Mar 18

Venture capitalists think millennials will pay $1,800 a month to live in adult dorm rooms

Go to any social gathering in Brooklyn, the San Francisco area, Seattle, Washington, D.C., Austin, or any number of other cities favored by young professionals, and the topic invariably turns to the skyrocketing cost of housing. Typically, you are supposed to spend about 30 percent of your income on housing, financial experts say, but the typical solo renter between 22 and 34, paying the median U.S. apartment rent, spends 53 percent of income — and in San Francisco, where the median rent is about $4,500 a month, that slice of income jumps to 78 percent, according to Zillow. Venture capitalists have one solution, The Wall Street Journal reports: “adult dorms.”

The idea is that young people moving to new cities will want a community they can simply move into, rather than scouring Craigslist for an apartment and/or roommate, and they will be willing to pay for a tiny room with shared kitchen and living spaces. That idea has attracted some pretty big money — WeWork Cos., which offers shared office space, recently secured more than $1.4 billion to kick off WeLive co-housing projects in lower Manhattan and suburban D.C. There is “insanely high consumer demand for reimagining how millennials live in urban environments,” says Jason Stoffer, a partner at a firm, Maven, backing co-living startup Common.

“The risk,” say Eliot Brown and Laura Kusisto at The Journal, “is that young workers will balk at paying the high prices the startups are counting on — upward of $1,800 a bed a month in some cases — to live in what is essentially an upscale college dorm or a retirement home for the young.” Still, price aside, it isn’t exactly a new idea. A century ago, new residents of big cities lived in boardinghouses or residential hotels. “Widening income gaps and the resurgence of the city create the market conditions for the rebirth of rooming houses,” says Alan Durning at nonprofit think tank the Sightline Institute. “The way people have afforded to live in central cities is to have less space.” Read more atThe Wall Street Journal. Peter Weber

Source: Venture capitalists think millennials will pay $1,800 a month to live in adult dorm rooms

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