Microgeographies of assetisation: Realising value of households and residents in co-living housing

Abstract

Financialised capitalism’s proclivity for assets helps explain growing investment into new housing asset-classes, including co-living, Build-to-Rent and Purpose-Built Student Housing. To date, research has focused on institutional and financial settings driving the assetisation of property. Less common is research into the microgeographies of assetisation. In this paper, we contribute to research on the microgeographies of assetisation by examining how households and their inhabitants are actively reworked within co-living housing. Our analysis identifies how households are rendered more investable and profitable, demonstrating how assetisation processes can exceed the bounds of real estate property as an arena of value. Assetisation is intimately navigated in microgeographic sites, with implications for residents’ housing security and domestic experiences. Our analysis draws on research conducted between 2016 and 2022 that charted the emergence, maturation and transformation of the co-living sector in New York City, San Francisco and Australia. The paper identifies the three key practices through which co-living providers realise value from households and residents: (1) Running an asset-light business model, allowing profit from property outside the risks of ownership. (2) Rescripting residents as subscribed members rather than legal tenants. (3) Curating household forms, delivering experiences through hospitality-like services and capitalising on the residents as community members to generate maximum profit. This work supports economic and housing geographers to go beyond conceptualisations of financialisation as a ‘monolithic and inevitable process’, shining a light on microgeographic sites, actors and practices holding up wider financial ideologies.

Introduction

Decades of political-economic restructuring has motivated the financialisation and increasing assetisation of property (Aalbers, 2016; Fields, 2022). Property assetisation involves transforming ‘otherwise illiquid property into a revenue-generating resource with recurring income streams’ (Wu et al., 2020: 1484). Housing real estate is a key arena for assetisation, provoking a proliferation of new housing asset-classes. Key amongst these is: Build-to-Rent, Purpose-Built Student Housing, Short-Term Rental Accommodation, serviced apartments and co-living – the focus of this paper. Co-living is for-profit, privately managed and delivered shared housing that represents a corporate response to the housing/workspace needs of single urban professionals (Bergan et al., 2023; Bergan et al., 2021). Co-living is typically priced above market rent, offering flexible subscription-style housing and services. Co-living crept into the mainstream real estate lexicon for developers and investors as part of the post-Global Financial Crisis (GFC) ‘gold-rush’ towards short-term housing (Bergan & Dufty-Jones, 2023). For co-living specifically, institutional investors saw opportunities to profit from: the oversupply of vacant downtown office spaces; technologically enabled dispersion of work from traditional worksites; the rise of precarious work and its related hypermobility for knowledge economy labourers; and the popularity of Space-as-a-Service (SPaaS) real estate sector (Bergan & Dufty-Jones, 2023). When our research commenced in 2016, the co-living ‘industry’ in the United States and Australia was approximately 20 organisations; these businesses were largely start-ups which had operated for less than 12 months. We were attracted to researching co-living due to the velocity of the industries expansion fuelled by the record-breaking investments it was receiving (Bergan et al., 2023; Casier, 2023). In 2023, co-living is a billion-dollar industry with countless operating businesses (Casier, 2023). Co-living has recently been pitched as one of the most resilient real estate asset classes during times of market turbulence – such as the COVID-19 pandemic (Bergan & Dufty-Jones, 2023; Casier, 2023; Schlesinger, 2022).

To date, research emphasis has been on the macroeconomic changes enabling property assetisation. The market conditions, financial instruments, systems and settings that render property liquid and investable – alongside the motivations for investing in housing assets – are well established in the work of political economists and economic geographers (Aalbers et al., 2020, 2021; Adkins et al., 2021; Langley, 2021). However, less is known about how housing assetisation is advanced and experienced at the house and household scale. Our work extends a nascent but growing body of research concerned with the microgeographies of assetisation within the intimate spaces of everyday life (Dorignon and Wiesel, 2022; Fields, 2018, 2022; Horton, 2021). Recent work begins to unpack housing-scale practices that support and sustain assetisation across a series of defined housing sectors and tenures. These include the role of digital technologies in the private rental sector (Fields, 2022), building design in aged care (Horton, 2021) and the growing importance of service provision, in a trend sometimes described as the hotelisation of housing to capture the growing provision of hotel-like offerings within residential housing (cf. Horton, 2021 on aged-care homes; and Dorignon and Wiesel, 2022 on upmarket serviced apartments). Research has also begun to explore the consequences of housing assetisation for resident households. The challenges and frictions experienced by ‘unwilling’ residents (cf. Fields, 2017) of assetised housing, including housing insecurity and domicide, the destruction of home, have been a strong focus (Fields, 2017; Horton, 2021). Research examining the microgeographies of housing assetisation reveals that assetisation is not a one-size-fits-all process; rather, it is a relational, contingent and messy process that is advanced in different ways in different contexts. It is, as Fields (2017: 589) argues, ‘a fragmented and incomplete project, rather than a top-down and hegemonic one’. A common touchpoint, however, is the GFC and the subsequent deployment of practices intended to ameliorate the risks of illiquid real estate. In this paper, we extend understanding of these practices, bringing attention to the household (rather than housing per se) as a growing site of assetisation.

