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So Happy (Living and Working) Together

Tuesday, May 31, 2016
So Happy (Living and Working) Together
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Authored by Saeculum Research | Neil Howe

Over the past few years, co-working has made headlines for turning the work­place as we know it on its head. In recent weeks, it’s lesser known counterpart—co-living—has gotten its first big media rollout. Both co-working and co-living have become more commonplace over the past decade. These overlapping trends represent a cultural shift away from traditional work and home environments.

What is fueling the rise of these startups? Generational change is the primary driver. These community-oriented, struc­tured, and shared concepts appeal to the Millennial mindset. While these options aren’t without their drawbacks, they will likely be around for the long haul as Millennials put a new spin on the young professional lifestyle.

Over the past decade, co-working and co-living spaces have gone from Silicon Valley “hacker mansions” to full-fledged business enterprises. According to the Commercial Real Estate Development Association, there were 781 co-working spaces in the United States in 2013—up from just one in 2005. And these numbers have continued to grow. WeWork, for example, doubled in size from 2014 to 2015 to 98 locations in 28 cities around the globe. Boston-based WorkBar has expanded to 12 locations since its founding in 2009.

Co-living has also gained momentum. For Millennials, living with friends and family is the new normal. (See: “Millennials: Are We There Yet?”) While this trend has been building informally, companies are now explicitly organizing housing options around the idea of group living. Common, for example, currently has three co-living locations in New York City. And WeWork is launching two co-living operations called WeLive.

Both co-working and co-living represent a profound shift from the traditional work and home setup. Co-working startups, for example, lease office buildings and sublet the space to teleworking professionals, inde­pendent contractors, and small compa­nies. These individuals or groups rent or pay a membership fee to work in a shared space with others.While most co-working spaces offer monthly leases, a few offer daily rates on a per-desk basis. These spaces are designed for interac­tion. (WeWork co-founder Adam Neumann calls it “the physical social net­work.”) Whether it’s networking events or monthly pancake breakfasts, co-working companies take it upon themselves to ensure that no one re­mains anonymous in the workplace. Co-working spaces also provide Silicon Valley perks—including yoga classes, monthly hair blowouts, and even free beer on tap.

Co-living is simply an extension of this same trend. Co-living startups lease apartment buildings and rent out bed­rooms to individuals. These living ar­rangements are often much less expen­sive than a one-bedroom apartment. What’s the catch? Residents must share bathrooms, kitchens, and common areas. (Think “dorms for adults.”) Like their co-working counterparts, co-living compa­nies offer a wide range of conveniences, including laundry services, massages, and housecleaning. Co-living also entails a wide range of scheduled events for residents.

What is fueling the rise of co-working and co-living arrangements? The answer is simple: Generational change. These spaces tap into multiple segments of the Millennial mindset.

Most importantly, the co-working/co-living movement reflects the Millennial desire for community. Unlike young Boomers, who considered living alone and having the corner office the ultimate goal, Millennials would rather live and work together. Before co-working spaces, work-at-home professionals and independent contractors would simply meet up when they needed to collaborate on a project. Today’s startups have formalized this pro­cess and have added opportunities to socialize and collaborate with other groups. Co-living spaces have a similar mission. Whether its group dinners or book clubs, these arrange­ments are crafted to cure the isolation often felt in big cities. And loneliness is a huge prob­lem for Millennials. This social generation craves community and doesn’t mind relying on others for company. But many are putting off the relationships that would fill these needs—namely, marriage and family. (This tension explains the expansive online litera­ture on lonely young people.)

Millennials like the structure and safety these offerings provide. In many ways, co-living and co-working environments operate in loco parentis. Co-working startups are re­sponsible for making sure the printer works and the office stays tidy while workers con­centrate on the task at hand. And if a startup fails, employees can snag a job with another company in the same building. For Gen Xers and Boomers, the thrill of startup life was mostly tied to the risk of striking it out on your own. Millennials, however, want a safety net to catch them if all goes wrong. Co-living also eases the burden of living alone. These apart­ments have a hierarchy of authority figures who operate as residential advisors—interven­ing when conflict arises.

