In a city with a chronic shortage of college dorms and a housing affordability crisis, private for-profit developers are preparing to fill the void. 

Boston’s growing pipeline of co-living projects will include multi-bedroom units with common kitchens, staffed with full-time managers and providing low-maintenance living, including furnished units and housekeeping service. Part hotel, part adult dorm, part apartment complex, they typically have shared living rooms while leasing individual bedrooms. 

Some developers, like London-based Scape, target a student population, while others will appeal to a wider mix of tenants. But all have a similar pitch to prospective residents: lower monthly rents than comparable class A apartments, with a more robust community amenities and social programming as a tradeoff for their smaller individual living quarters. 

More Amenities, But Higher Returns 

In Allston, Boston-based developers Boylston Properties and ARX Urban are partnering on the neighborhood’s first proposed co-living project at 525 Lincoln St. The development plan calls for 10 studio apartments and 70 co-living units, including eight three-bedroom units and 62 four-bedroom suites. 

The project would be the first in Boston operated by Common Living Inc., a New York-based co-living operator that’s on a rapid growth trajectory. 

“When we toured their other sites, it was apparent they had figured out how to drive and create a true community as well as how to operate these buildings,” said Benjamin Moll, founder and principal of ARX Urban. “It’s kind of a hybrid between multifamily and hospitality, and they’ve figured out how to remove the friction between folks having roommates.” 

Housekeeping service heads off arguments about whose turn it is to do the dishes. And Common Living helps organize activities ranging from running clubs to brunch tours to foster social activity. 

Common Allbright, a proposed co-living complex at 525 Lincoln St. in Allston, is the first New England project for Common Living Inc., a New York startup that’s negotiating to manage 1,000 individually-leased units. Image courtesy of Boylston Properties and ARX Urban

The average age of residents at Common Living properties is 29, and units are filled on a first-come-first-serve basis, senior director of East Coast real estate Brian Lee said in an email. Individual rents are positioned 15 percent lower than a comparable studio, which translates into Boston rents in the $1,600 to $2,000 range, Lee said. Members are subject to financial and background checks. 

Common Living is negotiating agreements for another 1,000 beds in New England, Lee said. 

For developers, the co-living model offers potentially higher returns than traditional multifamily housing. According to a sample pro forma from Common Living, its projects can deliver net operating income that’s 23 percent higher than a traditional apartment complex. The calculations estimate gross rental revenues that are 41 percent higher than an apartment building, while land and development costs are only 3 percent more. 

Competing Business Models  

In an industry still in its infancy, several business models are competing for a share of the market. 

Scape USA acquires, develops and operates its properties, including 24-7 on-site management by full-time employees. The company has acquired two sites in the Fenway, in the initial stages of an announced $1 billion local pipeline. Along with its ground lease for 1270 Boylston St., it paid $39 million in April for two parcels at 2-6 Charlesgate West and 1161 Boylston St. No plans have been submitted yet for the second property. 

Common Living operates more like a hotel management company, signing long-term management contracts with developers with a fee-based structure and performance incentives. 

Common Living has opened 28 buildings nationwide and signed agreements for another 102 properties since its founding in 2015. The company has received over $63 million in venture capital funding since 2015, according to Crunchbase. 

And others, such as Medici Living Group’s Quarters brand, sign master lease agreements for blocks of apartments in buildings owned by other developers, similar to the short-term corporate housing model. Quarters is looking for sites in the region including South Boston and Somerville, General Manager Mark Smith said recently. 

sample layout of a typical co-living unit at a complex managed by Common Living Inc. Image courtesy of Common Living Inc.

Uncharted Zoning Waters 

Scape’s proposal for a large co-living tower on Boylston Street in the Fenway – and its recent acquisition of potential sites near Fenway Park and in Somerville’s Davis Square – has rekindled a debate over displacement of families by student renters. The neighborhood’s zoning forbids off-campus dormitories, and Boston Planning and Development Agency planners have asked Scape to incorporate units for older, working households along with college-affiliated residents. 

That points to the murky treatment of a new housing category not anticipated in Boston’s zoning code, said Matthew Kiefer, a real estate attorney at Goulston & Storrs. 

Steve Adams

“Most of the code definitions were written in the 1950s and 1960s, and none of them really capture what co-living is all about,” Kiefer said. “The world is changing and it’s a housing model that isn’t really addressed by zoning.” 

The BPDA last year enacted a two-year compact living pilot program that includes provisions for co-livingstyle developments including shared common areas such as living rooms and kitchens. 

But as the pushback in the Fenway to Scape’s proposal illustrates, developers need to reach out to the neighborhood aggressively to explain a relatively unknown concept and how they plan to enforce community rules. 

“People are concerned they are going to have greater impacts than a regular apartment complex would,” Kiefer said. “The reputable companies in this space don’t want them to turn into an Animal House any more than the neighbors do.” 

Experimental Housing Expands Footprint in Boston

by Steve Adams time to read: 4 min
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