New York’s Latest Co-Living Craze: Is Shared Housing the City’s Future?

The Rise of Co-Living Giants in the Big Apple

Picture this: you’re stepping into a beautifully designed apartment in Brooklyn, complete with a movie theater, rooftop deck, and work spaces that rival any Manhattan office. But here’s the twist – you’re sharing this space with strangers who might just become your closest friends. Welcome to New York’s booming co-living scene, where Outpost Club manages nearly 1 million square feet of residential real estate in New York City, housing more than 1,200 tenants across close to 40 buildings. This isn’t just about splitting rent anymore; it’s about reimagining how we live in one of the world’s most expensive cities.

The numbers tell a compelling story. In 2023, Outpost Club helped create affordable units for another 150 New York City residents, bringing the total number of their units to approximately 1,500. Starostin said he hopes to increase the number of units to 3,000 within the next three years. While other co-living companies struggled or collapsed during the pandemic, these survivors are quietly building empires one shared kitchen at a time.

Common’s Collapse Creates New Opportunities

The co-living world got a major shake-up when Common, once a darling of the venture capital world, filed for bankruptcy. While many co-living companies went out of business during the pandemic, Common was aggressively expanding its portfolio and raising funding. It acquired around 5,000 units between 2020 and 2022, and by 2023 it had raised more than $110 million in venture capital. Yet all that money couldn’t save it from the harsh realities of New York’s housing market.

Enter the scavengers. Thousands of Common’s units are going to be taken over by Outpost Club, another giant in the model that already operates around 1,500 units in 40 buildings in New York City. Sergii Starostin, the firm’s CEO, told Fortune the company had taken over management of seven properties before the bankruptcy was filed, and that Outpost was targeting 50% of Common’s inventory. It’s like watching a game of real estate musical chairs, where the survivors get to claim the best seats.

The Economics Behind the Shared Living Revolution

Let’s talk money, because that’s what this is really about. Cost: Rates range from $930 to $1,850 per room, depending on the length of stay, type of room, and availability. Rent includes utilities, wifi, keyless entry, Nest thermostats and security, as well as bi-weekly cleaning and household essentials like toilet paper, paper towels, and soap. Compare that to traditional NYC apartments where you might pay $3,000 for a studio and still have to buy your own toilet paper.

The math gets even more interesting when you consider what’s happening in the broader housing market. The citywide median asking price dropped 2.1% year-over-year, and homes entering contract had a 3.7% dip, settling at about $890,000. When the median price to buy is nearly a million dollars, suddenly paying $1,200 to live in a shared space with amenities starts looking pretty smart.

From Dorms to Adult Playgrounds

Forget everything you think you know about shared living. Great experience – this house has killer amenities [rooftop, free laundry, movie theater and downstairs work area that no one ever uses and is great for remote work]. Outpost Club is a modern platform offering student housing in NYC with discussed nuances, coworking, and coliving under one roof. These aren’t college dorms; they’re carefully curated adult communities that would make your average luxury apartment jealous.

The amenities arms race is real. While Zillow points to pet-friendliness as a non-negotiable amenity nationally, in NYC, searches for apartments with outdoor space have jumped 116.6%, while searches for pools and gyms increased 61.8% and 11.2%, respectively. And though in-unit laundry and central air will likely remain the top must-have amenities for most New Yorkers, the number of people looking for a little something extra from their building is only growing.

The Pandemic Paradox

Covid-19 should have killed co-living. After all, who wants to share a kitchen with strangers during a global pandemic? But here’s where it gets interesting: Covid did not mean the end of co-living. Faced with a slowdown, co-living companies reduced rents by as much as 30 percent to entice renters. Some made temporary pivots, like Outpost Club, which housed medical workers helping fight the pandemic in NYC. Instead of disappearing, the industry adapted, proving that necessity really is the mother of invention.

