All Tech Considered
12:04 am
Thu December 19, 2013

Bay Area's Steep Housing Costs Spark Return To Communal Living

Originally published on Thu December 19, 2013 9:08 am

This week, we're exploring the San Francisco Bay Area and the way income inequality is affecting the region. Check out the other pieces of the week, aggregated on this page.

It's no secret rents have skyrocketed in the San Francisco Bay Area, fueled by tight housing stock and the latest tech boom. But some young professionals have turned the situation into an opportunity with a return to communal living, or "co-living," as it's now called.

"It's absolutely a modern commune, but we prefer the term co-living," Derek Dunfield says, as he tours a 7,500-square-foot San Francisco Edwardian mansion he shares with a dozen others. "I think what it really is is an example of what the sharing economy can actually do."

He lives in this space with other professionals in their late 20s and early 30s. The housemates include an architect, a tech entrepreneur and someone who works in the mayor's office. They all work during the day, but at least once a week, they come together to cook a huge meal together for one another and any guests who want to show up. They share groceries, household responsibilities and decision-making in who gets to move in, should a spot become available.

"We live here, but we also host events. We have hackathons, and we have salons, and we have concerts," says Jessy Schingler, a co-founder of the house.

She says co-living creates economies of scale, but, more importantly, it creates community.

There's an emphasis on creating connections among people who live in the homes with big family-style dinners and amenities like huge outdoor vegetable gardens, basement bowling alleys and music rooms. And keeping the order isn't a hassle as long as everyone abides by the one sacred rule: no dishes get left in the sink.

The San Francisco Chronicle reports that about a dozen mansions in the Bay Area are currently leased to groups of young entrepreneurs and run as communal living spaces. Schingler puts the total co-living count even higher, saying there are about 50 of these big group living arrangements in and around the Bay Area, in which 10 or more unrelated folks move in together in grand estates.

It makes economic sense. Census numbers show San Franciscans pay the highest rent in the country. Median rent for a two-bedroom apartment there is $3,200 per month, but if you snag a spot in a co-living house, you can pay about half that.

"San Francisco is way too hot right now," says David Sobel, the chief executive officer of the San Francisco Housing Development Corp., a nonprofit that advocates for affordable housing options in the city. "You need to be a millionaire really to buy a home at the median home price nowadays. That does not bode well for an overall diverse and healthy city, which is one of the great traditions of San Francisco."

Sobel says the rise of communal living cuts two ways. He likes that young professionals have found ways to make city-dwelling possible, because cities need income diversity, and young people shouldn't be forced to commute hours to get to work. But when mansions get scooped up quickly, it does have an impact on the market.

"Individuals and families who are looking to purchase or rent those same resources are going to have more competition to do so. So ultimately I think there needs to be a balance between those two forces," Sobel says.

Plenty of the co-living folks feel the same way. That's why they're expanding to other parts of the Bay Area, like Berkeley — just east of San Francisco. There, two business school grads — Jay Standish and Ben Provan — head up a smaller co-living house. While all of this does cut costs and promotes sustainability (they grow their own food and share cars), the co-founders say co-living is more than just random roommates coming together. They are trying to build communities of passionate young people where they didn't exist before. And that's made easier thanks to tech-powered social networking.

"In some ways, this is the millennial generation's take on how to live together. Maybe we say social networking, but that's actually just community or a tribe or a village," Standish says.

Technology brought them together, but they realize this kind of lifestyle dates to the beginning of civilization.

"It's definitely a case of going back to the future," Provan says.

Now, the founders of the San Francisco house and this Berkeley home have organized themselves into a startup real estate business. Their 3-month-old company, Open Door Development Group, is now enticing investors to help it buy a few big homes for co-living.

They were once strangers. Online networks made them friends, and living together makes them more like family. After dinner, in keeping with the one rule of giant co-living houses, someone will do all of the dishes.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

DAVID GREENE, HOST:

We're spending some time this week in the Bay Area of California. Our tech reporting team is exploring its place in American culture and the economy. This is a part of the country where rents have been skyrocketing, fueled by tight housing stock and the latest tech boom. NPR's Elise Hu found some young professionals who've turned the situation into an opportunity.

(SOUNDBITE OF CHOPPING)

ELISE HU, BYLINE: In this crowded kitchen of a huge San Francisco house, sweet potato peanut soup is on the stove, and someone's marinating steak for later.

UNIDENTIFIED MAN: Garlic, olive oil.

