Why Cohousing May be the High Cost Retirement Housing Alternative

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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.

Why Cohousing May be the High Cost Retirement Housing Alternative
Why Cohousing May be the High Cost Retirement Housing Alternative – Well, almost the Golden Girls!

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.

Cohousing Variations

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?

( Photo by wohlford )

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6 Responses to Why Cohousing May be the High Cost Retirement Housing Alternative

  1. Hi Kevin. I think cohousing is a very viable option for people any age but especially for retirees. Let’s face it, none of us are getting any younger, and costs are rising quickly. However, the problems you outlined above are very real obstacles to overcome, because if faced with any of them, cohousing can become a nightmare. For older people, it’s best to go with someone you know well. Younger people can adapt and/or move more quickly, but an older person, not so much. If you know the person well and think they could be a good roommate, this is a very good option for seeing you through the retirement years…like the Golden Girls. I do believe we’re going to be seeing more and more of this as the future unfolds.

  2. I sure believe that too Bev. The question is will we be open to it? I suspect most won’t. But for the rest of us, it should be on the agenda. Particularly for single retirees. Over the years I’ve seen many, many situations where very old people live alone in a very large house. I’ve never understood why anyone would want that. To me it would amplify the fact that you’re alone. That was one of the concerns we had with my mom. She didn’t think it was a problem at the time. But now that she’s out of there, she can see it clearly. That gets back to what Tim said on another thread about taking emotion out of decisions.

  3. Over the past thirteen years I’ve had many ‘boarders or crashpadders’ stay in my home. They were mostly young professionals; pilots, engineers, medical students, nurses, railroad engineers, school teachers, and various others. In all cases, I was old enough to be their mother. In some cases, they’ve stayed in touch and I am still considered their second mother. I love it!

    Conversations have been very interesting and they’ve loved the advice and life experiences I’ve shared. I enjoy hearing about their upbringing, goals, struggles, and relationship concerns. For those taking tests that are critical to their careers, I provide encouragement and coaching to help them stay focused and remove the negative thoughts that creep in and cause doubts.

    I’m going to be honest,there are downsides. It took me awhile to learn those and set rules in place to prevent them. The number one issue is the washing machine. Younger people have no concept about the capacity of a residential washing machine. After some overloading issues I made this policy: I do their laundry or they go to the laundry mat. No exceptions. Since the laundry is on the main floor it is no big deal for me to do it. They love coming home to all their clothes being clean and folded. Those that choose to do their own are directed to the closest coin laundry where they pay and do the work. Either way is fine with me, but I do not charge for labor or soap. Other rules include no overnight guests. With all the new online dating programs younger people seem to have no concerns about strangers coming to stay for the night. Not here. Not happening. If they get caught doing that they are asked to leave. One nighters tend to have sticky fingers among other issues. I provide all linens, dishes, furniture, etc. The only thing I want them to bring is a computer and their clothes. I do not want to chance bed bugs coming in with their items. Nor do I want the odors that come with other people’s furnishings. No candles. No smoking. No pets. No illegal drugs. Alcohol needs to be occasional. This is not a frat or sorority house. Everybody appreciates the peace and quiet and absence of drama. I’ve had some folks that clearly were alcoholics and they hid the cans and bottles (and took them to recycling) but never got drunk or out of control.

    I’ve found meeting people first, if possible, is best. I’ve learned not to take in locals. They always come with drama, but I had to learn that the hard way. Young professionals in the city for testing or internships are ideal.

    Back in my airline days, I stayed at a crash pad. For those that live near an airport this can be an ideal way to rent rooms. Reserve crew members must be within an hour or two of the airport. A homeowner might have twenty crew members renting but rarely have more than one, two, or three overnighting on the same night. Crew members are seeking quiet comfortable beds. Shower. Iron and ironing board. And possibly a place to store some food items. They come and go at all hours of the day and night. Some have airport cars others do not. Every single one of them has had extensive background checks done along with random drug testing. They love a big screen on the TV and must have access to the internet. Some crash pads provide one laptop to be used by all crew members. With all the Smart phones nowadays most do not care about computer access. Linens must be provided. Some crew members love to do yard work, cooking, and other projects while waiting to be called to work. These are low seniority employees so their pay is minimal. Rent should be $150 to $200 per month in most cases. Rarely do they need use of laundry facilities. Crash pad owners launder the linens and store them in a closet or shelf and each crew member makes their own bed and removes the sheets when they leave. For crash pads that take only four pilots for example, they can have a set of twin beds in two bedrooms. Assign a bed to a pilot and nobody else uses that bed. Rent can be a little higher in those arrangements and pilots can leave some personal items at the crash pad. Investors and pilots that become real estate investors find this is a great way to build their wealth while their co-workers are paying for it.

    Anyone considering these types of living arrangements need to be flexible and tolerant of all types of personalities and living habits. Since I live in an insane HOA, I’ve helped pay for my legal bills by renting rooms. It sure would have been nice to have taken that money and had an amazing vacation instead! Lesson learned…no HOAs ever again!

  4. Hi Nila – That’s all good information on boarders! But what I don’t get is taking in boarders in an HOA neighborhood. In my experience, they don’t allow that (another good reason to avoid HOAs!)

  5. So far my HOA has not made a rule that housemates are not allowed. I’ve kept the number to one or two at a time so it’s not like I have fourteen people coming and going. Some of the people that have stayed with me have been confronted on the driveway being asked if they live here. There are never any parties or noise so the only reason my neighbors are inquiring is because they are being nosy. Perhaps to add to their rumor mill that I have young men coming and going from my house? I could care less what rumors they are spreading. These people are very clean cut professionals and more highly educated than my neighbors. Rest-assured when they leave my house after a few weeks they know exactly why to never buy in an HOA!

  6. When I was in the mortgage business it was typical for hoa’s, especially with condos, to prohibit “transient use”. No HOA I’ve lived in permitted it. It’s one of the major reasons I wouldn’t own in an HOA. You never want your income options restricted. You must be quite the mystery woman in your neighborhood with all those guys coming and going 😉 (Good for you – keep em guessing!)

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