The new big trends in the residential real estate sector are called co-living and cohousing. They are spreading rapidly among investors, arousing the interest of large companies and shaking the market with the advent of dedicated start-ups. Behind these two terms are a variety of socio-cultural, technological and economic factors. The trends appeared before the pandemic event and have been accelerated by it.
Access control solutions are central to such business models, which is why Sofia Locks makes a special effort to study and understand these models. A modern access control management system is mandatory in co-living and cohousing for three main reasons:
- To offer the right mix of flexibility and security that provides a perfect interaction between space and users;
- To enable accessible and manageable shared spaces;
- To create flexible spaces regardless the type of buildings, gates and spaces: the access control solution should adapt to the space and business model, not the other way around.
The origins of co-living and smart living
The drivers behind these new real estate business models can be classified into two main categories: technological innovation and social change. McKinsey published a study on the European landscape as early as June 2018 which lists causal factors such as urbanization, the sharing economy, mobility and the Internet of Things (IoT). Even then, on the one hand, it was clear that cities were becoming more crowded, families smaller and populations older. On the other hand, technology had given impetus to the sharing economy for mobility and personal services, and the real estate sector had already been on the move, with the first innovative players. Long before the flight from the offices caused by Covid19, and the search for new solutions for work and daily life, there were social housing structures integrating integrated coworking spaces.
In recent years, the concept of co-living has increasingly spread all over the world, representing a real trend. Today it has become a mature business model, and has established itself as a new standard in a rapidly changing market.
The co-living model combines the residential feature with that of hospitality, and it is based on the sharing of living spaces. It has established itself in response to the rise in rental prices across Europe in recent years, and it is especially widespread among Millennials (who are often looking for a unique space to live and work), young families, and the elderly who are looking for a sociable environment.
In some respects it is a reinterpretation of an old idea, redesigned according to new standards, which looks to new values, such as an inclusive society, cooperation and collaboration, social networks and a modern lifestyle.
Download: Coliving Report 2021
Technological innovation and the consequent new needs matured by society are pushing the real estate world to introduce important innovations in business models. Among these, in the residential sector, the co-living model is rapidly establishing itself.
The key to the success of this housing model is the ability to combine residential with aspects that are traditionally typical of the hospitality sector. People can benefit not only from private and shared spaces, but also from services, such as laundries, gyms, outdoor spaces, co-working and much more.
Furthermore, these realities see the value added service of conciergerie regaining prominence and benefiting of increasingly qualified personnel. Skills and hotel preparation are the characteristics of a new reception, able to offer both services of facility management, and customer assistance.
Therefore, living in a co-living environment means renting a single private space and sharing common spaces with other residents, but also experience services and technology integrated in those spaces. The need for technological solutions arises from the desire to innovate the real estate sector, and create new opportunities. Today the main needs are related to simplifying access to shared spaces and enabling related services.
Technological solutions for co-living
Cloud native solutions are designed to meet these needs, through dedicated Apps, residents can check the status of individual spaces and resources, and benefit from the self-service system to book certain resources or allow access to third parties in certain areas of the complex, all according to precise rules set by managers (also in real time). For example, in the presence of a smart locker, residents and authorized third parties can access a common area and open the locker with their account to collect the package at any time. The strength of these new technologies is to have made into “software” what until yesterday has been “hardware”, thus significantly reducing costs. These technological solutions are a keystone for new business models.
When it comes to co-living it is easy to imagine a short-term rental, a solution that is perfectly suited to occasional stays, but this trend has now changed. The co-living 2.0, o co-living as it is today is a long-term residential solution, a true inclusive and accessible housing option.
These solutions are now mature to be able to offer a real perception of housing, accompanied by important values such as sociability, modernity and flexibility.
Technology plays a vital role in the creation and consolidation of these environments. The constant relationship with technology, the habit of carrying out an ever-increasing number of actions through the smartphone, has fostered a demand for models smart even in the residential area. Through dedicated technology, new tenants perceive the house as a suitable place for their modern life. Above all thanks to the management of time with intelligent models and tools, so as to enhance the freedom of people, who can manage more and more aspects of their life remotely, on the move, and when they prefer.
