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Michael Scott

Michael Scott

Writer, Safehaven.com

Michael Scott majored in International Business at San Francisco State University and University of Economics, Prague. He is now working as a news editor for…

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Co-Living: The Millennial Answer To Being Broke

Millennials

Pods are not only for moving and storage, as seen on TV ads, where couples are trying to move far away from the in-laws or have simply accumulated too much junk: The reality is that many are opting for pod life for financial reasons, especially in expensive urban enclaves in California.

Neither are dorms just for students, anymore. 

In San Francisco, where high-paid techies have relocated in droves, the median price tag to hit an impossible $1,687,500. The median condo sales price was around $1,250,000. According to CityLab, the average San Francisco household would have to spend more than nine times its annual income to fully pay off a median-priced home in the city.

As a result, it appears that people are leaving San Francisco in large numbers, more so than any other U.S. city. In fact, it’s so bad that reports say there is a shortage of U-Haul trucks and moving-related expenses are being inflated in an effort to profiteer from the migration.

A Bay Area Council Poll shows that 46 percent of residents say they plan to move away soon, up from 40 percent last year and 35 percent in 2016. 

However, for those who are staying, quite a few startups are available offering “cheap” housing and luring Millennials and Gen Zers into housing with five-star amenities at half the cost of a studio apartment. 

Startups like PodShare and Eddy are making up for the shortage of affordable housing in cities like San Francisco and Los Angeles by renting dorm-style lodging and providing tenants a co-living experience.  Prices vary slightly at different sites, but it averages between $800 and $1,400 a month. The average apartment rent in San Francisco is $3733. 

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Pod’s co-living membership usually provides a list of perks such as fitness centers, recording studios, yoga and dance classes, field trips and career-building workshops…

What one doesn’t get? Privacy, intimacy and a place to entertain on their own. 

Millennials numbers some 80 million in the U.S. alone, and has emerged as the dominant force in the housing market. At the current savings rate, just 25% of millennial renters will be ready to put down 10% on a median-priced starter home in the next five years.

However, if a recession hits, they would have a hard time surviving. It’s generally blamed on an inauspicious start: Many were graduating from college at an unfortunate time for getting jobs--amid a financial crisis. 

“The severity of the 2007 Global Financial Crisis and the recession that followed may have left a lasting impression on millennials, who were coming of age at that time, much like the Great Depression left a lasting impression on the Greatest Generation,” a 2018 Fed report notes. 

Millennials haven’t gotten back on their feet yet, and if another recession hits, they’ll be the first to suffer. They’re behind economically, and they might not have time to catch up to any form of stability before the rug is whipped out from under them again. 

An Urban Institute report from July suggests that Millennials are getting shut out of the housing market to the point that their homeownership rate is 8 percent lower than the two previous generations’. 

They also aren’t saving or investing like their predecessors, the Atlantic notes, pointing out that the share of Americans under the age of 35 owning stocks dropped to 37 percent in 2018, from 55 percent in 2001. 

By Michael Scott for Safehaven.com 

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