19 Jun Don’t Call it Having Roommates, Call it ‘Coliving’
I had barely heard about Campus Coliving and their business model before I saw the sad announcement yesterday that they were closing down the company, a result of not being able to make any money at it. The problem I’d say is that as a company they were ahead of their time. We have not heard the last of ‘coliving’.
Actually, there is nothing really new about ‘coliving’, which is really just a fancy way of saying living with roommates. Its something people tend to do in college, and maybe for a while in their 20s. What Campus Coliving (one of a number of startups in the space) seized on though, is the fact that real estate prices in large cities like San Francisco and New York was making the possibility of solo living, even for employed college graduates, an incredibly difficult thing to do. In San Francisco, the typical rent for the ‘median’ one bedroom apartment is $2,450, and buying is out of the question. So Campus Coliving proposed formalizing the idea of having roommates, and putting them all together in beautiful spaces. Many were open to the idea.
Campus Coliving took on large leases (for houses say) and then subleased them to individuals. The idea seems to work fine with the renters, who are numerous enough to have filled 30 communities run by the company in the Bay Area, and another 4 in New York. Other companies are also in the business, or are getting into it. At its best, its a way to bring people together and let them live in spaces they would not normally be able to afford. At its worst, its a version of dorm living at exploitative prices (or that’s what New York magazine basically said in an examination of them).
Actually, in the case of Campus Coliving, it was the company who ended up being exploited. As well as taking on the leases, the company was providing furniture and shared items (everything from pots and pans to soap) and cleaning. Renters paid an extra fee for some of those things, the company still found the profit margins on their projects pretty tight. “We’ve been driven by a desire to help build meaningful relationships and bring a little more love and belonging to the world” reads the mournful message on the company’s website. ” Maybe they succeeded at that part, but they also say that “Despite continued attempts to alter the company’s current business model and explore alternative ones, we were unable to make Campus into an economically viable business.” Operations will cease in August.
Okay so they failed -but that does not make the idea a bad one. Maybe companies who want to adopt this model need to make the accommodations less swish, or to experiment wth higher rents. Or maybe they need to change their target audience.
As this story from Fast Company details, up to now it has mostly been eager young millenials who have embraced the coliving model, but they are not the ones who really need to save on housing costs. The really cash crunched in years ahead are, in my opinion, going to be retired baby boomers who find themselves in need of ways to save on everything, including housing.
Single boomers are the market, especially those who end up alone after first dividing up their assets through divorce. You may need a more welcoming, less dorm-like name for the companies who provide it, but they will be open to the idea of shared accommodation – or any accommodation as long as its cheaper than what they afford on their own.