Dorm-style Housing — Coming to a City Near You

When Americans hear the word “co-living” or “dorms,” they typically think of college campuses and projects that are managed by universities. But the model is slowly becoming more common in the private housing market. Some projects target students who want to live off-campus, but others target a broader clientele of the working and professional classes. There is reason to think that, regulatory hurdles aside, America will see more dorm-style projects, which offer cheaper rents at a time when people are being priced out of more standard housing.

I define “dorm housing” as that which houses large numbers of people who use shared spaces (including, sometimes, shared rooms). For students, off-campus dorms would be a welcome trend. Colleges charge significant markups for on-campus housing—on average student costs for room and board are $11,950 for state schools and $13,620 at private schools. Research by HUD found that thousands of students are homeless. Additionally, schools often have waitlists: at the University of California-Santa Barbara it is over 1,000 students. 

The most notable off-campus dorm may be one in Orlando. The “Creative Village” project incorporated dorm-style housing into a large mixed-use complex, targeted at University of Central Florida students. Each room accommodates two residents. Prior to opening, the developer said units would cost $690 a month (or over $300 cheaper than the average monthly room and board for public college students). As of June 2020, the dorms had 600 occupants.

What is interesting about Creative Village is the potential for housing near employment centers to spur job creation for students. A Florida Trend Magazine article notes that video game developer Electronic Arts, which typically recruits UCF students, opened offices in the Creative Village complex. This is part of a broader trend towards establishing employment and research hubs near state colleges.

But the development of co-living facilities is not limited to near college campuses. A firm called Common has adopted the model in a variety of markets, from New York to St. Paul. It operates 6,400 units (some of which are conventional apartments), which don’t strictly mimic the most austere dorms, where students share sleeping areas, but have private rooms and shared living rooms and kitchens. While Common hit a rough patch during the pandemic, it has since recovered and acquired a rival firm, San Francisco-based Starcity, which itself had 7,500 units operating or in the pipeline.

A Belgian firm, Cohabs, is moving into the New York City market, intending to spend millions to acquire buildings for up to 30 units of co-living space. Other brands include one that is literally called Coliving, while another one geared towards seniors is called Better Coliving. Other firms, such as German-based Quarters, went bankrupt despite an aggressive expansion attempt into the United States.

Cushman and Wakefield finds that while the genre has struggled through the pandemic, the long-term outlook seems to be good, as “coliving assets continued to maintain a 23.2% rent per square foot (psf) premium over the average of Class A studio rents PSF in comparable markets as of Q3 2020.”     

If there is a threat to dorm-style housing, aside from the fact that it’s a relatively non-traditional format, it is burdensome regulation. In the past, co-living arrangements known as single room occupancies (SRO) were widespread, but strict regulations cropped up in most cities due to concerns about transience and criminal activity. Similar arguments are made today to ban Airbnbs and enforce “minimum standards” that outlaw certain lot sizes, unit sizes, and construction standards. 

But college students are already accustomed to living in dorms, and if the market trends are any indication, many older people are too. Activists and politicians who want greater housing affordability should champion this format.  

This article featured additional reporting from Market Urbanism Report content staffer Ethan Finlan.