Our contribution is in identifying how households and their inhabitants are being actively reimagined and reworked as part of the broader process of assetising property. Co-living housing, the focus of our work in this paper, reaches beyond practices aimed at realising the value of real estate property, to practices that realise the value of residents, household forms, experiences and domestic relationships. This is a new contribution to research on property assetisation. Co-living housing is a rapidly growing multibillion-dollar asset-class where young professionals are charged above-market rent to live in small, shared living spaces (Bergan et al., 2023). In this sector, residents are assets, with new domestic cultures and relations created and supported by co-living businesses to smooth the frictions of small domestic spaces and high rents. Specifically, we show how assetisation is advanced through subscription models, reimagined domestic spaces and hotel-like experiences, within an asset-light model that enables investors to maximise rent while minimising exposure to illiquid real estate. What we describe is a sector working to lubricate the frictions between assetisation and domesticity (cf. Fields, 2018; Horton, 2021), actively rescripting household practices by incorporating cultures of hospitality rather than domesticity into housing (Sandoval-Strausz, 2007), while also reworking the legal and temporal relations of tenancy in ways that maximise profit. Together these practices realise the value of household practices and residents. The household and its inhabitants become the central arena for extracting value, rather than only the physical real estate the household sits upon.

Outline

The paper is structured as follows. First we review housing assetisation literatures, linking new housing asset-classes to financialised capitalism and overviewing literature on the microgeographies of housing assetisation. The latter, which draws out the practices and consequences of assetisation within the spaces of everyday life, is the starting point for this paper. We then present our analysis of housing assetisation within co-living households. We draw on a series of semi-structured interviews with co-living providers in New York, San Francisco and Australia conducted in 2018–2019. Our findings explore how co-living providers advance and negotiate assetisation through household practices and residents. The findings reveal providers realise value from households and residents in three keyways: (1) Running an asset-light business model, allowing profit from property outside the risks of ownership. (2) Rescripting residents as subscribed members rather than legal tenants. (3) Curating household forms, delivering experiences through hospitality-like services and capitalising on residents as community members to generate maximum profit.

Housing assetisation and new housing asset-classes

Housing studies first began to grapple with assetisation during the GFC, a period that witnessed a rapid growth of assets and asset-backed financial strategies in global housing markets (Fields, 2018; Fields and Uffer, 2016). The desire for investable housing capable of new revenue streams and supporting longer commercial relationships with consumers has continued to grow since that time and is connected with a phenomenal rise in new housing asset classes (Birch and Ward, 2022). Residential real estate markets have become ‘prime sources for the ongoing supply of assets on which financial capital depends to create new income streams’ (Fields, 2017: 588).

Research on housing assetisation has often operated at a macro-economic level, identifying the financial logics and settings that sustain assetisation. In this work, housing property is treated as an object of financialisation, a material form that is transformed into an asset via financial techniques and instruments that operate externally to the house itself. Credit ratings and mortgage-backed securitisation have been identified as significant drivers, transforming housing from spatially fixed ‘bricks and mortar’ to exchangeable, liquid products (Gotham, 2009). Aalbers (2016), Gotham (2009) and Langley (2006, 2021) address the securitisation of mortgages and how this is embedded within financial systems and policies, while Wu et al. (2020) point to how homeownership policies in China facilitate the assetisation of housing by encouraging the conversion of household savings into housing consumption and investment.

This paper is allied with a growing body of research that seeks to go beyond macroeconomic settings to unpack the microgeographies of housing assetisation. Fields (2018, 2022) has been at the forefront of this work, bringing a performative understanding of markets (Berndt and Boeckler, 2012; Çalışkan and Callon, 2009) to develop knowledge of the ‘microgeographical’ processes of market formation’ (Fields, 2018: 120). Although markets often appear as an omnipotent and inevitable force, in practice they are made up of ‘bundle[s] of practices (structured spatial and temporal manifolds of action) and material arrangements (assemblages of material objects, persons, artifacts, organisms, and things)’ that are stabilised through a range of observable, mundane and everyday places and practices (Berndt and Boeckler, 2012: 209).

Research uncovering the microgeographies of assetisation identifies assetisation as a practice that is negotiated at the scale of the house and the household. A central focus of research has been the housing-scale practices that enable and sustain assetisation, including digital technologies (Fields, 2018), building design and service provision (Dorignon and Wiesel, 2022; Horton, 2021, 2022). Fields (2022) work on the automated landlord was one of the first papers in this space when it was published online in 2019. The paper (Fields, 2022: 162) identifies the importance of extending beyond market explanations of assetisation, foregrounding the role of digital technologies that automate landlord work and identifying these as active participants in the ‘ongoing, dynamic process of financial accumulation strategies’. In the spatially dispersed US post-GFC private rental sector, these technologies support the automation of property acquisition, management and surveillance of property repairs and staff, and shifting responsibilities of landlords onto residents. These practices see a logistics mindset imported to the housing sector, affording ‘the circulation of commodities, promoting flow and motion in an effort to eliminate any profit-impeding friction’ (Fields, 2022: 168).

