Coliving is reshaping urban living by aligning with ESG (Environmental, Social, and Governance) principles.
Here's how:
- Environmental Benefits: Residents in coliving spaces use 30% less energy, 20% less water, and produce 23% less waste compared to traditional housing. Eco-friendly construction, smart technologies, and waste-reduction practices further enhance sustainability.
- Social Impact: Coliving fosters inclusive communities with 90–95% occupancy rates. It supports mental well-being, reduces loneliness, and provides affordable housing options, often at half the cost of traditional rentals.
- Governance Practices: Transparent pricing, resident input in decision-making, and ethical management ensure trust and efficiency. Digital tools simplify operations and improve safety.
Why it matters: With 68% of the global population expected to live in cities by 2050, coliving offers a scalable solution to urban challenges by promoting resource efficiency, affordability, and community connection.
Coliving blends ecological care, affordability, and social connection, making it a key player in the future of urban housing.
Environmental Impact of Coliving
This section explores how coliving spaces can achieve measurable environmental improvements. A prime example is The Collective Old Oak in London, which boasts a BREEAM "Excellent" certification. Let’s break down how resource sharing, eco-friendly construction, smart technologies, and waste management contribute to these outcomes.
Reduced Resource Consumption
Shared amenities in coliving spaces help cut down on unnecessary energy use. According to the Urban Land Institute, coliving residents use about 20% less electricity compared to those in traditional apartments. Similarly, Common properties achieve notable water savings by using efficient fixtures and shared facilities.
Eco-Friendly Construction
Coliving developments often rely on sustainable construction techniques to minimize their environmental footprint. These include:
- Using mass timber to lower carbon emissions.
- Incorporating recycled materials to reduce the demand for new resources.
- Applying low-VOC finishes to improve indoor air quality.
- Adding green roofs, which double as community gardens and improve insulation.
Green roofs also enhance urban biodiversity while providing residents with functional outdoor spaces.
Smart Technology Integration
Technology plays a big role in reducing energy waste. For instance, WeLive's Wall Street location reported a 20% reduction in energy costs during its first year. AI-driven thermostats, which adjust based on occupancy, further cut energy waste by about 15%.
Efficient Waste Management
The Collective Canary Wharf has partnered with Too Good To Go to tackle food waste in the community. On-site composting systems reduce organic waste by 40%, and shared resources help minimize packaging and overconsumption. Resident-led initiatives also help lower energy use by an additional 3-5%.
These efforts highlight how coliving spaces are reshaping urban living by combining sustainability with a high quality of life for residents.
Community Benefits
Coliving is changing the way people live in cities by creating connected communities. Beyond its eco-friendly aspects, it also brings people from different backgrounds together.
Mixed Communities
The Collective in London welcomes residents from over 50 nationalities, ranging in age from 21 to over 60. This setup encourages cultural exchange and opens up new perspectives.
In the U.S., Common collaborates with local organizations to set aside housing for individuals transitioning out of homelessness. This makes city living more accessible for people from various socioeconomic backgrounds.
Social Health
Coliving also supports mental well-being. Thoughtfully designed spaces and community programs help residents feel connected:
These interactions not only improve residents' social lives but also make coliving an appealing living option.
Cost-Effective Housing
Coliving is often more affordable than traditional rentals. For instance, in New York City, a studio apartment averages $2,800 per month, while a coliving room costs about $1,500, with utilities included. In London, The Collective offers all-inclusive living starting at £1,100 per month, compared to £1,450 for a basic one-bedroom flat without utilities or furniture.
Other perks of coliving include:
- Flexible lease options
- Low security deposits
- Utilities and services included
- Fully furnished spaces
- Access to shared amenities
Management Standards
Coliving plays a key role in supporting ESG goals, with ethical and efficient management practices driving its social and governance advantages.
Clear Management Policies
Coliving operators are reshaping rental models by prioritizing transparency. For example, The Collective shares annual impact reports and uses an all-inclusive pricing model that clearly outlines all costs.
By combining transparent pricing with community-driven decision-making, coliving operators are also building trust through strong security measures.
Resident Protection
Gravity ensures safety with 24/7 surveillance, biometric entry systems, and thorough background checks for both residents and staff. They also run safety workshops and emergency drills to keep the community prepared.
Node addresses conflicts quickly with a tiered dispute resolution system led by trained community managers, ensuring a harmonious living experience.
These safety measures are supported by digital tools that simplify operations and improve service quality.
Digital Management Tools
Habyt uses an in-house platform to make lease management and resident interactions seamless. AI-powered tools handle tasks like applicant screening and exit surveys, enhancing communication and service efficiency.
Additionally, IoT sensors track resource usage in real time, helping operators cut waste, optimize energy use, and improve overall resident comfort.
Investment Potential
Coliving has become a magnet for investors, thanks to its strong focus on operational resilience and efficient management. This sector, valued at $7.5 billion in 2022, is expected to grow to $13.9 billion by 2030, with an impressive annual growth rate of 8.1%.
Market Trends
Investor interest in coliving is surging, with 79% of institutional investors planning to increase their stakes in the next five years. Here's how coliving compares to traditional rentals based on key metrics:
Take The Collective Old Oak in London as an example. It boasts a 98% occupancy rate and yields 8% higher than the local market average. Its BREEAM "Excellent" sustainability rating further highlights the ESG appeal of coliving. These figures illustrate the financial promise of this investment model.
ESG Returns
Coliving offers a blend of environmental, social, and financial benefits. For instance, Common, a top operator in New York, shares:
"Our properties use 30% less energy per resident compared to traditional apartments while maintaining an average occupancy rate of 97%. We've achieved 30% higher NOI compared to traditional multifamily properties in the same areas."
In Europe, the sector is growing rapidly. DoveVivo, which manages over 10,000 rooms, secured €50 million in funding from DWS in 2022 and aims to double its portfolio by 2025. The European coliving market, worth €2.8 billion in 2021, is projected to skyrocket to €25 billion by 2025.
Coliving's resilience was especially evident during the COVID-19 pandemic. For example, Quarters in Berlin maintained a 95% occupancy rate while cutting energy consumption by 20% through smart home technology. This combination of steady performance, sustainable practices, and community-driven benefits solidifies coliving as a standout option for ESG-conscious investors.
So is coliving really ESG?
Coliving shows how shared housing can address modern urban challenges while promoting resource efficiency and fostering a sense of community. It’s reshaping the way we think about living in cities.
Take The Social Hub, for example - it’s aiming for full circularity by 2030, setting a high standard for environmentally conscious operations. On the social side, operators like The Collective have reported that 87% of their residents feel a stronger connection to their community after moving in. Add to that the role of smart building tools like those from Latch, which improve both efficiency and the resident experience.
With increasing investments and supportive regulations in cities like New York and London, coliving is gaining momentum. Its mix of eco-conscious practices, community focus, and transparent management is redefining urban living for the better.
