Cohousing? I didn?t make that up. Frequent commentor Looking Ahead introduced me to the term in a comment made on Alt-Retirement and the Long-term Care Dilemma. It?s a perfect term to describe the living arrangements I outlined to deal with the prohibitive cost of long-term care.
But in a much broader sense, it may also be the ultimate high cost retirement housing alternative, even for those who don?t need long-term care. It could be the grassroots solution to the high cost of housing in general, and a number of specific financial and care concerns for retirees.
What is Cohousing?
There?s nothing complicated about this concept. Cohousing is any living arrangement in which you share living space with people, other than your spouse or dependent children. Many people are familiar with this from early adulthood. You may have had an experience with a shared living arrangement when you took your first apartment or lived away at school. That was cohousing.
An article in Forbes last summer ? Millennials?So Happy Together ? describes how companies buy apartment buildings, then lease out individual rooms with shared access to bathrooms and kitchens. They refer to it as dorms for adults. The arrangement has become popular with people in their 20s and 30s, and mostly in high-cost cities. One of the unexpected benefits is that it helps to minimize the isolation residents often feel living alone in big cities.
That?s an example of formal cohousing. At a more basic level, it could involve living with extended family, friends, or even strangers who are at a similar place in life. I suspect this will become the wave of the future, particularly for retirees looking for both lower-cost housing, as well as sharing of responsibilities, and an antidote to the isolation that comes with living alone.
I just touched on some of the forms cohousing can take. But let?s do a deeper drill down.
Living with extended family. If you?re in the retirement years, this could be living with your adult children. But can also mean living with siblings, cousins, or family-type friends. It?s cohousing in familiar company. For example, a retired couple could move in with their adult children. This will provide a low-cost living arrangement, as well as having family nearby in the event of an emergency. For the adult children, it can represent help with household costs, and some degree of shared responsibilities. If children are involved, it could be an important childcare arrangement.
Creating a roommate arrangement. This can be an alternative if you either lack family to move in with, or any with whom you’d consider moving in. It would be more of a business arrangement, which is sometimes less complicated. You?ll share household expenses and responsibilities. For retirees, it can also mean that someone else is available in case of emergency. In urban locations, it may even include shared transportation.
Bringing in a boarder. This is basically a roommate situation for a homeowner. If you have an extra bedroom or two, you can lower your housing expense by renting them out. If you?re older, you may also want to accept certain services in lieu of rent. This can include housecleaning, meal preparation, shopping, and even personal assistance. It may be an alternative to high cost long-term care.
Formalized Cohousing Arrangements
Looking Ahead also generously provided a link to an organization dedicated to shared living arrangements, CoHousing.org. The website has categories including:
- Finding cohousing
- Creating cohousing
- Living in cohousing
- Aging in cohousing
They even offer a cohousing directory and classified ads to help you connect and find resources.
That?s just one example. The Forbes article referenced earlier, even mentions several companies that are engaged in the business of cohousing. These include:
- Common ? covering New York City, Chicago, Washington DC, and the San Francisco Bay area
- Ollie ? offers ?All Inclusive Coliving? in Pittsburgh, Los Angeles and NYC/New Jersey
- Outsite ? their motto is ?Work anywhere. Live differently?, and caters for those who want to live in vacation type locations
- WeWork ? this is a coworking service, but they recently launched a cohousing arm called WeLive in New York City
These are just examples of entrepreneurial solutions to the problem of high cost housing. They’re centered in high-cost urban areas, but that?s probably just the start. Entrepreneurial solutions usually start in the most profitable markets. But eventually, they flow out to lower-cost areas.
It?s becoming increasingly clear that there are options to high-cost housing. If structured properly, certain cohousing arrangements could even be an alternative to long-term care.
The Benefits of Cohousing Arrangements
There are number of compelling reasons why cohousing may be the wave of the future.
- Cost of housing. In many large metropolitan areas, housing has become prohibitively expensive. Even if your house is mortgage-free, property taxes, homeowner?s insurance, homeowner?s association dues and utilities can run well in excess of $1,000 per month.