Millennials don’t mind sharing space with or being dependent on others. For this generation, there’s no reason to own a car when there’s Uber. Or buy a dress for a work gala when there’s Rent the Runway. The same mentality applies to co-working and co-living. Why pay for my own kitchen when it’s less expensive to share? And Millennials are willing to trust these setups. Millennials have been the recipients of special care since birth—and trust others to look out for their best interests.This runs completely against Gen-X instinct: These grownup latchkey kids didn’t have anyone looking out for them and defined adulthood in terms of independence and ownership.

Millennials also have a more blended definition of work-life balance. As we dis­cussed before (see: “Give Me a Break”), Millennials want to prove themselves in the office, which often means going above and beyond the call of duty—even outside the 9-to-5 workday. This is particularly true for those in the startup world, where sparks of inspira­tion may hit at 3 AM. Co-living and co-working spaces promise that someone will always be around to help brainstorm for new ideas. It also means that when every coffee shop is closed, there will be complimentary caffeine within walking distance.

To be sure, there can be such a thing as too much co-everything—even for Millen­nials. There are times both at work and at home when privacy is needed. Although co-working startup Alley offers private phone booths, open offices have been known to raise generational tensions. (See: “Open Offices Generate Buzz.”) Additionally, these envi­ronments require strict rules to keep the peace. For rule-abiding Millennials, “community policing” often is seen as being for the best of the group. For older generations who don’t want to be told what to do, that might not fly over so well.

In the years ahead, these arrangements will likely continue to grow and expand. For Millennials, co-working and co-living are a slam dunk. As Millennials age and their needs change, these offerings will likely evolve to meet them. Only time will tell what sort of co-situations will become the norm in decades to come.


 Takeaways

  • Co-working and co-living is the next big thing. Over the past decade, co-working and co-living arrangements have gone from informal “hacker mansions” to full-blown businesses. Both of these setups give workers the ameni­ties they crave at a low price—that is, if they are willing to share some space with others. What’s fueling the rise of these overlapping trends?  The answer is simple: Mil­lennials. These offer­ings resonate with the generation that wants a sense of community, likes structured envi­ronments, doesn’t mind sharing with or depending on others, and has a more blend­ed definition of work-life balance. In the years ahead, these co-arrangements will likely continue to grow and expand to meet the needs of Millennials as they enter the next life stage.
  • Co-working and co-living is a smart investment. Last year, Fidelity invested $400 million in WeWork and Maveron invested $7.4 million in Common. Al­though today’s co-working and co-living startups are all private companies, they present a huge opportunity for real estate manage­ment firms that wish to mirror their success. Today’s startups construct, remodel, and man­age these working and living spaces—drawing in rents far beyond the value of real estate. To be sure, many are skeptical of WeWork’s $16 billion valuation. But don’t forget that this company understands how much young profes­sionals are willing to pay (in price and space) for a community of friends.
  • “Friendship” apps reflect Millennials’ desire for to­getherness. Over the past few years, there has been an onslaught of apps designed to help Millennials avoid loneliness. MeetUp and Wiith, for example, allow indi­viduals in the same geographic area to meet up for events organized by other users. Hey! Vina pairs women up with new female friends. Other apps like Squad help groups of friends meet other groups of friends. Even dating app Bumble has a friend­ship setting. Nothing encapsulates Millennials’ ability to digitize relationships more than Ameego, which allows users to rent a friend. (Ameego’s creator hopes that the client and “professional friend” will become friends in real life.)
  • Millennials will want large-scale managed commu­nities. The popularity of co-working and co-living dem­onstrates just how much Millennials want organization and structure in their daily lives—something that isn’t likely to change as this generation starts looking for places to raise families of their own. And we are already starting to see this shift in the revival of “live-work-play” commu­nities. This concept was originally designed for urban-loving Xers, who wanted to live near restaurants and shops so they had the option to do whatever they wanted, whenever they wanted. Today’s live-work-play communities, however, emphasize structured events and modern-day conveniences like shuttle services and communal bike shares.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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