How coliving is transforming urban housing with innovative models addressing affordability, community, and the future of city living
The coliving industry has experienced remarkable growth over the past five years, defying skeptics and proving that shared living spaces are more than just a passing trend. Despite challenges ranging from regulatory hurdles to pandemic-related setbacks, coliving spaces continue to gain traction as a viable solution to urban housing affordability and social isolation.
According to a 2023 report by JLL Research, the global coliving market was valued at approximately $12.2 billion in 2023 and is projected to reach $18.5 billion by 2028, representing a compound annual growth rate (CAGR) of 8.7%. This growth is particularly concentrated in major metropolitan areas where housing costs have soared beyond the reach of many young professionals.
The appeal is clear: coliving offers an affordable entry point into expensive housing markets while simultaneously addressing the epidemic of urban loneliness that has become increasingly prevalent in modern cities. But what exactly is driving this trend, and can it sustain its momentum?
Sources: JLL Research (2023), CBRE Global Coliving Report (2024), Cushman & Wakefield Market Analysis
The Problem: Between 2010 and 2023, median rent prices in major U.S. cities increased by an average of 47%, according to Zillow Research, while median wages for young professionals rose only 22% during the same period. In cities like San Francisco, New York, and Seattle, the average one-bedroom apartment now consumes over 50% of the median millennial's take-home pay.
The Solution: Coliving spaces offer private sleeping quarters combined with shared amenities, reducing individual rent by 25-35% compared to traditional apartments. A 2024 study by Urban Land Institute found that residents in coliving arrangements saved an average of $680 per month on housing costs while gaining access to premium amenities like coworking spaces, fitness centers, and community events.
"We're seeing coliving as a necessary evolution in urban housing markets where traditional studios have become financially untenable for the majority of young professionals."
— Dr. Sarah Mitchell, Urban Housing Economist, MIT Center for Real Estate
The pandemic accelerated remote work adoption, with McKinsey Global Institute reporting that 58% of Americans now have the option to work remotely at least one day per week. This shift has fundamentally changed housing priorities for millions of workers.
Impact on Coliving: Modern coliving spaces have adapted by incorporating dedicated coworking areas, high-speed internet infrastructure, and soundproofed private rooms. According to Common, one of the largest coliving operators, 84% of their residents work remotely at least part-time, and properties with robust coworking amenities see 18% higher occupancy rates.
The U.S. Surgeon General declared loneliness a public health epidemic in 2023, citing research showing that chronic loneliness has health impacts equivalent to smoking 15 cigarettes daily. Urban environments, paradoxically, often intensify feelings of isolation despite population density.
Research from Harvard's Making Caring Common Project found that 61% of young adults (ages 18-35) report feeling seriously lonely, with rates highest in major cities. Coliving addresses this through intentional community design:
Coliving inherently promotes more sustainable living patterns. According to a 2023 study by the World Resources Institute, shared living spaces reduce per-capita resource consumption by an average of 32% compared to traditional single-occupancy apartments.
This resonates particularly with younger demographics: Deloitte's 2024 Global Millennial Survey found that 73% of millennials and Gen Z consider environmental impact when making housing decisions.
Despite predictions of urban exodus during the pandemic, cities have proven remarkably resilient. The United Nations projects that by 2050, 68% of the global population will live in urban areas, up from 55% in 2018. In the U.S., major metropolitan areas have regained and exceeded their pre-pandemic populations.
Why this matters for coliving: As more people move to cities for career opportunities, cultural amenities, and lifestyle, the demand for affordable urban housing solutions intensifies. Traditional housing development hasn't kept pace—the U.S. is currently short 4.5 million housing units according to the National Association of Realtors (2024).
Coliving provides a scalable solution that can be implemented faster than traditional apartment construction, often through adaptive reuse of existing buildings like former hotels, office buildings, or large residential properties.
