Cohousing is an old model; you can trace the history of unrelated individuals living together back to the Middle Ages and, more recently, connect it with the communes of the 1960s and 70s. Today, though, cohousing has taken on a new relevance for millennials struggling to make it in a tough economy.
Underpaid and buried in student debt, young people in their 20s and 30s are opting to live in dorm-style housing units, creating community while simultaneously developing a more affordable and sustainable housing model.
Where do these young people find such unusual arrangements? Though some cohousing communities live in new construction or in separate but neighboring structures, many build community in large rented houses where they live as roommates. As a landlord, however, you need to consider whether you’re ready to take on this unique tenancy plan.
In premise, cohousing is a great idea, particularly for millennials who are marrying later and less likely to own their own homes. Further, real estate prices are such that many are forced to choose between living in a cramped studio and sharing an apartment with several roommates. Creating an intentional community provides meaning to an otherwise financially necessary situation.
Cohousing communities are also sites of great creativity and entrepreneurship. In tech-heavy areas, including Houston, young people gather in hacker houses where they live communally with others in their field such as start-up employees, web designers, and coders. By minimizing amenities, such as private rooms, these homes are able to provide internet, recreation space, and even maid service at an affordable price while living with like-minded people.
As a landlord, permitting tenants to have roommates can be risky business. Under traditional circumstances, roommate requests often mean that your tenant is in dire financial straits. That’s not a good sign for you as a landlord because they may fall behind on rent or utilities. It’s also unusual for people to request to bring in roommates after renting a property.
Of course, with cohousing communities, potential tenants often seek to rent together from the start, but because they don’t share financial liabilities like a married couple would, and because there may be a significant number of people involved, it can be difficult to determine whether they’re good rental candidates. You’ll need to be more aggressive in screening each individual tenant before signing any agreements.
Many landlords are also cautious about renting to younger tenants because of the risk of property damage. Though millennials are not mostly in their later 20s and early 30s, anyone living on their own for the first time is more likely to make maintenance mistakes. Large groups of young people living together are also more likely to be noisy, host large social events, and be disruptive to neighbors.
As cohousing becomes more popular, landlords should develop clear guidelines regarding whether or not they permit such tenancy arrangements. Some opt to do this by restricting the number of unrelated individuals sharing a home. Many areas already have legal restrictions on home sharing without special permits; Houston is no exception. The city has specific rules regarding rooming houses with more than 16 tenants, SROs, and similar arrangements, which would likely be the minimum requirements for a cohousing-style rental.
Landlords may also choose to restrict cohousing tenants to one individual per bedroom to prevent tenants from creating overcrowded conditions and require additional inspections of such units. Tenants should be discouraged from advertising for roommates and instead should recruit roommates from their social circles. Communities thrive on referrals and previous relationships, not random additions.
Of course, with the right set of tenants, cohousing can be beneficial to a landlord. For example, the total rent obtained from responsible cohousing tenants is often higher than it would be renting to a single individual or family in the same space. Cohousing is also ideal for landlords who’ve purchased and rehabbed older properties that are too large for individual habitation.
Some landlords have been cultivating an alternative to cohousing for many years, in the form of housing developments and even apartment complexes. While it would be unacceptable to screen tenants based on a narrow set of interests or values, many communities of this sort cultivate a shared ethos and community guidelines, share recreational space such as a clubhouse, pool, and gym, and even attend events together onsite. Simply put, there are many ways of bringing people together.
Apartment complexes and developments may not be as sustainable or communal as a single shared residence, but for groups that want to live and work together, organize events, or otherwise remain in close contact, it’s a close second.
Finally, landlords should be aware that it’s not just millennials who are seeking out cohousing arrangements. Many retirement-age individuals are also looking for alternatives to traditional retirement homes and have found cohousing to be a viable alternative. It allows them to remain engaged in a community, stay active, and avoid downsizing. And since seniors are more likely to experience the negative effects of isolation as they age, cohousing can also support better health and well-being. While seniors are very different from millennials as tenants, many of the same regulatory issues apply.
If you’re a landlord considering opening your doors to cohousing tenants, you’ll need significant support to make sure everything is running smoothly; that’s why you need a property management team. At Green Residential, we’re your eyes on the ground and your tenants’ constant point of contact.
Green Residential has been serving the Greater Houston Area for over 30 years and can provide a full range of property management services, no matter the size of your holdings. Whether you need help staging and listing your properties, handling the finances, or screening tenants, we’re here for you. Plus, with 24/7 support for tenant emergencies, you know your properties are always in good hands.
For more information on how Green Residential can simplify your role as a landlord, contact us today. Cohousing is about community, but as a landlord, you need a collaborative team as well.
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