When Americans hear the word “co-living” or “dorms,” they usually think of college campuses and university-run projects. But the model is slowly becoming more common in the private housing market. Some projects target students who wish to live off campus, but others target a broader clientele of the working and professional classes. There’s reason to think that, regulatory hurdles aside, America will see more dormitory-style projects, which offer cheaper rents at a time when people are being price-starved for more standard housing.
I define “dormitory” as one that houses a large number of people who use shared spaces (including, sometimes, shared rooms). For college students, off-campus dorms would be a welcome trend. Colleges charge significant markups for on-campus housing – on average, the student room and board costs are $11,950 for public schools and $13,620 for private schools. Search by HUD find that thousands of students are homeless. In addition, schools often have waiting lists: to University of California-Santa Barbara is more than 1,000 students.
Perhaps the most notable off-campus dorm is Orlando. the “Creative Village” project incorporated dormitory-style housing into a large, mixed-use complex, for students at the University of Central Florida. Each room accommodates two residents. Prior to opening, the developer said the units would cost $690 per month (more than $300 less than the average monthly room and board for public college students). As of June 2020, the dorms had 600 occupants.
What is interesting Creative Village is the potential for housing near employment centers to stimulate job creation for students. A Florida Trends Magazine article notes that video game developer Electronic Arts, which typically recruits UCF students, has opened offices in the Creative Village complex. This is part of a larger trend to establish job and research hubs near state colleges.
But the development of co-living facilities is not limited to nearby college campuses. A company called Commmon adopted the model in a variety of markets, from New York to St. Paul. This operates 6,400 units (some of which are conventional apartments), which do not strictly mimic the most austere dormitories, where students share sleeping areas, but have private bedrooms and shared living rooms and kitchens. While Common fell on hard times during the pandemic, it has since recovered and acquired a rival company, San Francisco-based Starcity, which itself had 7,500 units in operation or in the works.
A Belgian company, Cohabsis moving in the New York City market, which intends to spend millions to acquire buildings that can house up to 30 units of co-living space. Other brands include one that is literally called Flatsharingwhile another aimed at seniors is called Live better. Other companies, such as the German company Quarters, went bankrupt despite trying to aggressively expand into the United States.
Cushman and Wakefield find that while the genre has struggled during the pandemic, the long-term outlook looks good, as “coliving assets have continued to maintain a rent premium per square foot (psf) of 23.2% over average rents Class A studio PSF in comparable markets as of the third quarter of 2020.”
If there’s a threat to dormitory-style housing, other than the fact that it’s a relatively non-traditional format, it’s heavy regulations. In the past, cohabitation agreements known as single room occupancies (SRO) weD widespreadbut strict regulations arose in most cities due to concerns about the ephemeral and criminal activity. Similar arguments are being made today for banning Airbnbs and enforcing “minimum standards” that prohibit certain lot sizes, unit sizes, and building standards.
But students are already used to living in dorms, and if market trends are any indication, many older people are too. Activists and politicians who want greater housing affordability should champion this format.
This article featured additional reports of Market Town Planning Report Ethan Finlan, content staff member.
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