‘It’s great having people here when I come home’: Behind rise of co-living
It was a typical group-house scene: As evening rain pelted their Lake Merritt neighborhood, Randy Jordan spun a Stevie Wonder record on a turntable, while Carissa Villafaña sauteed vegetables and Jessica Bruno lounged on a leather sofa. Their other housemates were out for the evening.
“I love co-living,” said Bruno, 28, a tech saleswoman who moved into the six-bedroom house when it opened in August. “It’s great having people here when I come home.”
The home, run by the 2-year-old San Francisco company Bungalow, embodies a trend that’s spreading rapidly across pricey cities in the Bay Area and beyond: co-living, in which unrelated people share spaces and split costs.
“It’s a natural response to really fundamental problems,” said Richard Florida, a professor at the University of Toronto’s School of Cities. “People are searching for community. Cities are expensive. It stinks to move to a city and live on your own.”
Living with others is nothing new, of course — think boardinghouses, residential hotels, kibbutzes and communes, not to mention retirement communities, college dorms and the Bay Area necessity of roommates.
But the current crop of startups pushing co-living — including Starcity, Common and WeLive (a division of co-working company WeWork) as well as Bungalow — reflect a surge of interest in the housing market from Silicon Valley, which is particularly adept at bringing Millennials into the market.
“Co-living is growing like wildfire,” said Robert Boyer, an urban planner and sustainability researcher.
The concept’s rise springs from several trends, including soaring rents and the housing shortage; the comfort with strangers engendered by Airbnb, Uber and other on-demand services; and Millennials’ interest in experiences over possessions.
Florida found that 109 co-living and co-working startups drew $6.4 billion in venture backing from 2016 to 2018. Bungalow, which operates more than 300 homes with more than 1,300 residents in 10 cities, has $14 million in investor funding plus a $50 million line of credit.
At Bungalow, as at most co-living communities, residents rent private bedrooms and share the kitchen, living room and dining room, which sport Instagram-worthy furnishings and amenities including big-screen TVs. Houses are stocked with essentials from toilet paper to cutlery. The companies arrange social events such as wine tastings, theater trips, hikes and escape room experiences.
“We’re creating rich and vibrant communities,” said Andrew Collins, Bungalow CEO and founder. The idea grew out of his struggles to find housing and friends when he moved to the Bay Area after college.
The company makes an effort to match compatible roommates. “Instead of taking a risk on Craigslist with potential roommate horror stories, we do reference checks, background checks, qualitative and quantitative interviews,” Collins said.
“I love the impulse of making spaces where people who otherwise might put in their earbuds and never interact are drawn in,” said Marc Dunkelman, a fellow at Brown University and author of “The Vanishing Neighbor,” about Americans’ loss of some social circles. “It’s terrific that (companies) are experimenting with different environments to get people to talk to others.”
Many co-living startups extensively rehab existing properties or build new ones. They often have a dozen or more residents, sometimes with on-site community managers, which has given rise to the sobriquet “dorms for grown-ups.”
By contrast, Bungalow rents existing single-family homes, generally four bedrooms or more, which are move-in ready or just need painting. That approach, the company said, allows it to grow rapidly and to keep costs down. Los Altos’ HubHaus and Berkeley’s OpenDoor have similar approaches.
“We’re not reinventing the wheel; we’re leveraging existing housing stock,” Bungalow’s Collins said. “There just aren’t that many large families anymore to rent five-bedroom houses.”
While Bungalow pays property owners market rate or a little less, it guarantees stability for two or three years, eliminates the need to hire a property manager, and handles all repairs during its tenure, making it a good deal for owners, he said.
The three Oakland Bungalow residents said they pay between $1,100 and $1,250 a month (larger rooms with private bathrooms cost more). That includes utilities, Wi-Fi, a biweekly house cleaner, and monthly recreational outings, which are open to all the Bay Area Bungalow residents. “A one-bedroom apartment around here would cost twice as much,” Jordan said.
Co-living companies don’t always have a clear path into their target markets. Some cities have zoning rules that limit how many unrelated adults can share a house. Bungalow, with a target size of three to five renters, rarely runs into this issue and has not encountered it in the Bay Area, according to Collins.
Another potential issue is rent control. Not wanting to tangle with those regulations is largely why Bungalow has stayed out of San Francisco, Collins said.
Then there’s the potential for backlash from housing advocates.
Peter Cohen, co-director of the Council of Community Housing Organizations in San Francisco, said turning big single-family homes into modern-day boardinghouses seems fine, but converting existing apartment buildings or single-room occupancy hotels — as some co-living companies do — “is, effectively, shifting precious existing housing supply from one clientele to another. It’s the robbing Peter to pay Paul effect.” With such conversions, he thinks that requirements for below-market housing should apply.
Like other co-living companies, Bungalow focuses on expensive areas with lots of tech workers, including Los Angeles, Seattle, Chicago, Boston, San Diego, New York and Washington, D.C.
While co-living tends to draw Millennials, people of other ages also find it attractive. Accountant Taj Chibnik, 46, stumbled across co-living while apartment-hunting on Craigslist and visited several Bay Area houses run by various companies before deciding to move into a HubHaus unit in Berkeley.
“This lets me have money left over for savings,” she said. “When I was a kid my dad lived in a commune, and I have good memories of it, so the idea of co-living was cool.”
For Bungalow resident Jordan, 35, who calls himself “the old man of the house,” cohabiting comes naturally.
As a Coast Guard petty officer, “I lived on a ship with 118 people that went to sea for months at a time, which can get a little crazy,” he said. “I can manage five roommates.”