Another strategy identified in research has been the growing trend of hotel-like housing assets, including the ‘hotelization of long-term rental homes’ (Chen et al., 2022; Dorignon and Wiesel, 2022; Nethercote, 2020: 867), Short-Term Rental Accommodation (Katsinas, 2021) and aged-care homes (Aveline-Dubach, 2022; Horton, 2021). Horton (2021: 188) describes the new hotel-like assets as ‘liquid spaces . . . designed for [imagined] liquid populations, which are transient and able to pay higher rates that can generally be charged on a longer-term basis’. ¹ These asset classes offer rental housing with extensive amenities to middle and high-income households (Dorignon and Wiesel, 2022). Hotel-like offerings extend from building design to additional services (Aveline-Dubach, 2022; Chen et al., 2022; Dorignon and Wiesel, 2022; Horton, 2021; Nethercote, 2020). Horton’s (2021) work in the UKs aged care sector identifies two key benefits for investors: first, hotel-like design enables the physical asset to be repurposed as a hotel if the aged-care sector proves unprofitable, while the provision of hotel-like services enables higher rents and therefore greater profit, super-charging the financial performance of an erstwhile fixed asset. Co-living housing, the focus of this paper, is allied with this trend, offering hotel-like housing spaces to hypermobile urban workers.

A second focus of research is examining the implications of assetisation for household residents. Financialisation shapes subjectivities at the domestic scale (Fields, 2017; Langley, 2007). This work identifies residents as subjects whose dwelling experiences and senses of home are frequently negatively shaped by the assetisation of the dwellings that they inhabit. Fields (2018: 592), for instance, draws out how ‘predatory equity investments [in the private rental sector in New York] represent precarity and alienation both at the scale of individual relationships with home’ and within the city, ‘further fray[ing] the already tenuous claims the working poor have upon place in New York. . .’. Tenants in this context are depicted as unwilling subjects of financialisation, ‘almost incidental to a process taking place without their knowledge or consent’ – a process that leads to housing precarity that undoes and contradicts ‘the very ontology of home’ (Fields, 2018: 592). Horton (2021) similarly identifies the interconnection between financialisation and domicide, ‘[t]he deliberate destruction of home that causes suffering to its inhabitants’ (Porteous and Smith, 2001: ix cited in Horton, 2021). This domicide is a consequence of the ‘growing mismatch . . . between [the] supply of “liquid homes” and resident’s illiquid demand for situated care relationships and personalized home environments’ (Aveline-Dubach, 2022: 988).

In this paper we extend understanding of the microgeographies of housing assetisation via analysis of co-living housing. Our contribution identifies the household as frontier of assetisation, with resident households and domestic practice assertively reimagined and reworked in order to extract higher ongoing profit from housing. The resident population served by co-living is distinct from those described by Fields (2022), Horton (2021) and Aveline-Dubach (2022), being highly mobile and with higher incomes that bring greater housing choice, including some capacity to move away from undesirable offerings. Consequently, the sector must actively market and seek tenant buy-in across all aspects of the offering, reflecting what Sandoval-Strausz (2007: 960), in their account of hospitality as an alternate to domesticity in housing delivery, describes as the growing need to ‘capture’ ‘the flow of people’ in a period ‘of unprecedented transience in which human beings are almost as mobile as goods and money’. While there are some parallels with the higher quality buildings and services offered in BtR apartments, the co-living sector is unique in reimagining and reworking household form, practices, relations and the inhabitants themselves – rendering housing as calculable and investable via changing household practice. The remainder of the paper reports on our methodological approach and empirical findings.

Methodology

Our analysis is based upon a series of six semi-structured qualitative interviews conducted by Tegan in mid-2018 to early 2019 with co-living industry stakeholders. These interviews were conducted as part of a wider investigation into co-living conducted between 2016 and 2022 in NYC, San Francisco and Australia. Our study has charted the industries emergence, maturation and evolution during the COVID-19 pandemic. Two distinct thematic content of the websites, blogs and digital marketing materials of co-living housing businesses conducted in 2017–2018 (Bergan, 2021), and 2020 (Bergan et al., 2023). The results from these analyses, in addition to an interpretative policy analysis (Bergan et al., 2023), helped contextualise and confirm the validity of the interview findings.

While the number of interviews is small, the sample size reflects the qualitative research design, the size of the sector at the time of fieldwork and challenges in recruitment during fieldwork. While not an initial aim given the qualitative research design, the study was incidentally representative. The sector has only operated since 2016, and was still nascent in 2018. Fieldwork was completed when the industry was comprised of a small but growing number of operators (with approximately 20 co-living dwellings in total operating across all case study cities). To support anonymity we refer to Participants in this paper as P1–P6.

The initial intent was to interview both residents and providers. Before heading into the field, 20 individuals working, investing, managing or establishing co-living organisations (identified through Google and the directory website coliving.com) agreed to participate themselves and some agreed to facilitate contact with their tenants. In the field organisations began rescinding their willingness to partake in the study. Several high-profile media articles and Reddit subthreads had depicted co-living spaces as frivolous dorms for millennials who did not want to clean their own dishes (Blau, 2018), and pointed out the high access fees (Howe, 2018). Debates on Reddit from former tenants attracted attention for their open criticisms of safety, cost and service quality (cf. Housing search: Experiences with Medici Living?, 2019; Medici living ignores maintenance issues!, 2019). This attention led to industry insiders becoming risk-averse. Some organisations noted they had trusted journalists or bloggers, allowing them to stay in the dwellings and interview residents. Providers then had to repair the public relations impact of subsequent negative articles, or assure residents their privacy was not at risk of being compromised in media articles. Providers started refusing or rescinding access to tenants and the study necessarily pivoted to recruiting people working in the spaces.

