As an entrepreneur at the spear tip of the wellness co-living movement, I am on the frontlines of the convergence of several trends that are shaping the future of residential real estate. From my vantage point, it looks like we are at the early stages of a seismic shift in people’s relationships with their living spaces. Just as co-working has uprooted traditional models around corporate office leasing, a slew of companies in our corner of the industry are leading a shift away from both homeownership and apartment rentals toward a new, membership-based residential model.
Wellness co-living is a new idea. Succinctly, it is this:
1. The creative repurposing of residential properties to accommodate communal living: People living together as a community in exchange for awesome amenities and greater affordability.
2. A shift from long-term lease obligations to short-term memberships, somewhat analogous to the difference between a 12-month gym membership and an on-demand membership service such as ClassPass.
3. The consolidation of numerous amenities that would be unattainable individually are now possible via a community pooling resources, i.e., a home gym, co-working space, a personal chef, a yoga room, a movie theatre, unique experiences and TED-style talks in your living room.
If the economy continues to grow and prices go up, this shift toward membership-based real estate and wellness co-living will continue. If the economy declines, people will downsize, and it will continue. And if things stay the same, the cultural shift toward wellness will continue to propel this industry’s growth.
The point is that wellness co-living is on the rise and here to stay. Many companies — Ollie, WeLive, The Assemblage and Haven (the one I founded), to name a few — are growing and thriving because they are building communities upon this thesis. It will profoundly change the fabric of urban life, and it’s worth understanding why.
From my perspective, here are the main trends driving the rise of the wellness co-living industry:
1. Rising Urban Living Costs
America is at the tail-end of a decade-long bull market. Low interest rates, job growth and a booming stock market have driven property values to unprecedented highs. In Venice, California, studio apartments are renting for $2,500, and two-bedroom apartments can be upward of $5,000 per month. Macroeconomic forces have created a disparity between supply and demand in all major metropolitan areas. There is an immense demand for “affordable” housing in the heart of urban areas. Yet, supply simply isn’t there, and it isn’t going to be — at least not in a traditional way.
This reality leaves only three options:
1. Move farther away and commute (millennials who value their time loathe this idea).
2. Build up (even if zoning permitted this, which it often doesn’t, building up takes years).
3. Innovate, get creative and make comfortable luxury co-living a reality.
2. The Sharing Economy
There is a general shift away from “ownership” by millennials. Things that used to represent the hallmark of high achievement are now just cumbersome obligations. Airbnb has removed the desire by many to have a vacation home. Uber has caused a shift away from car ownership. Netflix has ushered a shift from content ownership to access. WeWork has led a shift from traditional corporate offices to flexible membership arrangements.
Right now, as technology that connects us continues to rise, the shift from ownership to access, from materialism toward “experimentalism,” will continue. It is a trend that has disrupted every industry in its path, and the last trillion-dollar industry that remains undisrupted is residential real estate. That is about to change. The seeds of disruption have been planted, and they will continue to sprout. If recent history can be our guide, those who deny this will lose, and those who embrace it will ride a tidal wave.
3. Loneliness, Burnout And A Cultural Shift Toward Health And Wellness
For the past 30 years, our society has glorified working hard and burning out. In the 1980s, capitalism at all costs was a guiding force of American culture. This trend continued into the 1990s and was amplified by the rise of internet technology. The dot-com bubble fueled the drive toward riches.
This decades-long glorification of wealth lasted for so long because, despite its superficiality, people were still connected. There were no smartphones, and there was no Instagram. For humans to remain connected, they had to see each other face to face. And that interaction nourished us and sustained us through a long trudge toward the ultimate materialism.
But then, with the rise of the smartphone, that cultural thread began to wear thin. Materialism at all costs was previously tolerable because it supported authentic human connection: dinners with friends, relationships, meaningful interactions. With technology, that support system frayed. Streaming by yourself replaced movies with friends. Social media replaced authentic friendships. A culture of materialism, amplified by technology that perpetuates isolation and loneliness, is a pretty terrible place to be, yet that is where many of us find ourselves.
Today, for many millennials, it has become unbearable to slave away at work and go home to complete social isolation. For the first time in my lifetime, I am witnessing people get so burned out that they radically transform their lives to prioritize wellness — they are even leveraging technology to support this newfound appreciation for wellness. Exercise and meditation apps are booming. On-demand organic food delivery services are on the rise. In an incredible turn of events, I am seeing people use technology to reinforce healthy behaviors rather than destructive ones.
As burnout and tech-enabled isolation continue, so too will the trend of millennials prioritizing wellness over materialism, and wellness co-living appears to be the ultimate rebellion against it.