HU: No fewer than nine people take part in this organized chaos of cooking, and it happens here at least twice a week.

JESSY SCHINGLER: Food is a core component of what we do, and I think it's something that is a really easy way to unite people in a really low pressure kind of environment.

HU: Jessy Schingler - a former NASA engineer - lives in this house with a dozen other professionals with different jobs. They include an architect, a tech entrepreneur and someone who works in the mayor's office. Schingler says this kind of kitchen commotion creates community, so long as everyone abides by the one sacred rule: No dishes get left in the sink. It's part of keeping order when you live with so many friends.

SCHINGLER: We live here, but we also host events. We have hackathons and we have salons and we have concerts.

HU: She estimates there are now about 50 of these big group living arrangements in and around the Bay Area, where 10 or more unrelated folks move in together in grand estates. They share groceries, some meals and cars. Just be careful about calling this a commune.

DEREK DUNFIELD: It is certainly a way to say it, but there's a whole bunch of negative things that come out of that word.

HU: That's Derek Dunfield, a behavioral economist and a housemate here.

DUNFIELD: Yes. It's absolutely a modern commune. We prefer the term co-living. I think what it really is, is an example of what the sharing economy can actually do.

HU: He's lived in this 7,500-square-foot place since the group moved in a year and a half ago.

DUNFIELD: We found this place on Craig's List. It's an old Edwardian mansion, three stories.

HU: The common areas feature large living and dining spaces...

(SOUNDBITE OF MUSIC)

HU: ...even a music room and...

(SOUNDBITE OF A THUMP AND ROLLING)

HU: ...an early 1900s bowling alley in the basement.

(SOUNDBITE OF PINS CRASHING)

HU: In addition to fun, they get some economies of scale by sharing. Census numbers show San Franciscans pay the highest rent in the country, prices driven by the latest tech boom and a maxed-out market. Median rent for a two-bedroom apartment here is $3,200. But co-livers can pay half that.

DAVID SOBEL: San Francisco is way too hot right now.

HU: David Sobel heads the San Francisco Housing Development Corporation, a non-profit that advocates for affordable housing options in the city.

SOBEL: You need to be a millionaire, really, to buy a home at the median home price nowadays. That does not bode well for an overall diverse and healthy city, which is one of the great traditions of San Francisco.

HU: Sobel says he likes that young professionals have found ways to make city dwelling possible, because cities do need income diversity. But when mansions get scooped up quickly, it does make an impact on the market.

SOBEL: So that individuals and families that are looking to purchase or rent those same resources are going to have even more competition to do so. Ultimately, I think there needs to be a balance between those two forces.

HU: Plenty of the co-living folks feel the same way. That's why they're expanding to other parts of Bay Area, like Berkeley, just east of San Francisco.

(SOUNDBITE OF A CREAKING GATE)

HU: Here, two business school grads head up a smaller co-living house.

JAY STANDISH: Welcome.

HU: They say it's more than just random roommates coming together. Instead, co-founder Jay Standish says co-living is a way that online connections are turning into offline communities.

STANDISH: In some ways, this is the millennial generation's take on how to live together. Maybe we say social networking, but that's actually just community, or a tribe or a village.

HU: Technology brought them together, but they realize this kind of lifestyle dates to the beginning of civilization.

Co-founder Ben Provan.

BEN PROVAN: It's definitely a case of going back to the future. One of the differences that I think distinguishes it is we now have tools and technologies that allow us to organize in better and different ways.

HU: Now the founders of the San Francisco house and this Berkeley home have organized themselves into a startup real estate business. They're now enticing investors to help them buy some big homes.

(SOUNDBITE OF CAMERA SHUTTERS)

HU: On this morning, the guys are checking out a building for sale in Berkeley, not far from a BART public transit station. The place has a retail storefront on the first level, and residential above

PROVAN: Couple of bay windows. It says, on the top, 1904. That means it was just before the earthquake. There's potential.

(SOUNDBITE OF CROWD CHATTER)

HU: Back in the rented mansion in San Francisco, dinner's served.

(LAUGHTER)

HU: About 20 people - housemates and some guests - sit around a table, lit by an antique chandelier.

UNIDENTIFIED WOMAN: Soup on.

UNIDENTIFIED MAN: Oh, yeah.

HU: They were once strangers. Online networks made them friends, and living together makes them more like family. After dinner, in keeping with the one rule of this giant house, someone will do all the dishes.

Elise Hu, NPR News. Transcript provided by NPR, Copyright NPR.