All these aspects significantly increase the value and appeal of the new housing solutions. The real estate market is learning, driven by demand, to include services in its offerings.
The social aspect of co-living
Sociability is key in modern urban environments, as people want to create a community and share their interests and daily life with others. Through technology these aspects are encouraged: people can better organize and share their lives. For example, through the App Sofia Locks people can create events and communicate them to other residents.
Technology becomes the key to embracing a more sustainable, shared and rapidly evolving future.
Cohousing is another recent trend in the real estate market, which has taken hold in recent years. This business model is sometimes confused with that of co-living, although the differences are relevant.
Cohousing is a model based on private homes grouped around shared spaces, dedicated exclusively to residential life, and not also to hospitality such as co-living. Living in a cohousing means sharing exclusively residential spaces with people who do not belong to the same family unit, for example students or off-site workers. Each resident is equipped with traditional services and a private kitchen and has the possibility to share spaces such as large dining areas, laundry and recreational spaces, as well as outdoor ones, such as the parking lot, the garden and the courtyards.
The cohousing trend was born in Denmark around the 1960s when a group of families could not find housing and neighborhoods that met their needs, so they created a community according to their wishes. In this way, they were able to combine their private life with the common one, and decide how much to engage with the community. Today, this new business model is widespread and is expected to grow rapidly in the coming decades as people want to live more sustainably and in community with their neighbors. What these new trends have in common, namely cohousing and co-living, is the importance for the people of the community: all these models enhance the relational side. This creates a virtuous circle in the exploitation of resources, which makes it possible to offer better services at more attractive prices, and offers companies new revenue opportunities and greater predictability of the return on investment.
The main differences between co-living and cohousing
Although the two trends may seem very similar, the differences are very significant:
- Space and design: co-living areas are characterized by a large number of common spaces linked not only to the residential side, but also to the work and entertainment side, while cohousing focuses mainly on the residential field;
- Affordability: co-living contracts always offer a greater variety of formulas and services than cohousing;
- Stay: co-living is designed for defined periods of stay (which can range from a few months to a few years), while cohousing aims to provide permanent accommodation;
- Location: co-living rooms are generally located in the city center, while cohousing are often in more peripheral areas;
- Audience: co-living tend to develop very specific communities, such as that of Millennials, while cohousing is more oriented towards a large variety of people;
- Age: co-living are oriented towards Millennials, while cohousing more towards families, groups of people who share similar lifestyles, and seniors looking for active social contexts.
Social Housing is another business model based on the sharing of spaces and resources. What characterizes this solution is that the rent can be offered both by private companies and by the state. The prices are not regulated by the market, but by the supply capacity of the tenants concerned. Together with cohousing, this model involves only the residential side, and not the hospitality side.
This model has spread due to the economic crisis experienced in recent years throughout the world, to accommodate the needs of people with limited purchasing power, such as students, young couples and families with children, or elderly people with specific needs. Social housing is designed to improve people’s lives and improve cooperation between residents, who share their lives and experiences.
The peculiar characteristics of this model, the volumes, and the purpose, make social housing a particular investment. Technology plays a fundamental role here in the scalability of solutions, and in the ease of access and management of the facilities.
Download the co-living guide
Real estate is in a phase of strong transformation, the changing needs of customers, increasingly turning to flexible and mobile-first “as-a-service” offers, combined with the enabling possibilities of new technologies, have led to real estate operators to rethink the way they present themselves on the market.
Why invest in co-living
In a period of instability and difficult predictability of the return on investments, co-living represents an interesting choice for various market players (and accordingly cohousing and social housing, with their respective differences).
- Big cities are attracting more and more people, but at the same time they are hard markets, which exclude the new generations with their low purchasing power. Co-living allows you to target large segments of the market with an adequate and scalable offer.
- Technological development allows on the one hand a better management of space and resources reducing costs and optimizing operations, all in favor of investment. On the other the possibility of offering services, and therefore of activating new revenue lines.
- The intersection between these new business models and technology gives life to modern marketing models based on periodic fees, with greater predictability of returns and the future of investments.