Over the last couple of weeks, we’ve talked with numerous thought leaders and movers and shakers in the shared living space as part of my Entrepreneur in Residence journey at Builders.
The big question we are tackling is how to best support the running and scaling of shared residential spaces, such as coliving and student housing, through technology. A topic that I have dedicated my professional life to — first through working with various online platforms, later also by running my own co-living project in the Netherlands.
This article puts forward five bold scenarios for the future of shared living, straight from the collective minds of those that are leading the field.
Short recap: The article is part of my mini-series 101 in running and scaling shared living spaces with technology. The series aims to provide an overview of the space, highlighting essential challenges and giving potential solutions when running or scaling your shared living spaces. At the same time, it aims at opening up a conversation between those of us who are passionate about building and scaling these communities.
This is article represents part three of the series, the full series is structured in the following way
Part 1 — focuses on the state of play such as terms used and technology available
Part 2 — is a deep dive into the challenges of running and scaling shared living spaces
Part 3 — explores the future of coliving, and possible scenarios of how the field might evolve in the years to come.
Part 4 — describes what kind of software is needed to help operators run and scale their operations to be ready for whatever lies ahead
The rising importance of shared living concepts
Across all our conversations, one thing was a recurring topic: shared living will become even more relevant in the future because of the following trends:
Change in needs — the younger generations have different expectations of what living should look like. They believe in access over ownership, are happy to share resources, highly value flexibility and are seeking out great experiences.
Urbanization — younger generations are still keen to live in the cities as they promise a better lifestyle, convenience and opportunity. Even Covid-19 will not change this thinking.
Rising rents — with more and more people moving into the cities, this leads to rising rents, causing difficulties for many to afford to house, increasing the need for new concepts to reduce costs.
Sustainability — the world’s population keeps increasing, while the space we have available is finite. This also leads to rethinking living concepts and how to reduce the resources needed to house all of us.
And next to all these overarching trends, since this year, we also need to consider how Covid-19 will and has impacted our world.
The role of Covid-19
Since early 2020, Covid-19 has disrupted our way of living. While short term accommodation like tourism has taken a major hit, shared living has done surprisingly well during this period. Most importantly, Covid-19 has also accelerated a trend that already had been building up in the market before: The service revolution in the housing sector resulting in even more people looking for more than just space .
Previously, it was primarily the millennials and younger generation that were used to having the world at their fingertips — expecting to be able to request and enjoy a product or service whenever and wherever they were. Covid-19 has turned this expectation from a niche into mainstream, as remote and digital-first has become the norm of how people are living their lives today.
And while — relative to its size — residential real estate historically has seen very low amounts of innovation, the shared living has always been technology affine. This is why many expect it to benefit from the accelerated developments and shifts of behaviours and expectation with regards to living.
5 scenarios on the future of shared accommodation
Based on these thoughts, here are five scenarios on how the future of shared living could play out, straight from the collective minds of those leading the field.
Scenario 1 — While Airbnb has made the cities more expensive, coliving will make city living more enjoyable and affordable
Coliving, at its core, is all about convenience, affordability and community. As such, it could provide the answer to some of the major challenges we are facing today — think about the social crises, economic crises and environmental crises. If coliving stays true to its mission while maturing in the years to come, it can offer a superior quality of life at an affordable price. When it starts to meet the growing needs for digital-first experiences, shared living can become the norm of city living in the future — contributing at the same time to a more sustainable way of life. With this, it will make the cities more enjoyable and affordable.
On the way to making this vision a reality, one of the challenges will be to stay true to the core of coliving in all the many decisions that every coliving operator needs to take. Decisions that, when looked at individually, might be hampering progress towards other goals — such as maximizing returns, reducing time to market, etc. This might give rise to scenario 2.
Scenario 2 — The success of coliving might lead to its demise
With coliving stepping into the spotlight over the last couple of years, the sector has also attracted an increasing amount of institutional investments. This rapid increase in funds flowing into the market might put the coliving concept at risk of becoming just another marketing gimmick. With little formalized requirements and definitions and coliving places growing like mushrooms in modern cities, this will become a moment of truth for the movement, and could lead to its demise: too fast is the growth, too tempting the promise of even bigger returns. Corners being cut, and decisions might be made that favour revenue over what used to be the core of coliving.