- Housing location. Cheaper housing is usually available far from employment and necessary services. This is an obvious disadvantage for young people in need of jobs, or older folks needing high quality medical care and social services. Cohousing can make closer-in living more affordable.
- Avoiding isolation. Living alone can be stressful for a young person. But it can be downright fatal for retirees. Just knowing someone else is available in the home in emergency situations can be a comfort.
- Shared household responsibilities. As we age, we may find it increasingly difficult to perform every day household chores. Cohousing can allow for sharing of those responsibilities.
- Specific personal services. As mentioned above, a boarder can move into your house and perform certain services in lieu of rent. This kind of arrangement could either delay or eliminate the need for a move into a long-term care facility.
- Emotional connection. This is mainly in regard to living with extended family. Yes, there?s often conflict in families. But there?s also a level of emotional support that can’t be found elsewhere, particularly not in professional facilities.
- Shared transportation. As you get older, there?s a high likelihood you?ll no longer be able to drive. Living with someone else can can give you much needed mobility.
- Security. It?s generally safer to live in a group than to live alone.
There benefits in this list for people of all ages, but especially people over 65.
The Drawbacks of Cohousing Arrangements
Let?s face it, cohousing is a compromise. In a perfect world, everyone would have their own space, which they could easily afford. But as I like to say, this isn’t a perfect world ? and that?s why we have to have these discussions. For a person on a limited budget, struggling with high housing costs or the prospect of long-term care, compromises have to be considered.
What are some of the limitations of cohousing arrangements?
- Living with people you don?t like ? This can happen whether you’re living with extended family, friends or strangers. In fact, people you once liked could seem less desirable at very close range. It?s also a fact that some people really are very difficult to live with.
- Less privacy ? Even though it isn?t guaranteed in the Constitution, privacy is a virtue valued by most Americans. Naturally, you?ll have less of it if you’re living with other people.
- Security risks ? This is probably a bigger issue if you’re living with strangers. A less than trustworthy roommate or boarder could turn into a nightmare.
- Unequal distribution of expenses and responsibilities ? It?s possible that a cohabitator could fail to provide agreed-upon responsibilities or financial contribution. In the case of living with adult children, a retired couple could morph into nannies for the children.
- Less ?sovereignty? ? In your own home, you can be the final authority on all matters. A shared living arrangement is more of a democracy. You have to get comfortable with having less authority.
- Less permanence ? Unfortunately, cohousing arrangements can be less than permanent. This is particularly true with boarder and roommate arrangements.
None of these situations can?t be overcome, but for most of us it will definitely take a change of thinking to make that happen.
Why Cohousing May Become the Wave of the Future
Young workers are already adopting cohousing in the big cities. They could be the cutting edge. This is described as the Pareto Principal in which 20% of people generate 80% of results. Charles Hugh Smith has refined the concept. He maintains that just 20% of the 20% are the true leaders. It means that 4% of the population ? 20% of 20% ? generate most change.
Millennial?s may be leading us forward. Or even back to the past ? cohousing was quite normal not so long ago. When I was growing up, older cities and towns commonly had boarding houses (also called rooming houses), in which homeowners rented out rooms to strangers. Many suburban communities have effectively outlawed these arrangements in the name of promoting higher property values. I suspect what they’re really trying to do is get rid of ?undesirables?, which many people assume “transients” to be. But as is always the case, humanity finds a way around these obstacles. I think that?s coming.
Whether it happens on an individual level, through personal arrangements, or more formal ones created by businesses, I think it?s safe to say that cohousing is on the horizon. It?s a real alternative for people to lower their housing expenses. But it may be even more beneficial for retirees who also have a need for some form of assistance through shared responsibilities.
Looking at the current trends in housing costs, increasing lifespans, and the need for some level of care late in life, cohousing should be a consideration. It may become an central part of alt-retirement lifestyle.
What are your thoughts on cohousing? Do you see any potential in the arrangement? Or do you think that our society has moved too far away from communal living arrangements to ever go back?