LTC 272-2019 Co-Living Development Research for Item R5 R & R5 S OFFICE OF THE CITY MANAGER
NO. LTC# 272-2019 LETTER TO COMMISSION
TO: Mayor Dan Gelber and Members of the City C ,mmission
FROM: Jimmy L. Morales, City Manage y
DATE: May 8, 2019
SUBJECT: Co-Living Development Reseal-,I for Item R5 R & R5 S
I am pleased to provide additional information for agenda items R5R and R5S on co-living
projects as requested by the City Commission on April 10, 2019, as part of the discussion to
refer an ordinance to the planning board that proposes to adjust the density calculation
regulations for co-living units within the North Beach Town Center-Central Core (TC-C) district.
The requested additional information involved research on end users of co-living units.
Co-Living units are smaller than conventional units, as they are between 375 and 550 square
feet in size. However, co-living varies from a typical micro-unit building in that they are required
to dedicate a minimum of 20 percent of the gross floor area for amenities. This is a significantly
higher amount of amenity space than what is typically provided in a conventional building. The
amenities can include restaurants, bars, cafes, kitchens, club rooms, business center, retail,
screening rooms, fitness center, spas, gyms, pools, and pool decks. However, bars and
restaurants count no more than 50 percent of the total requirements. The goal of co-living is to
provide a lower cost, all-inclusive unit, while providing greater access to amenities and services,
and creating gathering spaces to foster a sense of community within the building.
The planning department has researched several articles and reports regarding co-living units.
This research indicates that co-living units appeal primarily to single, young professionals in their
late 20s or early 30s, who earn an average of $70,000 per year. There is a very small secondary
demographic that resides in co-living developments that consist of younger couples and older
individuals. The older demographic primarily consists of singles seeking to downsize, as a
second unit for suburban commuters that would like a dwelling in the City, and those looking for
a part-time residence near family.
The research also shows that co-living units typically have a higher per square foot rent than a
conventional unit; however, because of the smaller unit sizes, the overall rent is lower than in a
conventional unit. Tenants are most attracted to the lower rents, desired location, reduced utility
costs, and the ability to live alone.
There is an emerging trend in co-living, known as "co-living 2.0" that is intended to appeal to an
older demographic. Developers are experimenting with ways that these types of co-living units
could appeal to empty-nesters and retirees. Amenities for this demographic include curating
events and activities that cater to this community, providing more luxurious and unique units, and
trending to the larger sizes of the micro-unit spectrum.
LTC— Co-Living Development Research
Date: May 8, 2019 Page: 2 of 3
Below are excerpts from some the research that was reviewed by the planning department,
along with links to the articles:
• Urban Land Institute (ULI) Multifamily Research Committee
The Macro View on Micro Units
https://uli.orq/wp-content/uploads/ULI-Documents/MicroUnit full rev 2015.pdf
The target market audience for micro units is predominantly young professional singles.
Secondary segments include younger couples, older move-down singles, and some pied-a-
terre users. Micro-unit dwellers trend slightly more male.
• Commercial Observer
Co-Living Large: Inside the Growing Co-Living Sector
https://commercialobserver.com/2019/04/co-livinq-larqe-inside-the-growinq-co-livinq-sector/
The "private sector has spotted a gap in the market with co-living,"the report says, "aimed at
enticing young professionals with a sociable environment and lifestyle offering (such as
access to games rooms, community events, cinema, sauna and spa), all with a hassle-free
system of paying just one bill."
• Forbes
Is Co-Living the New Co-Working?
https://www.forbes.com/sites/jeffsteele/2019/02/07/is-co-living-the-new-co-
workinq/#3f1761 a6636d
It's important to acknowledge the co-living movement is almost completely confined to the
Millennial cohort. Two seemingly disparate but actually related factors account for the surge
in co-living among the Millennial generation, one economic, the other sociological, he says.
"From an economic standpoint, you're dealing with a demo that has come of age in a job
market with largely flat wage growth,"he reports. "Meanwhile, for a variety of reasons — like
zoning restrictions — housing in many popular cities is very expensive. From a sociological
perspective, Millennials are famous for prioritizing convenience and flexibility. Every person
wants to feel like they are part of a community, but only Millennials want that community
created for them, on demand, instantaneously and with no long-term commitment. Co-living
is the perfect solution. While more expensive on a per-square-foot basis, most co-living
apartments are cheaper in terms of absolute dollars, offer more flexible terms than standard
leases and provide a sense of community with absolutely no commitment."
• Realtor Magazine
`Co-Living 2.0'Reaches Beyond the Trendy Niche
https://magazine.realtor/daily-news/2019/03/26/co-livinq-20-reaches-beyond-the-trendy-niche
Co-living is being reinvented to target older and richer demographics and is now being
dubbed "co-living 2.0."Some experts call it "the next big thing in residential real estate." New
co-living arrangements are entering the market to target older demographics who desire a
strong sense of community, but also seek more living space and more privacy than micro-
spaces.
LTC— Co-Living Development Research
Date: May 8, 2019 Page: 3 of 3
• Business Insider
Millennials are paying thousands of dollars a month for maid service and instant
friends in modern 'hacker houses'
https://theclassof2020.orq/cities-talent/innovation-in-co-living/
Companies like Open Door and WeLive, a subsidiary of coworking giant We Work, have
evolved the hacker-house concept into all-inclusive experiences that comes with lots of
perks. Residents, or "members," as they're often called, can join these communities and
instantly tap into amenities like free internet, maid service, and new friends.
This research provides a good summary, based on national research, of how co-living is clearly
an emerging and sustainable form of housing. Additionally, the research shows that a compact
area like Miami Beach would be an appealing location.
JLM/SMT/TRM/RAM
C: Rafael Granado, City Clerk
F:\PLAN\$ALL\CM_RESP\2019\LTC-Co-Living Information.docx