To build trust with the sector Tegan spent a few months in the field – attending industry and social events to build rapport. By the time interviews were conducted the interviewer (Tegan) and participants were largely familiar with one another, the interviews were relaxed and conversational. The interviews were conducted with co-living industry stakeholders – including house managers, investors and owners/operators. All participants were currently employed by, a contracted consultant of, or operating, a co-living business. Most also lived in a co-living residence. Due to newness of the industry, none had worked in co-living more than 2 years. Many had entrepreneurial backgrounds – several had worked in tech start-ups, and a few had experience operating coworking spaces. The participants were located in New York or San Francisco, USA or Australia at the time of the fieldwork. Research ethics required that information pertaining to the characteristics of participants were redacted to de-identify them, recognising that there were only a small number of individuals working in co-living during the fieldwork collection period.

Interviews were semi-structured, with questions designed to scope the nature of the sector, how it had emerged, what the purpose of their service was, what was included in the service and whom they were targeting as tenants. Interviews were up to 2 hours in length. They generally started with questions around how the interviewee got into the co-living sector and the origin story of the co-living business they worked for. The interviews then turned to discussing their business model and what they offered prospective tenants, before moving to discuss day-to-day practices in running a co-living business. For interviewees that also lived inside a co-living residence Tegan would ask about their personal experiences living in the spaces. Interviewing industry stakeholders provided a unique lens to the study given the previous content analyses of web-based marketing materials. Baker and McGuirk (2017: 434) employed qualitative interviews to probe housing policy makers to provide ‘detailed and defamiliarized accounts of practice’. Qualitative interviews provided us a similar opportunity to invite industry stakeholders to ‘step beyond seamless narratives of intention. . .and presuppositions of their field’ (Baker and McGuirk, 2017: 434). Interviews were an opportunity to explore what practices and discourses sat underneath the very intentional and curated narrative marketed to prospective members.

Interviews were audio-recorded and professionally transcribed. Thematic coding was used to derive critical themes. During interviews, the idea of being a service provider, a desire to be considered their own ‘asset-class’ and assertions that co-living is a ‘totally’ different thing to other real estate products and a unique asset-class was emphasised by several participants. Angel investors ² would often attend networking events and make the point that the sector was a desirable investment because of the low risk and high yield – unlike other real estate investments. The emphasis on services, the importance of their unique value-proposition, and differences from other real estate models became the focus of analysis. When immersed in the dataset, it became clear that subscription-style membership model, the household forms, hospitality-like services and experiences, and resident communities were frequently referred to by the participants as the strategies they would use to both distinguish their product from other real estate assets, and key strategies to realise value. The initial coding framework was broad – framed around spaces, services, resident characteristics, comparisons to traditional housing and tenancy conditions, reflecting concepts emphasised by participants during interviews. Codes were then refined while immersed in the data set to unpack the detail of how these concepts were discussed by participants. The interviews were coded three times, first by hand and then using NVivo. Audio of the interviews was also listened to several times to ensure accuracy in capturing the tone of conversations. We have kept the quotes in long-form where possible, and prefaced quotes with context or the tenor of the conversation to accurately capture the interview. Analysis in the following section is structured around: the asset-light business model, the subscription-style membership-model of tenancy and the strategies used to generate a high-value and high-profit housing product.

Assetisation processes in co-living

In this paper, we extend research on the microgeographies of housing assetisation by examining how co-living households are actively reimagined and reworked as part of the broader process of property assetisation. Our analysis looks at how households and residents are rendered investable and profitable. The remainder of the paper brings focus to these practices that allow co-living providers to realise value from households and residents. We start by exploring the asset-light business model, then examine how tenants are reworked into ‘members’ through subscription models and digital apps. We then look at the specific strategies enrolled to rescript household forms, services and domestic relationships to generate a profit and appeal to their membership base. These sections and sub-sections are direct translations from the coding process described above.

Asset-light asset classes

Co-living providers focus on appropriating control of spaces via master leases rather than purchasing and building property (cf. Chen et al., 2022 on asset-light rental models in China). There are two key sets of investors involved in the co-living businesses we spoke to: those investing directly in the co-living business, and housing investors whose properties are leased by the co-living business. ³ P1 explains the pitch to co-living sector investors:

a way to ease the fear is an explanation of the profitability and stability of it, right. So, if we rent a place for five years, which is longer than the average tenant, we get a discount on the yearly or monthly amount. We’re paying less per month than someone who would rent for one year, right. But then we in turn, rent out to people who are staying for less than a year, which in turn gives a higher percentage - which is in turn you’re paying more per month including services and all that stuff. So that’s basically the model right there; that’s where the margin of profitability is made and stability particularly.

Co-living providers make ‘some’ of their money through securing lengthy property leases and subleasing for maximised rates (we discuss the strategies used to maximise profit further in following sections). Co-living providers were fairly transparent that they were generating some of their profit by holding a discounted long-term lease. At the time of interviewing, the sector targeted commercial spaces that were vacant following the GFC, or unaffordable to single families. To make this appealing to the landholders, they offer them convenience by having the one rental cheque come in, and property maintenances assurances. P1 explained they would guarantee to owners they would:

keep it clean. . . [the owners] don’t have to go around and get one two three four five six cheques every month. No, it’s all managed.

P3 also asserted they were an ideal tenant for landlords:

As a landlord, I would actually rather have [us] operating the property because they’re going to have longer duration, they’re going to have tenants who care more about the property than if they were a hotel, you know, not people there partying, not giving a shit.

