Think you've too many roommates? People with sixteen are paying additional for the privilege

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Source:   —  April 10, 2016, at 4:44 AM

"It'south excellent for when there'south high traffic in the downstairs kitchen, or, you know," he shrugged, "if you're not in a mood to be social."Standish, thirty-one, lives here with ten other people.

Think you've too many roommates? People with sixteen are paying additional for the privilege

Jay Standish showed off a three-story house in the leafy neighborhood of Adams Point, pausing at the home'south top-floor kitchen.

"That'south the second kitchen," he said, motioning toward the refrigerator, stove-top, sink and toaster ovens. "It'south excellent for when there'south high traffic in the downstairs kitchen, or, you know," he shrugged, "if you're not in a mood to be social."

Standish, thirty-one, lives here with ten other people. The house, called Euclid Manor, isn't a college dorm. It'south not a hostel-style "hacker house" either. According to Standish, this isn't a tech thing, or a hippie thing, or a rent-is-too-expensive-and-I'm-desperate thing.

It'south called co-living, and it'south a lifestyle choice emerging among youthful people who favor Airbnb over hotels and Lyft rides over car ownership. Rather than seeking out housemates on Craigslist, city-dwellers in high-cost markets such as the Bay Area and NY City are presently paying companies - some tiny and others, love WeWork, backed by millions in venture capital - a premium to live in a building with a curated roster of housemates, stocked kitchens and planned get-togethers.

It'south about building a community, Standish said. And for him, it'south also about building a business.

Standish and Ben Provan, thirty-two, running OpenDoor, which manages Euclid Manor and two other properties: the Canopy, also in Oakland, where twelve people live, and the Farmhouse in Berkeley, which sixteen call home.

The pair look themselves as more than landlords. Though they handle house repairs and rent collection, they also vet tenants to create sure that there'south a balanced mix of personality types in the house, support the culture of the houses, assistance running activities and act as mediators when needed.

"Humans are very social beings and pre-Industrial Revolution we lived in large groups," Standish said while showing off Euclid Manor'south dining room, which has a long, banquet-length table used for house meetings and dinner parties. "I mean, this house is an fascinating example of that. It was built in one thousand nine hundred-tenth, and back then you'd have these enormous estates where there were twenty people living in a house together," though many were live-in servants. (A "totally different dynamic," he said).

But Standish thinks that many people, particularly millennials, are eschewing the American dream of owning a house in favor of finding a second family of like-minded people.

Research from genuine estate site Trulia found that homeownership in the millennial age grouping is the lowest it's ever been. Around seventy % of people age 18-34 in the U. S. rent. Trulia'south chief economist, Ralph McLaughlin, said that's in portion because in places such as the Bay Area, NY and Southern California, the median buyer would've to spend upward of sixty % to seventy % of his or her monthly income to purchase a house.

The rise of co-living is a response to both escalating genuine estate costs and growing demand from people actively seeking such housing and willing to pay for it, McLaughlin said.

Research conducted in two thousand-fifteenth by British life insurance firm Beagle Str found that more adults than ever are waiting to move out of their parents' house, obtain married and have children. It'south not just because it'south economically harder, the research showed. Survey respondents also indicated that they don't cost living alone as much as earlier generations.

"The best way to characterize the mentality that encapsulates where we're at is the 'modern nomad,'" said Benja Juster, twenty-eight, an interactive experience designer who lives in the Canopy, whose residents are all in their mid-20s to mid-30s. "It'south a desire to not be locked down to one physical location ... to go with the wind and discover where life may take you."

Ariana Campellone, twenty-four, a nutrition and herbalism practitioner who also lives in the Canopy, said "traditional" adult responsibilities such as family planning aren't a priority for her right now, and she much prefers to live with others who can assistance her grow.

"Our values here are creative empowerment and skill-share," she said.

OpenDoor vets tenants beyond the normal credit history checks. Applicants have to reply questions such as what they could contribute to the house, what kind of environment they're looking for, and if they were a non-human animal, what kind would they be.

"I said I was a raccoon," Juster said. "I create do with scraps. I'm very resourceful and nimble."

OpenDoor is testing a different ownership structure for each of its houses to look what works best. It rents the Farmhouse, its first business venture, and subleases it to tenants. It bought its second house, the Canopy, outright. OpenDoor operates the investor-owned Euclid Manor.

The company'south income comes from the rent it collects from tenants, generally .000 to $1.200 a month, depending on the room and house. Standish and Provan declined to reveal OpenDoor'south margins, but said the properties are profitable, and co-living provides better returns than traditional housing. For tenants, the rent is more expensive than sharing a residence with ten or so roommates, but comparable to living with fewer housemates in the same neighborhood.

Aside from the food program, which lowers the cost of groceries, Standish and Provan said residents also obtain access to appliances and facilities uncommon in shared apartments - at Euclid Manor those comprise W Elm furnishings, a grand piano, a Vitamix and a cafe-grade coffee machine. The Canopy has a soundstage, a woodworking studio, and large living rooms with projectors and musical instruments.

But what tenants are really paying for is the "community," Standish said. "Living as family, basically."

In NY City, a co-living business called Common has raised $7.35 million in venture capital funding to open two buildings in Brooklyn, with a third planned for this spring. Founded by serial entrepreneur Brad Hargreaves, the startup holds master leases on its buildings and also plays a property management role.

Its apartments are fully furnished and stocked with items such as toilet paper and paper towels. Tenants share apartments within the building and have access to common areas. They communicate using the grouping messaging app Slack, and Common organizes building-wide activities love film nights, yoga, breakfasts and dinners.

WeWork, the $16 billion startup that's raised more than $1 billion in venture capital funding and leases co-working spaces in Los Angeles, San Francisco and New York, is also dipping its toes into co-living. Its building in NY City has forty-five units, a mix of studios and one- and two-bedrooms, with communal events such as potluck dinners and fitness classes. It doesn't own any genuine estate, opting instead to lease entire buildings.

Despite soaring rents in places where co-living companies have set up shop, these ventures can still be risky, according to genuine estate experts, particularly if they attempt to widen too fast.

The best-known co-living failure is the venture capital-backed Campus, a San Francisco startup that launched in two thousand-thirteenth. Within two years it had thirty houses on master leases. But the company close down latest Aug because it was "unable to discover a way to create Campus into an economically viable business," founder Tom Currier said in an email to tenants. Currier couldn't be reached for comment.

It'south a error to think that the speediness that works for tech startups will also work for a genuine estate startup, said Michael Yarne, a partner at San Francisco development firm Build Inc.

"The venture capital world is obsessed with speed and scale, but the world we're in goes really damn slow," Yarne said.

The unhurried return on genuine estate properties hasn't keep off investors with cash, though. Venture capital firm Maveron Ventures invested in Common because it believes that companies love Common fill a need.

"What we're looking for are huge industries where consumers, and particularly millennial consumers, perceive disconnected from the brands that exist," said Jason Stoffer, a partner at the firm.

Millennials "expect a level of authenticity," he said, "and the reality is an Avalon Bay apt building is sterile. It'south not authentic. You don't know your neighbors. People wish a level of responsibility and a brand which has a soul."

For Standish and Provan, co-living houses are the first step. But why stop there? The pair have a long-term vision of creating sustainable communities in different formats - maybe one for families too.

But first, they're focusing on the three houses they have. And answering age-old questions of communal living, love who'south going to do the dishes.

"Well, if we can't figure that one out, how are we going to solve climate modify and economic inequality?" Standish laughs. "So let'south start with the dishes."

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