At the outbreak of the pandemic, many feared COVID-19 would ravage the co-living marketplace once shelter-in-place orders around the world restricted domestic and international travel, forced universities to close, and limited all non-essential business. Several months into the pandemic, findings show that the co-living market has remained resilient.
In July, more than half of open hotel rooms were empty across the country, not including hotels that have yet and may never reopen, according to the American Housing & Lodging Association. Industry experts are predicting that occupancy rates could dip to 20%. Unlike hotels and short-term rental options like Airbnb, co-living performance remains on par with the multifamily residential market. United States initiatives such as the Paycheck Protection Program, increased unemployment insurance, and eviction moratoria have kept some renters who are not in rent-burdened households afloat. According to the National Multifamily Housing Council, 93.3 percent of apartment households paid rent (full or a portion) through July, down only two percent points compared to the previous year.
Co-living operators across the world have indicated that occupancy fell as international borders started to close. As universities around the world begin to reopen and countries begin to ease travel restrictions, occupancy rates are expected to recover. At Quarters, current renters are renewing leases and newcomers are eager to try co-living “putting Quarters on a path toward a return to normalized occupancy rates in coming months,” says Greg Gould, head of strategic partnerships at Quarters.
But, why is the co-living industry so optimistic? Simply, its adaptive housing model fills a housing void for single people between 18-to-34-years-old who are stuck in limbo by providing flexibility, value, and community. When universities closed students needed alternative housing quickly. Many returned to a family home, but some stayed in cities due to complicated travel restrictions, Visa restrictions, or job opportunities. With millions of people unemployed or under-employed, co-living provides affordable housing without surprises. For a set rent payment and flat-fee utilities, renters can have many of the amenities of luxurious renovated apartment buildings while spending at least 20% less than living alone. Also, flexible leases (some as short as three months) makes it easy for young people who are changing cities for work or school. For those that don’t want to commit to an apartment for a year, these renters won’t risk the extra expense of penalties that come with breaking a lease.
Co-living actually makes adapting to this pandemic’s best practices easier. Each renter has their own room and sometimes en-suite bathrooms which can minimize shared touchpoints. Larger co-living buildings have housekeepers that continuously help keep shared spaces clean. Co-living also offers a mental health benefit. It gives renters access to a community of people who are in this together which helps stave off feelings of loneliness and despair during this tumultuous time. For some, navigating multiple roommates is much more appealing than going through this turbulent time alone. As Scientific American notes, “Although isolation is the right response to the coronavirus pandemic, we need the exact opposite in response to the loneliness epidemic.”