This practice alone is not a particularly novel way to generate revenue from real estate – it is essentially subletting a property without offering customers any legal tenancy status. It also does not account for the high revenue of co-living businesses. The sector realises value by reaching beyond housing property alone.

The next section of our analysis shows that co-living assetises households and tenants in two further ways. First, the sector realises value by changing the commercial and legal relationship residents have to housing. The sector renders the people who live in co-living investable and legible through its subscription-style membership model. Co-living reworks the relationship between the residents away from being legal tenants to being members – creating opportunities for ongoing profit without sacrificing appropriation of their assets. Providers focus on building their membership base, rather than expanding their property portfolios. Second, the sector sells its membership base an ideal ‘domestic experience’ that includes rescripting household form, integrating hospitality-like services and meditating domestic relationships for maximum profit.

Building a membership base: Realising residents as value

Co-living is made more profitable and calculable through a subscription-membership model. Residents access dwellings by subscribing to the service rather than entering a traditional sublease or rental agreement. This makes customers of co-living businesses members, not tenants, in the conventional (or legal) sense (Bergan et al., 2023). Co-living businesses seek investment through reference to their membership base, not their physical property holdings. When participants spoke of expanding their business, it was in reference to building their ‘membership base’ (P3) rather than increasing the number of beds or buildings they controlled. The subscription-style model was a key strategy to realise value from households and residents. Providers could charge a premium fee for the flexibility a subscription-style membership model offers. It allowed providers to increase prices during busy seasons and capitalise off cohorts who were not aspiring (or able) to access traditional housing market stock.

Providers often noted that ‘demand was seasonal’ (P1); in New York, the high season would be summer, when interns would come to the city to work in corporate summer programs. The house was heavily occupied during this time, something that allowed the provider to charge more and be more selective about which members they accepted. Outside of high season, this flexible subscription-style model allowed members to book with a day’s notice – allowing the provider to again charge a premium. This model allowed the co-living sector to capture cohorts of flexible workers that were not sure how long they would need to stay in the residence. P1 found this cohort curious, and struggled to relate to the need for this flexibility which came at a such a high cost, saying:

I can’t place myself in the situation personally where I wouldn’t know what I’m doing in the next couple of months, right. If I didn’t have to move home, right, and I know not everyone has that luxury, but it can - people really do use the month-to-month things where they’ll say, I’m staying for a month, and they extend every month, and they’ve extended it. Now from my perspective, I don’t understand that because you seem to know that you’re going to be here long-term, right. If you have a job, why would you extend month to month? But people really do use the month-to-month thing; you also are paying a lot more, right, you are paying a lot more for that. You’re taking advantage of the flexibility, but you’re also paying for that. Where if you just committed to this amount of time that you’re here for over a 12-month period, you could save $1000, up to $1200, right, maybe more.

P1 stated that members were paying for ‘flexibility’ through the membership model, but it left them in a grey area regarding protection against eviction:

Are looking for, yeah. I mean, there are definitely downsides to flexibility, right. For example, there’s no legal understanding of eviction laws in co-living, right. So it depends on the space and the way they structure the lease agreement. Right, and so because we don’t own this building. We lease this building, furnish it. So we own the furniture, the security systems, the temperature controls; I’m trying to think what else, a lot of electronics and things of that nature. But we don’t - they sign a sublease, and sublease law is different than - our members sign a sublease. Sublease law is different than the lease law. Also, even what they’re technically signing isn’t a sublease; it’s a membership agreement. That membership agreement is completely different than a traditional sublease where you’re just renting - you’re buying access to the space, which it stipulates in the agreement can be revoked at the end of the month at any month, right. So if you don’t pay, we don’t go through legal court proceedings for eviction, right. We just let you know - we have a process, right. But at the end of that process, it’s saying your bed is now currently on the market.

As members, residents are not protected by any tenancy security laws. Providers can remove residents almost instantaneously or increase the price as often as they want. Landlords, on the other hand, are required to provide notice for evicting tenants, and rent increases can be limited by rent-control legislation in New York and San Francisco. Reworking residents into members provides greater opportunities to extract value from the household inhabitants than a landlord has with legal tenants.

Key to reworking tenants into members was engaging them through digital apps and online membership subscriptions, rather than legal leases. Participants spoke about how digital platforms removed frictions in accessing housing (removing barriers to accessing the product like ‘complicated leases’) by providing easy access through digital platforms. When Tegan asked P3 how easy it was for people to subscribe to the service and move between international locations, they described it as like ordering an Uber or a pizza:

P3:

It is as easy as anything else is in terms of booking an Uber. Interviewer: So, they’re like, okay, I want to go to Tokyo.

P3:

Yeah, you just log into [subscription account] and you – [subscription account] like our login area where you say, hey, I want to go to this city for these dates. You book it in. We have different pricing options based on weekly, monthly or our flex membership, where you basically just pay for a bunch of nights upfront and then you get a cheaper nightly rate. So, you put a bunch in your [subscription] account and because you’ve topped up the [co-living business] bank account, now you get a better rate. You get priority room booking and that type of stuff. In terms of easy – yeah, it’s just as easy as going online and booking an Airbnb, ordering an Uber or even a pizza nowadays. It’s just that simple.

