The very simple argument for the rise of co-living: people need people
People, people who need people, are the luckiest people in the world.
So go the lyrics of the famous Barbara Streisand song. It was also a theme at a future of cities panel at Disrupt today, where the discussion came back and time again to community as a competitive advantage — particularly when it comes to startups that are trying to shake up the long-staid but quickly evolving $200 trillion real estate industry.
Featuring Brad Hargreaves, the CEO of the co-living startup called Common; Shruti Merchant, the CEO of a the co-living startup HubHaus that more recently launched in Mountain View, Ca.; and Stonly Baptiste, an investor with a New York-based seed-stage venture firm Urban Us that’s focused on addressing climate change through smarter cities, all three argued the business case for businesses renting rooms at a premium in exchange for amenities that were once found only at hotels.
Common and HubHaus, for example, are part of a growing spate of companies that don’t acquire buildings but instead act as property managers — Common in New York, San Francisco and Washington, D.C.; and HubHaus in Mountain View, Ca. (Both companies plan to expand into other cities.)
Merchant said her startup was born of her own experience, living in a seven-bedroom house that had so much energy, an eighth tenant asked to live in the garage. Hargreaves, who’d earlier cofounded the adult education school General Assembly, meanwhile said he started Common because he knew that housing supply in urban centers was a problem poised to grow even more extreme.
Baptiste said he has backed another different community home startup, Starcity, in keeping with his interest in backing founders looking to disrupt transportation, built environments, utilities, and other massive industries that are ripe for tech-driven changes.
The three painted a rosy picture of the benefits of co-living — community being first and foremost, given that it’s become a scarce commodity in today’s day and and age. Yet moderator Jon Shieber pushed back several times, asking if the lifestyle being sold is really for everyone. How much does the average tenant make in salary, he asked, and do the companies worry that they’re burnishing the already obnoxious stereotype of the wealthy techie?
Hargreaves and Shruti shot back that their community spaces are diverse in terms of the industries, ages, and backgrounds of the tenants who live in them. Baptiste took the opportunity to mention a new partnership between his venture firm and Urban X, a startup accelerator that’s co-run by BMW and focused on reimagining city life around the world — not just in U.S. city centers.
Baptiste further added that co-living spaces will also likely appeal to a growing population of elderly Americans, who may be “looking to share the burden of aging together.” (The type of amenities offered by many co-living spaces could certainly be attractive for older populations, too.)
In the end, argued Hargreaves, both the way people live, and the people overseeing the buildings where people live, are both in dire need of a refresh, and startups like Common would be foolish not to pursue that opportunity.
“You still need to build something [that] a bank is willing to tolerate [as a lending prospect], but you can do that in a friendlier and more convenient way.”
Hargreaves added (to laughter from the crowd) that one of the reasons he’s particularly excited to be a founder in real estate is that it’s the “last bastion of family businesses — business where the patriarch has two sons, and the smart one does the acquisitions, and the stupid one does the property management.”
It’s also one of the very few industries where Google and Facebook and Amazon (and technology, more generally) haven’t already staked a claim, he said. “Real estate is one of the last industries where someone is running that business just because they’re related to the guy who ran it before.”