An urban housing trend that has been growing for a while is now hitting prime time: “co-living,” a nice way of saying “dorms for adults living in major cities.” This is what housing policy failure in a free market looks like.
The original version of The American Dream was “if you work hard, you can buy your own home.” As cities grew more crowded and expensive, that was downgraded to “if you work hard, you can buy your own apartment.” Then, “if you work hard, you can buy your own apartment in a poverty-stricken neighborhood.” Then, “if you work hard, you can rent your own apartment.” Then, “if you work hard, you can rent an apartment with a roommate.” And now, “if you work hard, you can rent a tiny room in a big dorm with dozens of other professionals for a price that in any rational world would get you your own damn apartment.”
The Wall Street Journal reports that “co-living,” a concept that has been trotted out in expensive cities in recent years, is now successful enough to be tried on a larger scale. In the most expensive cities in America. A 750-unit building in San Jose, the heart of Silicon Valley; a 270-unit building in San Francisco; a 500-unit building in Brooklyn. A small bedroom and access to shared living spaces will run you a mere... “$1,600 to $3,100 a month.” The business model works.
And why does it work? It does not work because young professionals yearn to prolong their college living experience indefinitely. It does not work because renters value good times with new friends in shared spaces. It works because—particularly in these desirable, booming cities—there is an affordable housing crisis. Adults who would certainly prefer to live in their own apartments are forced to live in dorms. And why is there an affordable housing crisis? Because, for decades, our cities have failed to build enough housing to keep up with growing demand, even as money and residents poured in, which has sent rent prices higher and higher. And what is the root cause of the failure of these cities to build enough housing to meet demand and keep housing costs affordable? The root cause is a lack of political will to do so by the existing homeowner class, who not only fail to prioritize affordable housing as a political issue, but also throw up political and regulatory barriers to policies that would allow enough new housing construction to start to close the gap.
Wealthy people have nice places to live and it is nicer for them if there’s not too much new stuff built in their neighborhoods. Therefore rents go up. Therefore you’re 30 years old, with a professional job, living in a fucking dorm.