Membership apps order and organise consumer relations by making commercial transactions less onerous for consumers. The subscription model allows prospective customers to ‘dip their toes’ in without committing to a long-term lease. P3 said that members would often book for a short period but then become committed once they had been able to ‘test’ the service out:

It’s funny because it’s like, everybody wants to come in and test it out, everybody is like, oh, I just want to come in, see it for a short period of time, but for the most part we don’t have people call us up and say, I want to stay there 12 months. But it’s like, we have people like, oh I want to come, maybe stay for a couple of weeks, maybe stay for a month. That’s cool; I totally understand you want to dip your toe in the water. But then it’s so funny because those same people who wanted to come in and drop their toe in the water, just for a week before they committed, then they come, they love it, they extend for three or four months.

Providers need to continue realising the value of tenants and households through their flexible membership base to make a profit. However, there is a careful balance here. Nothing locks the members into the service – they can leave as easily as they came. This means providers need to make sure members continue returning to the service.

Ideal households: Rescripting household forms, experiences and roommates

The profit of co-living relies on leasing the property of others (rather than building a property portfolio) and building a membership base. The target market is distinct from those considered in Fields’s (2022) and Horton’s (2021) research which are more spatially fixed due to age or income. Although digital nomads frequently experience a precarious attachment to housing and work, they are a cohort with other options (cf. Bergan et al., 2021). Heath et al. (2018: 129) refer to co-living as ‘exemplifying a revealing class of choice and constraint’. The cohort has at least some degree of housing choice, necessitating a solid value proposition to get co-living residents to ‘buy in’ to the sector. The sector is also renting from property owners in some of the most expensive cities in the world. There is an imperative to keep lease costs down by making lower-cost spaces (like factories or empty office buildings) comfortable to live in for the maximum amount of residents. In this section, we review how the sector appeals to its membership base, and keeps its own operating costs down by ensuring that: (1) household forms are spaces where members would like to live while still being small and shared, (2) services included make it an ideal and unique living experience that cannot be replicated in other housing market products and (3) making sure the fellow members are part of the value proposition – aka people members want to live with.

Household forms

Co-living housing is a form of micro-living (Bergan et al., 2023; Harris and Nowicki, 2020). The sector typically offers minimal private space – that is, shared and shrunken bedrooms and bathrooms. The spaces have been described as dorm-like with some spaces selling bunk beds or beds with only a curtain around them for privacy. To sell the spaces as ideal households, they are carefully arranged and intentionally furnished to be as convenient, productive and comfortable as possible.

Co-living households are fully furnished and set up for members to immediately be able to meet friends, work and sleep. Co-living managers will do ‘all the cleaning, making sure you’ve got the right space’ (P6), and make sure the house is ‘move-in ready’. Participants would often discuss the seamless and convenient ‘experience’ for digital nomads who want to ‘get to New York City, they want to hit the ground running, they want to see the place, they want to work hard, and they want to play hard’ (P1). The convenience of the ‘short-term fully furnished place to stay’ (P1) was framed around reducing the frictions of mobility. Members could come with nothing but a suitcase. At one location, a provider showed Tegan the chalkboards on each resident’s door. The member’s name was written on the door, and inside their room was a made bed, with an itinerary of social and networking activities and the Wi-Fi password on top. The member would be greeted at the door by the house manager, who would show them around the home, furnished with TVs, a stocked kitchen and plug and play work desks.

In addition to making co-living spaces convenient places to live by ensuring they were fully-furnished to ‘hit the ground running’, providers also made sure they were as comfortable as living in a share house could be. Wall dividers, acoustic panels or curtains around beds allowed providers to put as many members as possible into a private space – while still trying to maintain the comfort of members. Common spaces tended to be where providers would focus amenities to make sure they were appealing to members. Common areas like coworking spaces, lounge rooms and kitchens were typically oversized – designed to foster a community ‘feel’ (Bergan et al., 2023) and to compensate for the small bedrooms. Providers often explained that they would encourage people to congregate in shared spaces by ensuring they were large, comfortable and had material objects that most members would need to access. They also provided spaces similar to a wellness retreat or hotel rather than a conventional home. Meditation rooms, Makerlabs, podcast studios and rooftop bars were available in some households Author visited.

However, the frictions of shared and shrunken household forms could not be totally ameliorated by clever design and intentional arrangement of furnishings. Including services to create a unique living experience was a critical strategy to ensure that the membership base would be attracted to co-living.

Domestic experiences and hospitality-like services

In addition to the physical spaces and furnishings, ‘experiences’ created through hospitality-like services were critical to generating profit. In co-living, household spaces, services and guest relations are curated and arranged to produce a positive living and working experience. Hospitality services promising a hotel-like experience are included to distinguish co-living from traditional housing products. The different experience offered are in line with cultures of hospitality rather than domesticity (cf. Sandoval-Strausz, 2007). The importance of ‘hospitality’ has been linked to assetisation in Simcock (2021) and Horton’s (2021) work on the hotel-ification of new BtR and care home asset classes. All participants felt that the high-end hospitality services created unique domestic affordances of comfort, convenience and being cared for.

