Yahoo Finance Co-living has arrived in Canada amid affordability crunch
Khatija Ali, 28, was in the midst of launching her biotechnology startup when she was faced with another daunting task – finding a decent, affordable place to live in New York City.
She was new to the Big Apple, didn’t know many people, and preferred a furnished place so she could avoid lugging her furniture from her native Toronto.
Ali ended up finding a fashionably furnished, one-bedroom apartment run by Node, one of many companies around the world offering communal living – or co-living –options for renters amid a housing affordability crunch.
Co-living residences are on the rise in Canada, with more developers launching projects in cities across the country that offer furnished apartments along with various services and shared common areas.
Node, a co-living company that launched in Brooklyn, announced last month that it will be expanding into the Kitchener-Waterloo region this year. Construction of 38 apartments is scheduled to begin in the fall, with plans to begin renting to residents in early 2021.
In Toronto, Sociable Living has already opened in the Junction neighbourhood, offering all-inclusive style co-living starting at $1750 per month. Another company, Roost, offers shared housing at locations across the city, beginning at $1550 per month. In Ottawa, Dream Unlimited Corp. is developing a 24-story tower that will feature communal apartments alongside regular rentals, according to Bloomberg News.
Co-living apartments can be described as hotel-style, high-end residences that typically target millennials. Suites are often fully furnished with shared common areas, including kitchens and living room. Most usually offer weekly cleaning services, wifi and Netflix, as well as group events for residents. The only thing Ali says she had to bring to her new apartment was kitchen utensils.
“I don’t want to say it’s like dorm-style living, because that’s not true. It’s like being in an apartment building where you have like-minded individuals,” Ali said. “Node allows you to have a personal and professional life, while engaging in a co-living environment.”
Node chief executive and founder Anil Khera believes there is a “missing asset class” when it comes to real estate markets around the world that rests somewhere between student accommodation and traditional rental homes and condominiums that are often out of people’s price ranges – particularly in a city like Toronto, where rental prices are skyrocketing amid a supply crunch.
“Node was born three years ago to build a global network... that is a more cost-effective solution for customers to have more convenient, inclusive, Instagram-ready apartments at the click of a button,” Khera said in an interview.
Node initially launched in the United States, starting in Brooklyn and expanding to L.A. and Seattle. Khera said the company decided to expand to the Kitchener-Waterloo region in part because it is a key to the innovation economy, with many “high caliber” companies and institutions in the region.
“It’s a great place to incubate and test it with people who are up for innovation,” he said. “We want to have it as a springboard for the country to see if there’s anything we want to change for the Canadian market.”
‘Solve the loneliness issue’
In Toronto, Sociable Living rents start at $1750 for a one-bedroom suite within a townhouse, which is still below the July average asking price for a one-bedroom apartment in Toronto of $2,226, according to Rental.ca. While the rents might appear steep for a shared kitchen, Roman Bodnarchuk, the chief executive of N5R, the developer behind Sociable Living, says renters are able to save money by not spending on things such as furniture and services, including weekly housekeeping, high-speed internet and premium television programming.
However, Bodnarchuk argues that the advantage of co-living goes beyond the convenience of having a weekly cleaning service or never having to worry about buying household products. He says that co-living helps provide community in an increasingly digital world where mental health issues and loneliness are on the rise.
“We’ve spent all this time creating social rooms and party rooms in condo buildings, but the reality is they’re not being utilized,” Bodnarchuk said.
“We’ve created very unhappy people... my mission is to solve the loneliness issue.”
Bodnarchuk says Sociable Living will see construction finish on more than 100 units in the next 90 days and hopes to reach 1,000 units over the next year in Toronto. He’s also eyeing Miami for future expansion.
Khera believes that co-living can work not just in major cities around the world, but in smaller locations as well.
“I really think this is more about the future of urban living,” he said.
“We’re just tapping into a proven concept and reformatting it to the digital age.”
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