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Despite impressive growth, the coliving industry faces significant obstacles that operators must navigate to achieve long-term sustainability
The Issue: Many cities classify coliving under restrictive zoning laws designed for rooming houses or dormitories, which often weren't updated since the 1970s. San Francisco, for instance, requires special permits and limits the number of unrelated adults who can live together.
Real Impact: A 2023 analysis by the Urban Institute found that regulatory restrictions have blocked or delayed 38% of proposed coliving projects in major U.S. cities over the past three years. New York City's "three unrelated persons rule" has been particularly problematic until recent reforms.
Progress Being Made:
The Challenge: Traditional real estate lenders often view coliving as higher-risk compared to conventional apartments. The operational model—with higher turnover, shared spaces, and community programming—doesn't fit neatly into existing lending categories.
The Numbers: Average interest rates for coliving development projects are 1.5-2.5% higher than comparable multifamily properties, according to CBRE's 2024 report. This increases development costs by 8-12% over the project lifecycle.
Emerging Solutions:
The Crisis: COVID-19 initially devastated the coliving sector. Occupancy rates plummeted from average 85% in Q4 2019 to just 52% by Q2 2020 as residents fled to family homes and avoided shared spaces.
The Recovery: However, the industry proved resilient. By Q4 2023, occupancy recovered to 73% average, with premium properties exceeding 90%. The pandemic forced rapid innovation:
Post-Pandemic Adaptations:
Perception Problem: Some early coliving operators prioritized growth over quality, leading to overcrowded conditions, inadequate maintenance, and poor community management. WeWork's failed residential venture and several operator bankruptcies damaged industry reputation.
The Response: Industry leaders have established higher standards. The Global Coliving Association, formed in 2022, now has 150+ member operators committed to quality benchmarks.
Quality Standards Include:
Like any emerging industry, coliving has experienced growing pains. Between 2020-2023, approximately 23% of coliving operators either shut down or were acquired, according to CoLiving Insights tracking data.
Key Lesson: Successful operators focus on sustainable unit economics, quality over quantity, and deep community engagement rather than pure real estate arbitrage.
These operators have cracked the code on sustainable coliving models, proving the concept's viability at scale
United States • Founded 2015
The Model: Common pioneered the "apartment-style" coliving approach, converting traditional apartment buildings into coliving properties. Residents have private bedrooms and share living rooms, kitchens, and community spaces. The average Common unit houses 4-7 residents.
Success Factors: Strategic focus on transit-accessible neighborhoods in high-cost cities. Professional community management with full-time community directors. Technology platform for roommate matching, maintenance requests, and community events. Partnership model with property owners rather than acquiring real estate.
Key Innovation:
Common's "Flexible Living" program allows residents to transfer between properties in different cities with just 30 days notice, appealing to remote workers and digital nomads. This feature has 25% adoption rate among residents.
Europe & Global • Founded 2017
The Model: Habyt operates across Europe, Middle East, and Asia with a tech-forward approach. They offer both shared apartments and private studios within coliving buildings, providing flexibility for different budgets and privacy preferences. Average monthly rent ranges from €450-900 depending on city and room type.
Success Factors: Strong presence in "secondary" markets (Lisbon, Prague, Budapest) where coliving concepts face less competition. Fully digital booking process—residents can secure a room in under 10 minutes online. All-inclusive pricing model (utilities, WiFi, cleaning included) simplifies decision-making.
Geographic Expansion Strategy:
Habyt targets cities with universities and tech hubs experiencing rapid growth but limited housing supply. Their Budapest property reached 95% occupancy within 60 days of opening in 2023, demonstrating strong demand in emerging markets.
Global • Founded 2014
The Hybrid Model: Selina uniquely blends hospitality with coliving, accepting both short-term guests (1-7 days) and long-term residents (1+ months). Properties include coworking spaces, wellness facilities, restaurants, and curated local experiences—functioning as both hotel and coliving space.