In many dwellings, the bedrooms were shared, small and yet priced above market rent. Participants were often confident that this was justified by the provision of services that you would not get in a traditional share house. P1 said co-living was really ‘its own thing’ compared to traditional share houses because of the services provided to residents. Many providers identified themselves as service providers rather than housing providers. Tegan asked one provider about the best part of co-living. P5 responded, ‘for me, again, with the service that we provide. . .’ P1 similarly identified the services as what brought their prices up. The high cost of co-living was often attributed to the ‘services’; providers believed they delivered a premium living and work experience through services and cultures of hospitality. P3 acknowledged that ‘it’s not the cheapest option, it definitely is not the cheapest option’. But they had hosts who made it feel like home and produced an experience unlike what would be available in hotels or shared housing. Services designed to create specific experiences also helped smooth the frictions of micro-living – allowing providers to generate the maximum profit from the smallest spaces possible. P6 explained convincing a resident to share a 10-bedroom house for above-market rent sounded ‘crazy’ until they showed them the additional services layered on top.

We identified community managers as particularly central to the experience aspect of co-living. Community managers would go above and beyond to ensure residents had a positive experience. They did everything from household maintenance, facilitating professional networking and hosting new residents to make them feel welcome. P3 said:

The only way it feels like someone’s proper home is if they’re welcoming you in, if they’re hosting you if they’re–- the word that I always use is they’re a connector. To me, that’s the way that I see a host. Because a host in a general sense like Airbnb uses it for someone who hands you the keys and says, call me if a pipe breaks. Okay, I guess they’re a host, but not really. . . [Our hosts] host the weekly dinners. They do all the check-ins, so as people come in during the day, they’ll give them a tour. If they come in later at night, they’ll show them around the next morning. . .

This idea that hosts made the spaces feel welcoming and homely was a common theme across interviews. P6 stated that hosts took care of ‘everything’ – from organising household bills to creating feelings of comfort and ‘[Creating] that feeling that you feel welcomed into a new place, that’s definitely a great benefit. . .’. This focus on experiences and hospitality services echoed our earlier research into co-living marketing (WeLive, cited in Bergan, 2021).

Creating the ‘feeling’ or experience of being welcome is in keeping with cultures of hospitality. Services like hosting a weekly ‘family’ dinner, writing people’s names on a chalkboard on the door to their room or touring residents around the properties and introducing them to other tenants help integrate ‘sanctuary’ like experiences into the dwellings. Some companies even extended hospitality services to the guests of their members (for a fee), as P1 explained:

we’re happy to help if we have the availability. So if there’s an open bed, their guest can stay up to two consecutive nights for $30. That’s because we prepare the bed, right, it’s like they get a beautiful nice clean room to come into. Your linens are on your bed, you’ve got a towel; it’s like coming into a hotel dorm room for $30 a night, which is insane. (Emphasis in original audio)

In addition to bundling in services to generate a profit, the sector actively mediates the relationships between roommates to make sure fellow members are part of the value-proposition rather than a challenging element of shared housing.

Roommates

One of the unique elements of co-living households is how members themselves are part of the value-proposition offered to other members. The sector will often market things like ‘cool roommates’ or friendship are included. To activate members as part of the value proposition, providers filtered and managed the individuals entering their communities and used various strategies to discipline members to ensure that they were people that others within the target membership group would like to live with.

One important technique to ensure that members would attract other members was ‘screening’. Participants spoke about how they would interview or assess potential members to ensure they would be a ‘good fit’ for the community (meaning they would not upset other members). P5 felt this was the ‘main part’ of their service and pointed to their use of software with an ‘algorithm’ to match strangers. While P5 did not want to disclose further details of what the software did or how it worked because it was commercially sensitive, they stressed that they screened members because:

we’re matching to strangers so, in order to provide a little more peace of mind, provide more of a seamless experience, the fear is like, I don’t know this person, what if they live here and I don’t like them

Screening was a technique to create a sense of trust with existing members, while excluding incompatible ‘outsiders’ from living in the space. This participant wanted to ensure they were ‘matching awesomeness with awesomeness’. Other participants screened members using phone interviews, online application forms or checking prospective members’ social media accounts. When asked what things would be looked at in social media accounts, P1 identified posts that could indicate if someone was dishonest in their initial online application. P3 determined they were more concerned about making sure someone was a ‘good fit’: they gave the example that if someone was a nightclub DJ, they might not fit in with their community of professionals. However, the examples provided typically seemed to be more hypothetical reasons to exclude a potential member than common practice.

In addition to screening potential members, providers also tried to create opportunities for connections between members. The promoted idea of co-living is that you have more significant opportunities to build enduring and genuine relationships with roommates than in professional contexts like coworking spaces. Community managers included professional networking as part of their role; many described how they acted as a match matcher between members. P5, for example, discussed how they would run events and social mixers based on members’ interests:

[We hosted] a speaker series on cryptocurrency because that’s what everybody’s talking about. So yeah [we] brought in like a crypto expert to go and chat, [then we had] a mixer and there was a meet and greet, Q&A and all that good stuff

Another participant explained part of the art of professional networking came from getting to know members. They prided themselves on knowing their members well in order to facilitate networking. P1 said that this was always in the back of their minds when running events:

When we have parties a lot of the time, our role isn’t - we’ll have one person managing the party, putting food out and making sure the burgers are grilled and things like that. But I will spend time being, okay, I know this person’s a graphic designer, and this person is into graphic design but is thinking about going into the genre. These people need to speak. This is a frontend designer; this is a backend designer, they need to speak, right. That’s my favourite part.

