Forget the Renting Economy: Meet Co-Living

Have we really become that much more busy than our ancestors? JL

Diana Ransom reports in Inc:

Operating within the sharing economy ideal of unloading your chores and transportation to startups like TaskRabbit and Uber, co-living startups suggest that your living arrangements may also be too cumbersome.
In Brad Hargreaves's perfect world, people wouldn't just say hello to their neighbors. They'd sign for their packages, get together for potluck dinners, share cleaning supplies and maybe even babysit each other's kids. And if you needed to move for your job, you'd have a similarly-equipped residence just waiting for you in the new location, too.
"Being able to live anywhere, rather than being bound by yearlong leases in individual cities and individual buildings, really reflects how people are living and working today," says Hargreaves, who is the founder of Common, a New York City real-estate operating company that provides and maintains co-living spaces. "We're not committing to one career for all 40 years of our working lives. We're switching between jobs, between gigs, between traditional and nontraditional education, between startups. And we want to build a type of housing that enables that."

But before this utopian vision becomes fully realized, Hargreaves has set his sights on unattached New Yorkers. In his first stab at bringing communal living -- or "co-living" as he calls it -- to life, Hargreaves's company on Sunday welcomed its first residents at 1162 Pacific Street, a newly converted 7,300-square-foot building in the Crown Heights neighborhood of Brooklyn. The company plans to open additional co-living spaces in Brooklyn and the U.S. in the coming months, according to Hargreaves, who declined to specify the locations.
Common is one of a handful of startups, including co-working giant WeWork, that are hoping to capitalize on the rising trend of co-living around the world.
Operating within the sharing economy ideal of unloading your chores and transportation to startups like TaskRabbit and Uber, co-living startups suggest that your living arrangements may also be too cumbersome.
Other co-living companies include the New York City-based Neuehouse, Brooklyn, N.Y.'s Pure House and San Francisco's Negev. WeWork's entrant to the market, dubbed WeLive, may be Common's top competitor. WeWork, founded by Adam Neumann and Miguel McKelvey, has $1 billion in funding and a valuation that tops $10 billion.
So far, Hargreaves, who co-founded computer-programming school General Assembly in 2012, seems encouraged by the competition. Not only does his startup have venture backing -- $7.35 million from Maveron and Lowercase Capital, among others -- his connection at General Assembly promises a nearly endless pipeline for new renters. Roughly 300 people applied to
live in Common's experimental dormlike community; just 19 were selected.
"This is the opposite of a winner-take-all market," says Hargreaves, who in a recent interview noted the potential for disrupting the rental market is vast. Indeed, the rental market is expected to reach $165 billion this year, according to research firm IBIS.
What's more, WeLive offers a rather different setup from Common, which Hargreaves thinks will be more palatable for some people. In places like New York City and Crystal City in Washington, D.C., WeLive is reportedly planning to rent out 360-square-foot "micro apartments," which will be incorporated within WeWork's co-working spaces. It had been reported that WeLive would open spaces this year, but a WeWork spokeswoman recently declined to comment on the timing. 
By contrast, at Common, individuals have separate living and communal spaces that can be used for co-working. Renters, who are
mostly students, according to Hargreaves, pay about $1,800 to $1,950 a month, and don't pay extra for laundry facilities, utilities, shared household supplies, and Nest thermostats. That's slightly more expensive than the average rents studio apartments fetched in the neighborhood in the past 13 months, according to New York real-estate firm MNS. They will need to be OK with sharing a kitchen, as there's one per floor. There are two bathrooms per floor, too, plus a half bathroom in the basement.
Unlike traditional rental apartments and homes that require at least two years of financial information, Common requests candidates provide six months of 1099 income or W2 information. Residents can also elect to rent month-to-month, so they don't need to sign one- or two-year leases, which are common in more traditional rentals. There's also an interview.

A look at Common’s communal live/work space at 1162 Pacific Street, the company’s first co-living space in Brooklyn.

"We look for people who want to actively be a part of the community," says Hargreaves. "We look for people who want to come to the potluck dinners, who are here to meet new people."
The bedrooms come outfitted with furniture, Casper mattresses, sheets from luxury linen maker Parachute and wooden surfaces on which people
can pin up posters and paintings to personalize their rooms. (Think: A hotel room you can decorate.)
The common spaces are decorated sparingly (but tastefully) with mid-century-style furniture from West Elm and Restoration Hardware. Artwork from Hudson, N.Y., artists hang on the walls, as do a few historic pictures of Weeksville residents, in a nod to the local community. Weeksville, a section of Crown Heights, was founded by African-American freedmen in the mid-19th century. The kitchens are outfitted with such basics as utensils, pots and pans. Shared consumables like olive oil, coffee and tea, and paper towels are delivered on a regular basis.
Couples, pets and family/friends bunking on the couch for a weekend are frowned on. However, Hargreaves claims the house rules -- yes, there's a code of conduct -- are common sense and not unlike what you'd have set up informally with roommates.
But keeping renters happy won't be Common's only job. Common doesn't own its buildings, it rents. The company will need to satisfy the building's owners, which may include real-estate developers and investors who purchase whole vacant buildings. Per the terms of how a typical agreement may be structured, these partners generally accept lower rental income from Common in exchange for a share of the company's revenue.
There's also the local community, which can be something of a wildcard. In the historically African-American and Hasidic Jewish neighborhood of Crown Heights, where Hargreaves has one building and more to come, acceptance of startup culture and technology workers isn't necessarily assured. Gentrification protests and vandalism have been common in communities throughout Brooklyn, particularly in poorer communities.
And while Hargreaves claims to be following the letter of the law, competitors like Negev have gotten into hot water. In 2014, that company was under investigation by San Francisco's Department of Building Inspection for violations of the city's hotel-conversion ordinance; room counts supposedly surpassed the prescribed certificates
of occupancy. Campus, a startup founded by Thiel Fellow Tom Currier, was unable to make a similar concept in the Bay Area financially feasible -- and that's after having secured $5 million in venture funding.
Despite the challenges, Hargreaves remains convinced that co-living -- and more broadly, the residential real-estate market overall -- is ripe for innovation.
"Residential real estate is one of the last industries where great user-experience design and technology have really not had a great impact," says Hargreaves, who noted that listing sites like Trulia and Zillow have merely scratched the surface. "What we're trying to do is go deeper into the stack and reinvent that, and not just create a better listing site."