During this intensive period of growth, one thing needs to be seen: is the focus on community indeed the fibre that holds these places as well as the movement together, or is just a marketing trick that will vanish as soon as bigger financial considerations are at play?
The third scenario develops a view on what type of operator model could become the predominating one — if and when coliving successfully emerges from this period of rapid expansion.
Scenario 3 — The future of coliving belongs to the niches
As shared living is becoming increasingly mainstream, it also opens up new segments such as families, older people, etc; creating different niches within its overall category: coliving for students, intergenerational coliving, coliving for entrepreneurs, etc. Such specialization will be driven by the need of the operators to differentiate themselves in an increasingly saturated market.
At the same time, as the lines between work and private life keep blurring at an increasing speed, more and more companies will empower their people to work remote first. This could create a new type of coliving set-up: the enterprise coliving in which major companies buy into bigger coliving buildings to set aside their very own housing stock for their (mobile) workforce, globally.
This development could bring coliving places even more into focus for companies looking for new ways to win in the war of talent. As a result, operators might realize that if they target an even better-defined audience, this also might also make their coliving spaces even more attractive for other sorts of partnerships with the world of work. Offering companies to tap into the network that operators have built — think sponsorships, introduction fee for future talent, speaker events, partnership programmes, etc — might even grow to such a scale, that, financially, the operating income from the beds could become marginal in comparison.
The future of coliving is not necessarily dominated by the most prominent players, but by those that can foster the most authentic community, while also finding a way to run their operations smoothly. The fourth scenario explains what role technology might play in all this.
Scenario 4 — A superior tech setup allows new players to dominate the field
While the current tech for shared living is still very fragmented, the next generation of technology will empower the coliving movement to scale the right way. It increases coliving convenience (think touchless onboarding, facial recognition, voice controls, etc.) but also powers a rewarding living experience for the members (think, e.g. influencing the selection and composition of the members, connecting them with each other as well as with the city they are living in and creating a global community of like-minded people). It finally also allows the coliving operator to optimize their operations (property management, tenant management, etc.).
On top of that, the future coliving tech merges hardware and software capitalizing on the IoT potential for coliving (think sensors, smart devices and smart buildings), and like this provides actionable data and insights on almost everything that happens within the building. This turns any coliving space into a well-oiled machine, and helps to further optimize the layout and use of space, the services and amenities offered, as well as to streamline as much of the building and tenant management processes as possible. And, while the technology is not only important for scaling coliving places, if done right, the automation of mundane tasks will also free up the capacity of its staff to focus on the human side of building and running coliving places and making connections. All of this will ultimately drive stickiness and efficiencies even before people are moving in and eventually after people are moving on.
A tech set-up like this will allow new players to crack the puzzle and create scalable coliving models, so that — like in banking — some of the players that will be leading the field in five or ten years, do not even exist today.
And the new ways of living might emerge as a result of such a tech set-up are the topic of the last scenario.
Scenario 5 — Dissolving the traditional rental contract:living anywhere, anytime
One of the key characteristics of shared living is the convenience it offers, also in terms of its rental flexibility. With an increasing number of jobs in the future being remote first, and the number of freelance workers further increasing, this will give rise to new mobility and freedom of choice with regards to your location of stay; if not bound by a traditional rental contract and a conventional model of living, like long-term rental, owned furniture, equipment, etc — where would you choose to live?
Here the future belongs to those that dissolve these traditional structures, and create global communities of like-minded people. To create and cater to those communities will become the focus of the global brands, which, like we see with loyalty programmes of hotels, will drive future retention of their members, as well as lower cost of acquisition and their lifetime value.
Similar to how low-cost airlines and Airbnb made city hopping, and weekend travel enjoyable and affordable, coliving providers will power the next wave of mobility: the mobility of the global, mobile workforce. Because if your work is remote anyway, why not live in all those stunning places the world has to offer? Given that upon arrival you already knew that all administrative hassle will be taken care of, and you already had a network of like-minded people to connect with?
Realizing the increasing likelihood of this scenario to play out will initiate a race of major providers to strategically position themselves to capture this market; striving to build global communities of coliving and co-working members, offering them access to housing and working environments — all within the convenience of the same membership contract and in the company of like-minded individuals.
About the author Michael Steinmann is the Co-Founder and CEO of Obeyo. With more than 15 years of experience in growing and scaling SaaS companies, he is always up for connecting and conversing about the present and the future of residential community building.