P6 said that they also were focused on fostering these relationships at in-house events:

Say if you were a digital marketing expert, how can you help this other company that is just a guy that can code but doesn’t know anything about marketing. They’ll discuss that they can actually help each other. Then, of course, it’s organising some events and things like that.

Providers also ensured the resident community was ideal by disciplining members if they were acting in undesirable ways. P6 noted how they had to be careful that members did not get ‘too’ comfortable and start leaving belongings in common areas.

It was minor, but it was still, it could be a bit annoying if some people started making the house totally theirs; so they put their books out. Some people will say well, it’s nice to put books out, but they were starting to put all their stuff out; their coats, their shoes; their things. It’s like well, no you don’t share - it’s not like you would at home - it’s different. You’re not sharing a house like a normal arrangement; this is co-living, and everything else outside is to be kept the same way as it was in the morning.

P1 noted how they used cameras in the common spaces to manage major disagreements between roommates centred around the shared spaces, reworking household spaces as monitored sites where providers would oversee the behaviours of roommates. This represents a radical reworking of households from private, to households being monitored and mediated. P1 stated how they only used the camera for major issues; I joked that this was because they would not want to seem like Big Brother. They responded:

Exactly. To get someone to buy into the fact that there is a camera in the space, which is a large thing to some people [to] have to get over, and I totally understand that. To get people over that we always to this is, we check the cameras for infractions that are other than cleanliness. If there’s - or if someone, or if one of the members asks us to do it. Then when they ask us to do it they need to give us specific times of day and specific cameras. We can’t check all cameras all times all that. (1) That would be too much time for us, but (2) that’s surveillance, right. That’s - we don’t want to do that.

When asked what would constitute a major infraction they gave the example of an iPhone charger being stolen. They said they would use the Facebook group page first, asking other members to ‘volunteer’ the information, but if they did not, they would check the cameras. If disciplining fails, providers indicated they could remove members with relative ease due to the lighter regulation of this sector, which exists outside of tenancy legislation. P3 explained how because they were technically under a hotel licence, they could quickly evict ‘bad’ residents to ensure the rest of the community was comfortable:

If somebody’s just a real bad egg for the community, and it’s great for the community to know, if somebody ever does come here - and it has happened that they’re just not a good fit, the community manager can handle it and has handled it and just been like, sorry, but you’re just not a good fit for the community. We’ll help you find a new place to stay for the next few nights. If they still had bookings here, we’ll refund them the time they didn’t stay. Anyway, the point is that people in the community also know that if somebody shows up and they’re just not a good fit, we can take care of that.

Importantly, realising value out of members was not necessarily easy for the workers. There were frictions and tensions in profiting off people seeking connection with other people. P1 reflected openly about the ethics of profiting off loneliness. P1 stated:

I think eventually as a kind of loneliness as a mental health issue as it becomes more normalised - which it totally is, I hope it will be more - then this would become an antidote to that. That’s easily the one reason I’m in it completely is because people don’t - can’t accept that they’re alone. It sucks. When - the question is, I don’t know if for-profit companies should capitalise on the loneliness of individuals and try and get them together. It doesn’t seem like a good thing. I think it’s like capitalising [pauses], but the question is, do you [pauses] genuinely doing [pauses for several seconds]. Yeah, as long as it’s doing good. As long as they’re not appealing to their - in the way that traditional advertising has appealed to our base nature. As long as you’re trying to not do that, I think you’re okay.

This provider felt conflicted that they generated revenue off their members, who were sometimes lonely and struggling with frictions induced by precarious work and hypermobility.

Just as Fields (2022) and Horton (2021) have indicated how property can be rearranged and constructed into a financial asset, co-living indicates that so too can households and their inhabitants. Co-living appropriates housing real estate, builds unique commercial and legal relationships between residents, and offers a housing product that rescripts household forms, domestic services and roommates – all to render housing more liquid, profitable and investable.

Conclusion

Our work identifies the ‘material and practical circumstances and calculative devices and techniques’ on which financialisation and assetisation depend (Fields, 2022: 163). The strategies to extract value are diverse – some institutional investors use digital technologies to mobilise data about renters (cf. Nethercote, 2023), others turn tenants into subscribers. There is no single strategy for assetising or financialising housing. Nor are these processes as linear or omnipotent as they may first appear. Assetisation of real estate occurs when something is capitalised in ways that extend beyond exchange value. Transforming housing into assets is not a seamless and straightforward process. It is relational, contingent and dependent on a range of actors and circumstances – our work is demonstrative of heterogeneous practices underpinning the assetisation of housing. Our work considers households as microgeographic sites that are reworked and rescripted to hold up the wider project of the financialisation of housing. Specifically, we look at how property can be appropriated rather than owned, how the legal and commercial relationship between housing and residents can be reworked, and how household forms, services and roommates can be rescripted to make housing more profitable and liquid.

Understanding how assetisation assembles through new types of housing, like co-living, is essential when looking for opportunities to resist financialisation as an omnipotent force (Fields, 2018). As argued by Fields (2017: 588) financialisation has a ‘necessarily contingent and incomplete nature’. Rather than pitching housing assets as the outcomes of monolithic and inevitable waves of financialisation, we see them as contingent and relational infrastructures. Broader political-economic processes are negotiated and constituted in the everyday. Finance threads intimately through everyday households. This highlights the often mundane and ordinary places where markets are made, providing opportunities for resistance.