Factors driving demand for Co-living Spaces
The loneliness and seclusion occasioned by the pandemic has created opportunities for innovation in short term rentals. People escaping from major cities and looking for lonely places to work remotely while keeping safe are now looking at new ways to regain community in the in the form of co-living spaces. This is driven by the need to live near people you can interact and share even as many people take on remote work. One of the pioneers of this idea, Outside recently released a report showing rising occupancy to up to 90% as other hotel bookings remain subdued.
Co-living is not a completely new concept but the pandemic has done much to elevate it to the limelight. The first businesses in this sector were registered as early as 2010 at that time focusing on young professionals in major cities like New York and Chicago. At this point millenials were looking to live in high end urban areas to get the feel of affluence on the fast lane. With this trend, these clients started linking up sometimes to share costs and have friends they can share life and business birthing the co-living concept.
The desire to live in high priced residencies has forced many professionals to try to connect with like-minded colleagues to either live nearby each other or share costs so as to afford the high rents. Covid -19 came as a blessing in disguise for this sector and it is now positioned as one of the potential growth areas post pandemic. Many businesses were affected by the slowing economy due to the pandemic but the desire to live a high end life has remained among those who still have the means.
The growth of remote work and the trend to move away from big cities has created new havens for co-lining in what was initially remote destinations. Investors are rushing to these places where people came to escape from the pandemic and are offering high end quality residencies for co-living. The concept seeks to solve the need for a luxurious working space away from the city and enable personal interaction without crowding up. This helps people to keep healthy mentally and socially – which have been a major problems during the ‘stay home’ and social distance era that is still persisting.
Besides the pandemic, there is a growing shift by renters to move from usual private areas to the more socially inclusive co-living spaces as social life becomes more and more scarce. Many in this category are those who have the money and means to afford the high rents but are tired living in secluded apartments and are now opting to live near friends or people they can share life with. This trend is gaining traction in more and more cities and investors are now looking at new opportunities in this front. The early adaptors like WeLive, HubHaus, WeWork and Open door have already invested heavily as competition mounts in a rush to be the market leader in this emerging niche within the short and long term rentals.