Target Market: Digital nomads and remote workers who want lifestyle-focused accommodations in inspiring locations (beach towns, mountain areas, cultural cities). Average resident age: 32 years old. 68% work in tech, creative, or consulting fields.
The "CoLive & Travel" Concept:
Selina's membership program allows residents to move between properties globally at standardized rates. A resident can spend January in Lisbon, February in Mexico City, and March in Bali—all through one platform. This model generated $120M in revenue in 2023, though the company faces profitability challenges due to high operational complexity.
United Kingdom • Founded 2016
The Premium Approach: The Collective operates purpose-built coliving properties with hotel-like amenities. Their flagship Old Oak property in London is the world's largest coliving building with 550 rooms. Amenities include gym, cinema, spa, restaurants, coworking floors, and rooftop terraces.
Pricing & Market Position: Rooms range from £1,100-1,800/month in London—not budget housing, but rather "affordable luxury." Target market: young professionals earning £40K+ who prioritize community, convenience, and design over space.
Performance Metrics:
| Factor | Common | Habyt | Selina | The Collective |
|---|---|---|---|---|
| Avg Monthly Cost | $900-1,400 | €450-900 | $600-1,200 | £1,100-1,800 |
| Target Stay Duration | 6-12 months | 3-12 months | 1-6 months | 12+ months |
| Primary Demographic | Working professionals | Students & early career | Digital nomads | Young professionals |
| Business Model | Management agreements | Lease arbitrage | Own & operate | Develop & own |
| Key Differentiator | City flexibility | Tech platform | Travel lifestyle | Premium amenities |
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Industry experts and market analysts project continued growth, but with significant evolution in models and markets
Shift from Conversion to Ground-Up Development: The next wave of coliving will be purpose-built rather than adapted from existing buildings. Architectural firms like MVRDV and Bjarke Ingels Group (BIG) are now designing buildings specifically for coliving.
Market Projection:
By 2028, 60% of new coliving inventory will be purpose-built vs. 20% today (Savills Research, 2024)
From General to Specialized: Future coliving will segment into specialized communities—tech professionals, artists, parents, entrepreneurs, wellness-focused, etc. This addresses one of the current model's weaknesses: sometimes incompatible roommate matching.
Examples Already Emerging:
Beyond Western Markets: The fastest growth through 2030 will occur in Asia-Pacific, Latin America, and Middle East. Cities like Mumbai, São Paulo, Dubai, and Jakarta face severe housing shortages with growing middle classes—ideal conditions for coliving.
Regional Growth Projections (2024-2030):
Smart Building & AI Community Management: Next-generation coliving will leverage IoT, AI, and automation for operations. Smart locks, energy management, predictive maintenance, and AI-powered roommate matching will become standard.
Tech Adoption Timeline:
By 2027, 80% of premium coliving properties will have full smart building integration vs. 30% today (PropTech Insights, 2024)
Total Growth: +$6.3 billion added market value • +51.6% increase over 5 years
The evidence is clear: coliving has evolved from an experimental housing concept into a legitimate, sustainable sector of the real estate industry. While challenges remain—particularly around regulation, financing, and operational complexity—the fundamental value proposition continues to resonate with its target demographics.
The three core drivers ensuring coliving's long-term viability are unlikely to diminish:
The industry's maturation is evident in improved unit economics, professional management standards, and institutional investor interest. Major REITs and pension funds now allocate capital to coliving, with firms like Blackstone and Starwood Capital exploring the sector.
Looking forward, success will favor operators who focus on:
Final Perspective
"Coliving isn't replacing traditional housing—it's filling a genuine gap in the market for people who want community, flexibility, and affordability. As the model matures and diversifies, it will become a permanent fixture in the global housing ecosystem, serving perhaps 5-10% of urban renters by 2035. That represents a significant, valuable market—just not the revolutionary overhaul some early proponents imagined."
— Real Estate Economics Quarterly, Q3 2024
Whether you're a potential resident, operator, or investor, understanding the coliving landscape is essential. Browse our resources to learn more.