Co-living: Could it be the future of home ownership?
This article was originally published in French. Click here to read the original version.
At the time of the Covid-19 health crisis, it is no surprise that quarantine measures and the emphasis on social distancing have hit the cohabitation sector, and more specifically coliving, hard. As the pandemic wreaks havoc in major urban centres where cohabitation is important, notably New York, Paris and London, it certainly raises questions about the value of living in close quarters.
Coliving, a form of shared accommodation with a strong service dimension, is emerging in a context of scarcity and high property prices: people are finding it increasingly difficult to find housing. It also corresponds to a transformation of the structure of households and their residential paths. The family model is changing - separations, divorces, new unions and blended families - and this creates as many variations in the configuration of the ideal home. The evolution of living habits and the desynchronisation of work rhythms also leads to new needs in terms of property (insee figures). Finally, the phenomena of isolation and the individualisation of the population are leading to a change in rental demand towards more collective forms of living. In this context of transformation of the temporality and modalities of occupation of housing, the serviced economy of property proposed by coliving seems to provide appropriate responses.
We will soon no longer be selling square metres but a subscription to a "housing service".
Coliving, a response to the needs of an era?
Coliving, halfway between hotel services and traditional shared accommodation, meets these needs for accessibility, flexibility, services and community living. The operators of this new type of rental offer do not only sell products but a solution including the product, access and associated services. This is what is known as "servitisation", an anglicism born of "servitization". The development of this service culture in real estate is transforming all forms of access to housing - both rental and ownership. Everything seems to indicate that we will soon no longer be selling square metres but a subscription, as if we were renting a "housing service". While paying a fixed monthly fee, which will include the use of the property, colivers will contract additional services in the form of subscriptions, in the same way that they subscribe to Netflix.
Coliving is part of the long history of hygienic housing policies.
Today, a majority of real estate operations in France and abroad, under the pretext of a "user experience" or "community link", are rushing into the breach opened by coliving. In Marseille, the operator Axis, both investor, developer and manager of the The Babel Community, is offering a completely renovated residence combining private and collective spaces: furnished rooms for shared or individual use, ranging from studios to two rooms, with a range of services (concierge, group sports classes, film club, room service, coworking space rental, catering, etc.). Monthly rental offers are based on flexible leases and no commitment.
Coliving, an old story?
Although coliving is enjoying a certain success today, these forms of living are far from new. By integrating various infrastructures and services to promote the well-being and good health of the occupants, they are part of the long history of hygienic policies in housing, whether social or working class. The Royal Saltworks (Saline Royale) of Arc-et-Senans, built by the architect Claude-Nicolas Ledoux during the reign of King Louis XV, is a good example. This salt factory operated as an integrated factory. Built in the shape of an arc, it housed both the production areas and the living quarters for all the workers. Each inhabitant was answerable to the clerks, the name of the administration responsible for collecting the salt tax, the gabelle, the royal indirect tax on salt.
With its emphasis on community living, coliving was also inspired by the ideas of utopian socialists, such as the industrialist Jean-Baptiste André Godin and his familistère de Guise. Based on the principles of cooperation between workers, the familistère is a real cooperative of production and life. Several families live together and share many infrastructures and services - shops, schools, theatres, baths, etc.
In the competitive context of calls for projects, the service proposals are multiplied, with a great deal of marketing.
Coliving, great promises...not kept?
The way coliving is developing today reveals a contradiction with the needs it was initially intended to meet.
Where it promised a focus on users and needs, we are seeing an overbidding of services and programming. The competitive context of calls for projects, such as "Inventons la Métropole du Grand Paris 2", encourages a distortion between the proposals made and the real needs in terms of housing and living. Between shared office spaces, hacker houses, makerspaces, urban farming, fablabs and other third places, service proposals are multiplying, with a great deal of marketing (1). Behind this service overkill, we can also discern a new form of paternalism against individual and collective emancipation. Borrowed from the Latin servitium ("slavery", "yoke", "servility") and servus ("slave") and servire ("to be enslaved"), the etymology of the word "service" clearly includes the idea of subjection to a superior will.
Coliving is above all the intermingling of young people who get along and co-opt each other.
Where it proposed another way of living, more collective and communal, coliving actually conveys a very consumerist and individualistic vision of living. This economy of functionality, transposed to housing, produces interchangeable and generalised consumption. It is a way of "buying a life" (2), thus giving a volatile and ephemeral dimension to all areas of life in society, what Zygmunt Bauman called liquid modernity. So much so that a journalist from the Guardian described these homes as "cynical corporate dormitories". Coliving thus seems to contribute to a loss of meaning in living, but also to a reduction in social ties. For coliving today is mainly a matter of "entre-soi": young people who look alike and coopt each other (3).
Finally, while it promised to be a response to the housing crisis and the new needs of households, today's coliving seems to exploit the interstices instead. The programmatic content of coliving is taking shape in a context of high and scarce building land, which makes the calculation of profitability paramount. If the rise in the price of land leads to a rise in the price of real estate (4), several coliving real estate operators have clearly understood that their entire cash flow must be generated by service activities, hence the importance of establishing the most marketable service promotion possible.
Coliving and its servicing overhang are on the rise in Europe and worldwide, but with significant differences in market maturity between jurisdictions. This business model is in high demand in a low or even negative interest rate environment and is attracting a lot of interest from investment professionals. All are taking a close interest in this resilient asset class.
Is this a sign of property law reform?
The fact remains that this model of living corresponds to a new concept of ownership where use takes precedence over property. Here again, this principle is not new. It can be found in Roman law with emphyseusis: a real right of enjoyment conferred on property belonging to someone else in return for the payment of a periodic fee, the canon. (5)
By transforming de facto situations into de jure situations, it will always be possible to invent different forms of ownership.
Today, these ideas are again making their way into public debate. On 20 November 2019, the Haute-Garonne MP Jean-Luc Lagleize submitted a report to the government proposing the creation of a new property right based on the dissociation between land and buildings. This report has raised many questions and the current Minister for Urban Affairs and Housing, Julien Denormandie, says he is "in the observation phase".
At the same time, forms of collective ownership, based on self-management principles, are emerging. Ultimately, it would seem that these new conceptions of ownership will not emanate from either the administration or the companies. In an institutional environment that struggles to experiment, whose procedures are paralysing and create forms of ownership 'from above' (6), the new forms of ownership will be invented 'from below'. In the image of this pilot project of shared ownership in Villeurbanne, the vertical village, which made it possible to influence the ALUR law. By transforming de facto situations into de jure situations, it will always be possible to invent different forms of ownership.
1. The majority of the 23 IMGP2 winning projects integrate mixed programming that questions new ways of living and working. In particular, 15,000m² are planned exclusively for coliving.
2. Title of Zygmunt Bauman's book "S'acheter une vie" published in October 2008.
3. Critical analysis by Monique Eleb collected by Emmanuel Poncet: https://www.lexpress.fr/styles/le-coliving-c-est-l-entre-soi-de-jeunes-qui-se-cooptent-et-qui-ont-de-l-argent-m-eleb_2108366.html
4. S. Levasseur,2013. "Elements of reflection on land and its contribution to property prices" n°128, published in the OFCE journal.
5. Halpérin, JL. 2008. Histoire du droit des biens, Publisher: Economica.
6. The bill of 20/11/2019 adopted at the National Assembly in first reading, by MP Jean-Luc Lagleize, is a perfect example.