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Starcity residents gather in one of the shared common spaces in a San Francisco building. (Starcity Photo)

Let’s play a game of “would you rather.” You can’t afford to rent an apartment in the booming city where you work. Would you rather sacrifice urban life, move to a cheaper suburb, and endure long commutes — or live in housing reminiscent of your college dorm?

Thousands of people are opting for the latter in fast-growing tech hubs.

Developers are creating a new option in cities with expensive housing markets, offering private bedrooms in shared living spaces, with amenities and group activities. The dorm comparisons are easy, but these buildings are actually upscale, regularly cleaned, and furnished with a stylish millennial aesthetic. Common CEO Brad Hargreaves shies away from the dorm analogy.

“I prefer retirement community for the young,” he joked.

But Jon Dishotsky, CEO of San Francisco-based Starcity, embraces the dorm comparison. “I’m actually generally OK with it as an analogy in the early days of our company because it truly is a new asset class,” he said. “It’s a new community. It’s a new way to live.”

A bedroom in Starcity’s residence in The Mission, a San Francisco neighborhood. (Starcity Photo).

Both Starcity and Common say their mission is to provide affordable housing for those who may not be lifted by the rising economic tide in thriving cities. They are banking on the theory that urbanites would rather be able to walk to work and access hot new restaurants than have their own kitchens. Starcity operates three buildings in San Francisco and has a waitlist of more than 9,000 for the nine projects planned for the future. Common has buildings in New York City, the Bay Area, Chicago, and Washington D.C.

“Co-living” is a novel approach to the housing affordability crisis that many cites — particularly those with thriving tech economies — are trying to solve. San Francisco’s median home value is $1.2 million. Seattle’s jumped $20,000 in one month to $777,000. For cities with rapid job growth in high-paying fields, this sticker shock is the new normal, with rents and home prices on a seemingly endless ascent.

One developer in the co-living market is already building in Seattle. WeLive — an extension of the WeWork co-working spaces that have become popular among startups — has a residence planned for Seattle’s Belltown neighborhood. Unlike Common and Starcity, WeLive resembles a more traditional apartment building with robust amenities and optional group programming. Each unit in WeLive’s existing New York and D.C. buildings has its own bathroom and kitchenette. WeLive’s Seattle development is scheduled to open in 2020.

Common CEO Brad Hargreaves. (Common Photo)

Seattle is likely to see the arrival of more co-living residences, as the city continues to grapple with many of the same housing issues as San Francisco.

“These tech hubs have really grown in cities that have very restrictive zoning that make it difficult to build new housing,” Hargreaves said. “San Francisco is the perfect example of that. We have the conflation of tech bringing a lot of highly paid jobs and the lack of new housing coming to market [that] really does create that affordability crisis.”

Seattle also has widespread single-family zoning, which makes it harder for developers to add housing to keep pace with the city’s rapidly growing population.

Apart from providing a novel way to deal with the economic realities of urban living, the social elements of these communities are a draw. Group activities, like Wednesday wine nights and weekend excursions, help residents get to know each other, which is compelling to people just moving to a city.

Starcity CEO Jon Dishotsky. (Starcity Photo)

Transplants comprise 60 percent of Starcity residents, according to Dishotsky. The average age is 33 and less than 30 percent of residents work in the tech industry.

“The entire market cows and caters to luxury and high-end so I feel very concerned about the long-term viability of a region like San Francisco Bay Area or Seattle if these underlying things that make it special — like the restaurants and the bars and the art galleries and the nightlife — all those things don’t have employees to work there,” Dishotsky said. “Those are the things that make places like San Francisco and Seattle great. I think that there needs to be more consideration for the vast majority of folks who are in this middle-income demographic.”

For somewhere between $1,400-$2,200, a Starcity resident gets a fully furnished private room, internet, bi-weekly cleaning, utilities, and a shared kitchen. Bathrooms are either shared or private, depending on how much a resident pays. That price tag doesn’t scream affordability but Dishotsky says it’s easier for a bartender or artist to wrap her head around than paying $2,420 per month, the median rent for a one-bedroom in San Francisco.

With $17 million in venture funding, Starcity plans to expand to additional cities. The company doesn’t have immediate plans for Seattle “but definitely in the future,” Dishotsky said.

Common operates under a slightly different model. Residents can rent a private room in a fully furnished, three- to six-bedroom shared apartment. Similar amenities and group activities to Starcity come with the package. Hargreaves says Common bedrooms rent for about 20 to 30 percent less than a studio in the same neighborhood. In the Bay Area’s West Oakland, rooms average $1,450 per month. Common is opening about one building each month and eyeing additional cities.

“We’re going to start with a lot of the expensive, difficult coastal markets but I think our goals are a lot bigger than that,” Hargreaves said.

A shared kitchen in Common’s ‘Minna’ building in the Bay Area. (Common Photo)

Dorm or not, this type of housing is one of the ways that life is evolving in booming cities.

“We’re all coming to terms with the fact that the white picket fence, that the suburban dream with a grass lawn and a golden retriever, that’s not necessarily what people’s American dream is anymore,” Dishotsky said. “What the overwhelming majority of people are telling us is, ‘we want access to experiences and we want access to opportunity and we want to be close to where the action is.’ That’s what is more of a dream to people.”

This story was updated to correct the number of Starcity buildings in operation.

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