Key Highlights

  • Developers are targeting more affluent demographics for co-living developments
  • Co-living developments appeal particularly to Millennials and Gen Zers
  • Co-living developments are growing more options

Some of us of “a certain age” may look at co-living developments as the “same old thing” we did while living at college, not as the “new, next thing” in real estate. You know…we essentially rented a bedroom in a multi-family style building while we shared a kitchen and often a bathroom as we shared communal spaces and workspaces.

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Not much has changed in co-living developments except that many co-living residents are older than we were while we were in college. And the people attracted to co-living developments are Millennials and Gen Zers who are being priced out of more traditional rental and/or single-family units.

According to a recent report by Cushman Wakefield entitled “Is 2019 Co-Living’s Moment?” developers of co-living housing arrangements are, in fact, targeting Millennials and Gen Zers for a variety of reasons:

  • Young professionals are increasingly feeling the lack of affordability in housing
  • Student loan debt has increased +157% between 2008-2018
  • The average alum of a four-year college/university is +$37,000 in arrears due to student loan debt
  • In Chicago, a renter could save $400/month in a co-living situation instead of paying the typical $1,600/month in rent
  • In Boston, co-living renters save as much as 25% on rent
  • Residents in co-living arrangements feel safer
  • Residents in co-living situations feel less isolated
    • 46% feel alone some of the time
    • 47% feel “left out”
    • 43% believe relationships lack meaning from time to time
  • 31% of Millennials are accustomed to living with roommates they didn’t previously know
  • 43% of Gen Zers are accustomed to living with roommates they didn’t previously know.

And, investors are taking notice of co-living developments and are, in fact, growing more co-living options as affordable housing options grow more sparse.

  • The Collective raised $800M in a recent funding round in order to open a co-living development in London with 705 units in early 2020.
  • Common is partnering with Tishman Speyer to launch Kin, a co-living development for families.
  • Node is appealing to the late 20’s – 30’s demographic who are earning no less than $70,000/year.

 

Thanks to InmanNews’ Michael Zaransky and Cushman Wakefield for source data.

Also read: Best Cities for Gen Zers, Podcast: How to Transition from Part Time Dabbler to Full Time Rock Star (Part 2) Podcast: How to Transition from Part Time Dabbler to Full Time Rock Star