housing model. 

Expanding market 

Co-living company Common has 27 buildings in six markets in the U.S. and announced last month that it is expanding into Canada. Other companies like WeWork’s WeLive, Ollie, and Quarters are also expanding their communal living options. In the next few years, the number of co-living spaces in the U.S. is expected to triple, according to a 2019 report by real estate firm Cushman & Wakefield.

Urban co-habitats allow residents, often referred to as members, to share the living and kitchen areas of pre-furnished apartments. The living arrangement gives tenants access to amenities that would otherwise only be available at luxury properties, such as expansive rooftop decks with pools and open workspaces for people who work from home. 

And millennials and Generation Z are at the center. Forty-three percent of Gen Z say they’ve lived with roommates they didn’t know compared to 31% of Millennials, Credit Karma, a personal finance company, found. Seventeen percent of millennials said they were somewhat-to-very likely to move in with roommates they didn’t know in the future, compared to 30​% of Gen Z respondents. 

Where elder populations may find living with multiple strangers after a certain age strange, almost half of Gen Zers think four or more people could be reasonably housed in a two-bedroom apartment. 

“We see this generation getting more creative to live how or where they want to live,” said Dana Marineau, Brand VP of Credit Karma which has more than 85 million members in the United States and Canada, including almost half of all U.S. millennials.

“College students today use AirBnB as a verb, they say they are going to AirBnB that spare room. They really are willing to get creative, live with strangers and they think to themselves, ‘I want to live in this particular area, what are the things I’m willing to do in order to do that.’”

Solution to isolation

Real community is a key component of many co-housing models, with residents being encouraged to interact and work with one another. That was the main selling point for 27-year-old Carlos Gordian whose first-year-lease is soon ending on a bedroom he rents in downtown Miami. 

The modern 49-story communal living tower dubbed “X Miami” gave him an opportunity to “meet people and be part of something that’s new,” the engineer of a medical device company said. He had just moved to Miami from North Carolina and liked only being liable for his “unit” or bedroom under the semi-flexible lease.

“The policy is that you have up to two switches if you have a roommate you don’t like,” Gordian said. He was paired with two strangers he got along with. Now that he’s settled into the city, he plans on moving out of shared apartment situation in favor of lower rent elsewhere in Miami. Rents at X Miami range from about $1,400 to $1,900. 

The shared space philosophy is also being adopted by older adults.

“The average age of our household is 33 years old, and we intentionally have a diverse age and income range,” said Joseph Tandle who, along with his partner Timothy Phillips started a co-living community called Lightning Society Lofts. “We’re not looking for a feedback loop of young adults. These aren’t just college kids.” 

What began as a “community-oriented event space” in 2016 quickly evolved into a massive 12,000-square-feet apartment sliced into bedrooms and airy communal areas. The roommates range from ages 22 to 55, and the loft is shared by “members” who are civil rights attorneys, filmmakers and artists from varying professions. 

Friction points

After intentionally eliminating co-living pain points like privacy issues and chore schedules, Tandle says the community feels more like a family.

“We intentionally took away all of the friction points of living together,” Tandle said. Tasks like cleaning the toilet, cleaning the shower and floors are done by maids so people don’t have to fight over who doesn’t clean up after themselves.

For members who aren’t in the mood to talk or engage with roommates, they use the word dip” to let others in the space know, “nothing against you, but I’m just going from point A to point B,” Tandle said. Residents sign year-long leases.

Smaller rooms go for $1,200 a month, and larger rooms are $1,700. 

While these rents for a bedroom may seem extremely overpriced in most parts of the country, in Los Angeles the average one-bedroom apartment costs around $1,400 a month, and in NYC one bedrooms easily double that.

“We just recommend never living beyond your means,” Marineau of Credit Karma said. “So, if you want to live in an expensive area or you put more of your income toward rent than perhaps you should, we just want to make you’re making good choices in other areas of your life. ­”

Follow Dalvin Brown on Twitter: @Dalvin_Brown. 

Read or Share this story: https://www.usatoday.com/story/money/2019/07/26/gen-z-co-living-blurs-line-between-residential-and-hotel-living/1812863001/

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