Airbnb founders Brian Chesky and Joe Gebbia started their company in desperation: Unable to scrape together the rent on their San Francisco loft, they started renting out their living room. Chesky loves to tell this story, apparently as a kind of illustration of his grit. But as San Francisco’s median rent tops the country’s median household income, it has started to sound more like a warning.
From Craigslist to Airbnb, the Bay Area’s secondary housing rental market appears to be booming along with just about everything else. But these aren’t just vacation homes or roommate ads: These are dedicated businesses managing shared home rentals across Silicon Valley, with rates much higher than their surrounding neighborhoods. This isn’t the start-up castle, but in some ways it’s much worse—and often more expensive. It’s a particular kind of legally ambiguous late-bubble business, awash in a collectivist, “sharing economy” aesthetic and the comfy trappings of on-demand, full-stack living.
In their Berkeley property, a bunk bed in a shared room runs $1,386 per month.
Communal living never actually died in the Bay Area, though. The rent has always been high, and the historic homes have always been large. Sharing space has always been one way for young, idealistic people to save money while trying to make it in the big city, so long as they don’t mind waiting for the bathroom.
Hacker houses and techie cooperatives have flourished here for the last two decades by way of the ad-hoc community networks that have always existed in cities. Now new pressure on the housing market has created opportunities for companies that claim to re-invent “co-living,” with centralized ownership and profit models.
Goldrock Ventures manages five properties in Palo Alto and San Francisco, where tenants are “guests” paying between $1,200 and $1,500 per month for shared rooms. Open Door owns and manages multiple “co-living” houses, one of which is devoted to “studying the sharing economy.” In its Berkeley property, a bunk bed in a shared room runs $1,386 per month. Tech House rents bunks for $980 in rooms shared with up to three other people. These rents are all much higher than comparable nearby house-shares listed on Craigslist, but come with the kind of perks you might see at a start-up office: free coffee, foosball, and Wi-Fi.
It’s a testament to the empty but lasting rhetoric of “the sharing economy” that anyone is buying into this.
Co-housing was originally intended to create community through collective ownership and decision making. Collectives don’t have bosses or landlords—their express aim is to share resources and save costs among the group. Modern “co-working” and “co-living” arrangements may look like high-tech hippie houses, but they don’t subvert traditional ownership. The selling points for a tech commune are “free” laundry and entrepreneurial vibes, not group decision making, cost transparency, and accountability. Tech communes are about chilling with bros in a hella culture-fitted environment with a pantry full of carbonated mate, not about creating collective power by subverting traditional ownership models.
No matter how many times these companies say they love “diversity” and want to “fight gentrification,” they don’t signal a beautiful, socially just urban future—they’re a sign of a sick housing market. These kinds of arrangements often target the most new and naive residents, or only temporary tenants. While increasing housing density across the Bay Area could do much to relieve pressure on the market, that density probably shouldn’t look like as many adults as possible crammed into child-size bunk beds.
No matter how many times these companies say they love “diversity” and want to “fight gentrification,” they don’t signal a beautiful, socially just urban future—they’re a sign of a sick housing market.
State and municipal rent control laws that make it easier for tenants to hold on to cheap bedrooms in shared apartments were written with some of these kinds of market “disruptions” in mind: When master tenants, either collectives or individuals, sublease to tenants, it’s illegal to charge extra high rates while enjoying the profits for themselves. When companies own these properties, they can institute whatever total rental costs they might desire—and when collectives convert multi-unit buildings into single-family “collective” homes, they deprive residents of most rent control protections.
Boosters often point to Airbnb as one way for people to offset their rising home costs, but the Bay Area has come a long way since Brian Chesky and Joe Gebbia started their living room rental business only eight years ago. In May, a report from San Francisco’s budget analyst found that nearly one quarter of the city’s total vacant housing units were listed on Airbnb, undoubtedly placing more pressure on the city’s housing stock.
The sharing economy has been very successful in selling false scarcity as collective empowerment, but the Bay Area is still home to some true economic disruptions that are far more in the “co-living spirit” than for-profit co-living.
Co-housing communities where tenants actually get a say in rules and rates are somewhat few and far between, but hardly unheard of—there are more than a dozen in the Bay Area, including a new one in Mountain View, and the first San Francisco and San Jose co-housing projects are currently forming. Community land trusts in San Francisco, Berkeley, and Oakland fundamentally disrupt the traditional landlord-tenant model: By buying and taking housing off the speculative market, they remove the incentive to keep raising rents in order to make the most profit. Some of these properties, like San Francisco’s “Merry-Go-Round House,” have developed the kind of authentic and vibrant community that secondary housing start-ups can only dream of.
True cooperative living is to carpooling as “co-living” is to Uber. The actual sharing economy has much, much more to offer than luxury-priced bunk beds.
The Crooked Valley is an illustrated series exploring the systems of privilege and inequality that perpetuate tech's culture of bad ideas.