New Yorkers face record-high apartment rents even as Covid-19’s long aftermath has emptied a lot of office space – by some estimates, approaching 20 percent of the city’s stock – threatening to drain it, and the neighborhoods where it stands, of economic value and vitality. Can lemonade be made from these lemons? The 5BORO Institute believes something called “flexible co-living” might be part of the answer. We asked its executive director, Grace Rauh, to explain.

Urban Matters: At the outset, can you give us a quick definition of what flexible co-living is and what it entails?

Grace Rauh: Flexible co-living is a new housing model that 5BORO has proposed to help ease barriers to housing development and provide a viable path to make office-to-residential conversions easier, faster, and most importantly, more affordable. Converting offices to housing can be complex and expensive, but our model aims to ease design and layout restrictions to maximize housing production and affordability.

Essentially, our approach would allow New Yorkers to rent individual bedrooms and use shared kitchens, living rooms, and bathrooms in office-to-residential conversions, creating up to double the number of units compared to office conversions to traditional apartments. Perhaps its greatest selling point is that co-living units have the potential to rent for far less than a studio or one-bedroom apartment.

UM: But Grace, retrofitting office space for residential use always seems like a great idea – until you look at the design complications and sky-high costs involved. How does your proposal address those problems?

Rauh: You are absolutely correct. Office buildings have layouts, configurations, and regulatory requirements that are vastly different from those in residential buildings, and our current housing codes were not designed for buildings like these. As a result, office-to-residential conversions in New York City can carry price tags in the billions of dollars, contributing to luxury rents for these units.

For example, current regulations strictly require exterior windows in bedrooms, living rooms, kitchens, and dining rooms. Complying is very challenging for office buildings, which typically have deeper footprints with much more interior space than apartment buildings.

However, regulations in places like Philadelphia and Washington, D.C. have much more flexibility, and these cities massively outpace us on office-to-residential conversions. Our proposal calls for New York to adopt the window standards we see there. and allow for interior windows, which bring in “borrowed” natural light from an adjacent room with exterior windows [as pictured above].

UM: When you talk about maximizing affordability, what do you mean exactly? Are these market rate units or subsidized for low-income tenants?

Rauh: An analysis by the Furman Center at New York University found that the break-even rent necessary to develop a small housing unit with shared common facilities like kitchens and bathrooms would be 40 percent lower than the break-even rent to develop a small studio apartment. On average across the nation, co-living provides a 30 percent discount to renters compared to traditional apartments. Much deeper affordability could be achieved through government subsidies or other incentives.

UM: Office-to-residential conversion is a high-profile element of Mayor Eric Adams’s “City of Yes” housing rezoning plan, slated to begin a public hearing process soon. How does flexible co-living mesh with what the mayor has in mind?

Rauh: We were thrilled that the City of Yes proposal aims to update the City Zoning Resolution to make it easier to build more housing, including easing some of the outdated rules that have blocked underutilized commercial buildings from converting to housing.

There are a few additional restrictions that inhibit aspects of our model not covered by the City of Yes initiative, and there are other City regulations that currently inhibit the use of communal spaces as required for co-living. We’d like to see the city champion flexible co-living – spurring innovation and maximizing housing production and affordability. We need to pilot this housing model so that we can glean best practices, test the market, and better assess the affordability it can achieve for renters.

UM: I get why this could be affordable and attractive to single, young renters. But I also keep imagining shared living squabbles about noise, privacy, and moldy leftovers in the fridge. Am I wrong?

Rauh: Co-living definitely requires a different approach to building operations, and typically entails more active management, but let’s remember that there are plenty of tenants navigating their own informal co-living arrangements already. Existing co-living operators around the world have adopted a range of approaches to mitigate conflicts, such as offering cleaning services or establishing community check-ins.

There is also no one-size-fits-all for co-living. In our report, we model two different styles of co-living within the same office footprint. One resembles a college dorm, while the other is a “suite” style layout that includes a series of three- to six-bedroom apartments that individual tenants would share. (See design illustrations below.)

We know that co-living is becoming more and more popular. One analysis found that the number of co-living units on the market nationwide went from 100 in 2014 to nearly 8,000 in mid-2020 — an 80-fold increase over six years, with demand significantly outpacing supply.

This type of housing could really appeal to the roughly 40 percent of adult renters in NYC who are living with roommates and sharing multi-bedroom apartments, which are ideal for families. It could reduce competition for multi-bedroom apartments, helping free them up for the families and groups that need them.

UM: As a longtime top TV journalist, this one should be right in your wheelhouse: In two minutes or less, what’s the case for giving flexible co-living the pilot project tryout your report urges?

Rauh: We are facing a housing shortage and unaffordability crisis that is threatening the vibrancy, diversity, and culture of our city. Exorbitant housing contributes to half of working households struggling to afford to live here. It’s insane to me that New Yorkers have fewer housing choices today compared to the 1950s and 60s, when young people and newcomers could rent an affordable room by the week or month. As we face an affordability crisis that threatens the future of our city, now is the time to be bold, to innovate, and to test out new approaches to housing.

As cities across the country struggle to turn around languishing office districts, New York has an opportunity to lead the way out of the so-called “doom loop” with flexible co-living. It is absolutely a win-win, and we hope to see the City take action

Grace Rauh is the executive director of the 5BORO Institute. For more than a decade she covered local, state, and national politics as an on-air reporter for New York1 News.

Illustrations by: 5BORO Institute.

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