Why are millennials opting for this form of urban living?
This millennial mindset has already spurred a number of transformational developments for society. Social media platforms like WhatsApp, car sharing services like Uber, holiday home sharing like Airb&b, and co-working space like WeWork are just a few manifestations of their out-of-the-box disruptive thinking. In the real estate domain, co-living is quickly becoming the new buzzword and the idea has been gaining traction with millennials across the globe, especially in the US and Europe Co-living or “community living” is a new take on the old idea. What’s new is that, unlike in the past, individuals are being drawn together by lifestyle choices and not so much by religious affiliations or other considerations. The idea is to get smart about space sharing.
Typically, a millennial spends about 45 minutes a day in the living room and kitchen, and about nine hours in the bedroom. Yet, the living room and kitchen space constitute 60 percent of the real estate price, while the bedroom accounts for 40 percent of the cost. Co-living spaces optimise the real estate utilisation. By sharing the lower utilisation areas with a larger community, residents easily save about 10 per cent of the expense and property owners get a higher yield on the property on account of being able to accommodate more people on a floor plate.
For years, the “hacker house” has offered aspiring entrepreneurs a place to rest their heads — often a bunk bed — for cheap rent. In 2004, Mark Zuckerberg rented a five-bedroom house in Palo Alto, where early Facebook employees built the social network. But, now the hacker-house concept has evolved into into all-inclusive experiences that comes with lots of perks. Residents, or “members,” as they’re often called, can join these communities and instantly tap into amenities like free internet, maid service, and new friends.
Unlike the previous generations, young professionals today not strung out about possessions. If you have a phone nowadays you have computer, TV, camera, photos, music, books and even credit card all in one place so having a physical space for your landline, TV, stereo and etc is an obsolete idea. What they value are experiences, being part of like-minded communities and having flexibility and co-living delivers that.
Here are four key reasons why millennials are switching to co-living as a life-style choice and its considered the future of residential real estate for the urban millennial:
Value for Money
Many people nowadays are struggling to afford a house in major urban centres. And, it’s not simply the rent that is an obstacle – large deposit expectations, inflexible commercial contracts and absent landlords of traditional buy-to-let models are also real challenges.
In co-living spaces, people pay an all-inclusive rental package, including all utilities, housekeeping and maintenance, making shared-living a very cost effective, convenient and flexible solution.
Ease of Living
For urban professionals who typically move jobs (and homes) every 20 months or so, having to deal with furnishing, kitchen appliances and utility contracts when relocating can be a real hassle.
Co-living works is based on the plug-and-play model. Everything is provided like living in a classy hotel. Technology is used to increase service efficiency; saving you the hassle of dealing with everyday household chores and letting you focus on the more important things in life.
Sense of Community
While most youngsters tend to be hungry for the freedom to explore new horizons and possibilities, the journey can often get lonely. Studies suggest that more than 40 percent of millennials suffer from chronic loneliness. That’s why they cherish being part of like-minded communities.
Co-living offers the perfect antidote. Living in a community of like-minded individuals – bonding over breakfast and gaming evenings – makes it easier to have meaningful face-to-face conversations in an increasingly virtual world. Not surprisingly, community living is a trendy on the up.
Of the rental options, co-living spaces are surely the safer and more convenient choice for individuals in a new city. The community element ensures easy access to a whole of host of inside knowledge about the location which otherwise could take months to grasp. They also tend to be more organised and transparent when comes to security.
For instance, in our co-living Hive spaces, keys are a thing of the past; residents are provided with electronic access cards, fobs and can even open doors using their phones. Background verification and screening process of the staff, residents and contractors are also common practices.
Co-living is not a fad; it’s already becoming a sustainable category in the real state sector. Depending on the amenities and the kind of community you are looking for, there are quite a few options available today.
Startups like us – B-Hive Living in the UK, Cohabs in Belgium, Open Door in the US and others are experimenting with design, technology and service to build co-living spaces that appeal to the generation that is always on the move.
The rise of co-living does not necessarily mean the death of traditional home rental and ownership. But, you just need to do quick research to realise why the future of co-living looks bright as market and social trends provide a strong basis for its exponential growth.
Predictions state that in another five years we can expect home ownership to have dropped 40% in the UK. Only 10% of homeowners are aged 16-34 – this represents a jaw dropping 50% decrease since 1998 according to a study by the Resolution Foundation. The most recent English Housing Survey shows, millennials between the ages of 25–34 are more likely to be renting in the private sector than to be buying with a mortgage. What’s more interesting is that over the last 10 years the number of those aged 25–34 living in privately rented households has nearly doubled from 24% to 46%. The private rental sector is growing in the UK like never before. Housing can’t be built fast enough.
With property prices rising and the growing influx of millennial renters in the market, things are being transformed rapidly. Academics such as Alexandra Notay, policy director at the Urban Land Institute, argue that structural and lifestyle changes in society like flexible employment are boosting long-term demand for rental homes. The self-employed, start-up workers and flexi hour employees are all real example of a new segment of the population who do not want to be tied down by a mortgage and prefer the flexibility that comes with renting.
Technology has changed the way the world appears and functions, and co-living is set to change the way millenials and other segments of modern society approach housing in the future.
ABOUT THE AUTHOR
Hello there! I’m Wills. I am a self-starter, entrepreneur and unshakable optimist dedicated to building enterprises that make a difference. @ B-Hive I am the lead disruptor, constantly refining the ideas that make our Hives both unique and a force for good.