Adult Proms, Yoga And A Yacht: Sharing Is Caring In The New Co-Living Paradigm
When Jords Day moved to Los Angeles a year ago, he didn't know a single person.
Like many aspiring artists with stars in their eyes, the 24-year-old native of Essex, United Kingdom, came to Los Angeles to pursue an entertainment career in singing and songwriting.
But to do that, he first needed a place to stay.
While he looked for permanent housing, he used Airbnb and paid $1,600 a month to live in a small bedroom inside a house.
For a struggling artist with a stage management job, a place of his own in a market such as Los Angeles, where the average rent is $2,850, seemed out of reach.
"I would scour apartment websites and the prices were ridiculous," Day said. "It was like the listing would say, 'You need to sell your liver in order to live here.'"
One listing he found was for a small corner of a living room with a beanbag chair in it, he said. It was going for $1,200 a month.
"It was extremely hard," Day said. "Because of how competitive the L.A. housing market is, there are a lot of people grabbing all the good stuff."
Finding housing was difficult — until Day found not only a place to live but a community of like-minded artists at a co-living building called Upstart Creative Living.
With eight locations and more to come, Upstart is one of the many owners and operators of co-living buildings that have entered the Los Angeles multifamily landscape in recent years to provide affordable housing for mostly young single professionals.
At Upstart, residents or members pay $650 to $800 a month to sleep in a Japanese-style bed pod and have access to curated community activities and common areas including a gym, an art room, a theater room and more.
Upstart CEO and founder Jeremiah Adler said he is in the process of raising $15M in Series A funding to take his concept nationwide.
"We want to fundamentally change the affordability of Los Angeles and change the world," Adler said. "We want to empower young people in the world with only $1K in their pockets and give them a place to stay."
Once considered an experimental concept in the multifamily landscape, co-living is picking up steam from developers and investors nationwide.
Many co-living developments are situated in urban and dense coastal markets where there is a high cost of living, expensive housing and job opportunities.
In a co-living building, residents usually pay about a third or less than half of the average price of rent of an area. Co-living residents live individually or split a small bedroom with one or multiple roommates but share the building amenities such as a kitchen, a bathroom, a living room, a fitness center, WiFi and more.
Unlike some apartments, co-living emphasizes strongly on curating communal activities and experiences.
For example, at Upstart, the company hosts an adult prom, yacht and beach getaways and because the company focuses on attracting young artists, provides free recording and dance studios and acting classes. All of this comes at no additional charge.
A JLL report released in June found that investors are taking notice of co-living's popularity. Funding in the co-living space has increased by more than 210% annually since 2015, totaling more than $3.2B, according to JLL.
This year, $800M has been secured, with $283M in the pipeline, the report found.
Aside from saving money in these markets that have a high cost of living, fueling the demand for co-living is a fundamental shift in attitude toward communal living from millennials and Generation Z, Washington, D.C.-based JLL Managing Director of Multifamily Capital Markets Christine Espenshade said.
"I think people are realizing with millennials and Gen Z, the early indications are these are people not focused on money. They want to focus on happiness and love their jobs and be near their jobs," Espenshade said. "And honestly, they are happy living in a smaller place or space if that works for them."
Uber, Lyft, WeWork, Airbnb and other sharing companies have changed how people live. So why not co-living?
"There's a lot more willingness to share amenities, share a car, subscription services where you can get a nice suit and send it back," Popov said. "Why not share all these different amenities with your [co-living] neighbors?"
Whether co-living is a fad remains to be seen, Popov said, but it already has made an impact in the multifamily industry.
Many apartment owners are building out more amenity space and some are offering curated programs for their residents, he said.
Popov added that fundamentally, co-living works because it is affordable for young adults, who are priced out of the market. Many young people are saddled with high student loan debt coming out of school and want to live and work in urban coastal dense areas at an affordable price.
"Is this something that people really desire or a coping mechanism from today’s urban economy?" Popov said. "Either way it’s a natural way of creating density when we’re not necessarily building more housing.
"Having these new household arrangements are a great way to survive in an expensive American city," he said.
JLL's Espenshade said at the moment, co-living buildings skew to the younger demographic but she would not be surprised if there are co-living projects for families and seniors in the future.
"It’s here to stay," Espenshade said. "It’s not a flash in the pan. We’re going to see more of it and considerably, it will become more mainstream."
Adler, the founder of Upstart, says he is focused on helping young artists make it in Hollywood.
Like many of his co-living members, Adler was a struggling artist, too. He moved to Los Angeles to become a screenwriter and director. However, he ran out of money and got a job at a property management company, hoping that would support his career and ambition.
However, the job's demand, along with other financial responsibilities, including housing, didn't allow him to continue his artistic career.
"I had this early 30s crisis when I realized I wasn’t doing what I wanted to do," Adler said. "Because of the lack of affordable housing in the city, I essentially gave up on my dream career."
With money from friends and family, Adler opened the first Upstart three years ago. He wanted to make the city and the world affordable for young creative people, he said.
He describes his co-living buildings as a cross between summer camp and a college dorm. Rather than credit score checks, he asks applicants to send in an essay or video about their creative career goals.
Upstart has grown to eight locations and more than 400 members. Each property has a waiting list of 50 to 60 people, Adler said.
On a recent visit to one of Upstart's Hobart House building, a crowd of young residents gathered around the kitchen, chatting, cooking and eating pancakes. It looked like a group of college students hanging out inside a dorm room. Some sat on a nearby circular couch. One person sang, while another was playing a guitar.
There are 96 residents living in 16 bedrooms in a building on a 12K SF lot.
Day, the UK singer and songwriter, was visiting friends that day. After moving in to another Upstart building, Day said he has been able to network and meet with others who share his passion. He has collaborated with roommates on music projects and learned other facets of the music industry.
"I'm around like-minded people," Day said. "I have all these resources. I've been able to network, meet agents, produce and write projects.
"Living in L.A. can be one of the loneliest things in the entire world," Day said. "But living here has changed my life."