The survivors learned valuable lessons. Outpost Club’s Starostin said he believed the massive funding that fueled Common may have actually contributed to its financial troubles, as investments drove the company to expand at a rapid pace in markets like Nashville. “Venture Capital is not working very well with real estate, because we see demands to grow in like 10 or 15 different markets pretty rapidly,” Starostin said.

The Data Driving the Movement

Numbers don’t lie, and the numbers are painting a picture of a city desperate for housing solutions. Due to the city’s low vacancy rate — hitting a 60-year low of 1.4% in 2023 — new rental developments have been playing a more prominent role in the NYC market. Many of these new developments are in Brooklyn and Queens, which led the two boroughs to rapidly catch up to Manhattan in rental inventory in 2024. When vacancy rates hit historic lows, creative solutions start looking less like experiments and more like necessities.

The construction data tells an even more sobering story. The number of new building permits issued in 2024 (15,626 units) remained on par with permits issued in 2023. This number is significantly lower than the number of permits issued in 2022, when the lapse of the 421-a tax benefit drove a large spike in permitting, and is the lowest number of units permitted since 2016.

The Community Promise vs. Reality

Co-living companies love to talk about community, but what does that actually mean? Those users of communal living in New York gather in the evenings in the living room and watch movies, work together on projects, learn from each other, get out at night, and also have breakfast and dinner in the big company of friends. It sounds idyllic, but the reality can be more complex than the marketing brochures suggest.

The demographic is telling: “Millennials, newcomers, students, interns, actors, entrepreneurs, start-up founders, expats, digital nomads.” These are people in transition, looking for more than just a place to sleep. They’re seeking networks, opportunities, and yes, Instagram-worthy living spaces that make their friends back home jealous.

The Venture Capital Graveyard

The co-living industry is littered with the corpses of well-funded startups. When Quarters went down, it operated around 3,000 units and was developing 1,500 more. 2021 also saw the demise of WeLive, the co-living offshoot of WeWork, and The Collective, a U.K.-based firm that had almost 100,000 units in its portfolio when it declared bankruptcy. The pattern is clear: big money, rapid expansion, spectacular failure.

The lesson? Unlike other prominent competitors that have flamed out, Starostin told Fortune that Outpost has chosen to concentrate its operations—and plans for expansion—in New York, where the company already has established staff and marketing networks. Sometimes the tortoise really does beat the hare, especially in real estate.

The Future of Shared Living

Despite the casualties, industry insiders remain bullish. And yet despite the shutdown of Common and other competitors, Co-Living Cashflow’s Arroyave and Outpost Club’s Starostin said they believe the business model is here to stay. While it has progressed in fits and starts, the flexibility and easy access to housing at the core of the co-living idea is something that there is more than enough demand for among young renters. The fundamentals haven’t changed: New York is expensive, people are lonely, and traditional housing solutions aren’t working for everyone.

“Young people cannot afford rent, and the fundamentals of housing—in New York, in Boston, in L.A.—the numbers are not going to change dramatically anytime soon,” Arroyave said. “But for co-living to stay strong, the question is, what is the part of the business model that is not working?” The answer might be simpler than the industry wants to admit: stop trying to be everything to everyone, and focus on doing one thing really well.

The Bottom Line

So is shared housing the city’s future? The evidence suggests it’s already here, whether we call it co-living, communal housing, or just really expensive roommate situations. In recent years, coliving has become a global trend, especially in high-cost urban centers where affordable housing options are limited. As people prioritize experiences, flexibility, and social connection over material possessions, coliving provides a unique solution that caters to this evolving lifestyle.

The real question isn’t whether shared housing will survive in New York – it’s whether it can evolve beyond its current limitations. Can it serve families, not just young professionals? Can it provide true affordability, not just the illusion of it? And most importantly, can it create the communities it promises, or will it remain just another way to maximize profit from the city’s housing shortage?

Only time will tell if this co-living craze is a sustainable solution or just another bubble waiting to burst. But one thing’s for sure – in a city where a parking space costs more than most people’s rent, sharing a movie theater with strangers doesn’t sound so crazy after all.