And so, as we humans are wont to do, many are already looking beyond generation rent; beyond the debate around the UK’s readiness for an increasing amount of renters, beyond whether tenant’s rights are sufficiently protected to reflect a lifetime of renting, and beyond how we prepare new streams of economic revenue as the demand for mortgages drops; and asking, and then what?
Today, it’s becoming increasingly clear that the answer to generation rent’s and then what? is corporate living.
What an awful name, and not one that I can imagine being widely used for very long. The more familiar and forgiving description is shared living, or co-living.
We’re seeing the rise of various models for communal living with a focus on on-site facilities and ready-made community. Demand is proving strong and developers are more than happy to oblige. Co-living is here to stay, but corporate living introduces a new aspect to the experience: work.
“Rising housing costs, traffic gridlock and a housing shortage are leading developers to create new housing innovations and mixed-use buildings where people can live and work in one location.”
So starts this Bisnow article, an analysis of Realtex’s new corporate living development in California’s South Bay area, “the first large-scale, self-sufficient, mixed-use building where people can live and work in the same building with plenty of amenities so that they won't need to leave.”
As often seems to be the case with innovation in shared experiences, be it living, working, commuting, or dating, America is leading the way.
Corporate living is being targeted squarely at tech workers because, I guess, they think tech workers are the kind of people who live inside their laptops and work around the clock. This is sometimes true, but certainly not the norm.
And so starts my rant; many thanks to the kind folks at Estate Agent Today for allowing me to do so because, personally, I think this idea of corporate living is dreadfully unappealing.
First of all, I can’t help but imagine this as the introduction of trench-living; working and bunking together on the front-lines of tech warfare, taking shifts between kipping and coding, surviving on cold baked beans and Cheerios alone.
As someone who has worked remotely, without any full-time office, for years now, I can honestly say that working and living in the same space is not something that one should aim for.
In fact, speak to anyone who works from home and they’ll tell you, more often than not you’ve got to get out of the house. Being cooped-up can drive you loopy, underwear on your head, pencils up your nose; wibble.
I don’t think it’s terribly healthy to promote this lifestyle as it can often be sedentary and result in a lack of Vitamin D.
Also, if, as this Realtex development seems to be suggesting, the idea is for colleagues from the same company to live and work together, I just can’t see that as being a good idea. You can’t choose your colleagues, so what happens if you despise each other?
It’s suggested that Google, for example, could own the master lease for the whole development and fill the place with its staff. Will it split the building into sections? Upstairs, downstairs? The director’s wing, the programmer’s quarters, middle-management mezzanines?
“The best ideas aren’t born at a conference room table. They’re born at a dinner table,” says Cody Fornari, Realtex Group CEO. Yes, I agree, but then everyone splits the bill and heads off to their own homes, where they continue their lives as free civilians.
RealTex wants us to believe that everyone lives to work. In truth, the vast majority of us work to live.
What does corporate living mean for agents?
For the property industry, this is an unusual turn. It is often said that PropTech likes to create problems and then offer solutions, in this case, I think property is doing that to itself.
Is there really a demand for corporate living, or is it something that tech workers are about to have thrust upon them?
Not since the industrial revolution has it been expected that an employer will supply housing for their staff, so why are we starting to think about doing so now? Google and Facebook are powerful enough without being given the extra financial clout of owning enormous pieces of real estate is the most valuable locations around the world.
If we keep going down that route, before too long we’ll be seeing slogans like, “Facebook, proud to be one of the world’s ten businesses”, as it takes over real estate, then takes over the rental industry, then retail, advertising, and transport. Why not immigration and law enforcement, too
For agents, I don’t see many upsides to corporate living. If Google buys the building and fills it with Google employees, where does the agent come in?
Google will simply start hiring its own in-house agents. That, or it’ll acquire one of the medium-sized firms out there and they’ll handle it all.
If this becomes the norm and we see more and more businesses start investing in residential real estate for their employees - now they’re paying their staff before taking some of it back for rent - it might mean more and more city property is taken out of the agent’s hands.
There might be a few opportunities for partnerships to be formed, and a few firms may benefit from this, but what about the rest? What do they do as an increasing amount of property becomes corporate living space?
A step too far?
For my money, corporate living is one step too far. I don’t think it will resonate with as many people as some believe.
And even if it does, it won’t appeal to them for long. Young professionals starting their careers, maybe, but what happens after a couple of years as they meet partners and start planning futures? They move-out. They don’t stop working for the company, but they don’t live in-house anymore. So who fills the vacant flat? High turnover is never a good thing.
There’s a very good chance I’m wrong. I’m nearly 40, I’m not terribly in-touch with the emerging tenant market: teenagers currently found in student accomodation.
Perhaps they’re wired differently, perhaps the idea of trench-living appeals to them, the shared learning and community creativity. They’ve watched The Social Network and they’ve watched Silicon Valley and they like what they’ve seen.
Anyone got any thoughts? I’d love to hear them. Tear my argument to shreds, if you like.
It’s incredibly early days for corporate living, so I’m happy to receive a schooling if it teaches me more about this emerging industry.
*James Dearsley is a leading PropTech influencer and commentator. You can follow him on Twitter here.