One of the week’s biggest housing stories concerned adults acting like students. A New York Times profile of Starcity, a Bay Area-based developer focused on creating a new type of affordable housing in tech-inflated San Francisco, compared the company’s “unusual experiment in communal living” to “dorm living for grown ups.”
On the heels of other startups seeking to find solutions to the affordability crisis in microunits and coliving, Starcity aims to stand apart. As cofounder Jon Dishotsky told Curbed, his company wants to maximize space in unused urban neighborhoods, transforming one-star hotels, office buildings, unused commercial spaces, and even parking garages into residential buildings for increasingly cash-strapped parts of the professional class. Each tenant, or member, pays $1,400 to $2,400 a month for a small, fully-furnished bedroom with WiFi, janitorial services, and shared common spaces.
“What I’m worried about is the heartbeat of cities,” he says. “If teachers, firemen, and policemen can’t afford to live in cities, it ruins their viability.”
Dishotsky understands the dorm analogy. It’s a simple leap to compare adults sharing bathrooms, kitchens, and living rooms with a more collegiate lifestyle. But Starcity, which currently operates 36 units in three buildings and plans to expand to Oakland and beyond—owing to its $18.9 million in venture capital—isn’t a dorm, he says. And it’s not like the other coliving spaces on the market, such as Common and WeLive.
Dishotsky says Starcity is focused on making cities more affordable, and that it’s pouring proceeds into pursuing prefab construction to lower costs and create even more housing that hits a sweet spot between high-end luxury and public, affordable housing.
“We’re one of the only ones that focus on the middle-income demographic,” he says. “And less than 25 percent of our members are in tech.”
Starcity certainly has its own spin on the shared living concept. But the category is far from new. The general idea—offering a private bedroom and shared living space to singles looking to work downtown—is almost as old as the idea of being a young adult in a city. What’s more, this new wave of tech-enabled developers seem to be creating a 21st-century version of one of last century’s most popular, and misunderstood, housing types: the single-room occupancy hotel, or SRO.
The coliving and new-housing crowd often bristles at the comparison, especially because SROs have a seedy reputation and are illegal in many cities. Known colloquially as flophouses, SROs, especially in the later half of the 20th century, were viewed as housing of last resort, very short-term living for the desperate. Remember the scene in in the movie Big where Josh is crying in a seedy hotel? That’s an SRO.
Brad Hargreaves, the CEO of Common, one of the larger coliving startups that operates in four cities, told Curbed the service they offer is anything but. It’s a common misconception that coliving serves a transient audience, which brings up comparisons to old-school SROs. He said that more than 70 percent of his residents made a long-term commitment, beyond a month-to-month arrangement.
”It’s convenient and has a friendly and warm community where they know their neighbors,” he says of their spaces. “It’s a great place to stay as opposed to a place to crash for a couple months.”
It’s true these new housing types aren’t anything like SROs at their worst. But it’s instructive to look at why SROs became so maligned, because at one point, they were critical to housing a large portion of a city’s population. Urban population growth means cities are strapped for affordable housing for young, single workers—and maybe there was a potential solution for the crush this entire time.
Entry-level housing stock for a booming city
SROs and boarding houses flourished in American cities during the early half of the 20th century, when rapid growth of industrial and manufacturing jobs drew more and more workers into booming downtowns.
For a significant portion of New York’s history, a majority of the housing stock could have been considered SROs, according to an article by Brian Sullivan and Jonathan Burke in the CUNY Law Review. “Until the twentieth century, SROs housed a broad, socioeconomically diverse population,” the paper noted, and in the early 20th century, this housing stock increasingly became housing for single, working-class, and poor men. Author and urban scholar Paul Groth estimated that during this period, a third to a half of Americans living in cities either boarded or took boarders at some point.
Along with boarding at old-fashioned women’s hotels, such as New York’s famed Barbizon, these types of dwellings provided cheap, entry-level housing for new arrivals—just the type of living arrangement that’s currently in such short supply.
But beginning in the postwar period, this housing stock started to disappear: Suburbanization, white flight, and urban decay removed some of the potential market of new urban workers that used SROs. Social shifts toward independent living and a historical bias towards single-family living also took its toll.
More importantly, cities, viewing these buildings as overcrowded, substandard housing, raised legal challenges and banned new construction. Visions of crowded flophouses during the Depression, and packed living quarters where workers rotated and shared beds, certainly didn’t help. In 1955, New York City banned new SRO construction and made it illegal to divide up homes into SROs, precipitating a steady decline of such spaces. In recent decades, some locales have created incentives to turn SROs in market-rate apartments.
Another key factor, and one that created such a negative connotation, was deinstitutionalization and funding cuts for mental health treatment, which drove many former patients to SROs as a means of cheap, available housing, and drove out other tenants. As Sarah Watson, deputy director at the nonprofit Citizens Housing and Planning Council, told the New York Times, SROs remain highly stigmatized, though she says there’s nothing wrong with their general design and layout.
“The problem was management and money and a whole lot of people in poverty put together,” she says. “It wasn’t design. That’s what’s such a shame about it.”
From the ‘50s on, SROs disappeared across the country. In Chicago, 81 percent of the city’s SRO stock was lost between 1960 and 1980. In San Francisco, once known as “Hotel City,” more than 10,000 units were lost between 1960 and 2000. New York City lost 175,000 units between 1955 and 2013; now, these types of living arrangements constitute a fraction of a single percent of the city’s rental housing stock. When you put these numbers up against the extreme shortage of affordable housing options for young adults in these cities today, it seems like a significant loss.
Is there anything wrong with a smarter, cleaner, safer SRO?
The loss of SRO units also makes the types of housing solutions being advanced by Starcity, WeLive, and Common seem like more than mere disruptors in today’s increasingly unaffordable housing market. They could also be viewed as the new generation of small, shared spaces that have always given the city’s up-and-comers an entryway to urban life.
As Hargreaves told the New York Times, “We’re not trying to reinvent how people live. This is already the way people are living. We’re trying to create a more convenient, comfortable version of it.”
Maybe the solution cities are looking for—cheap and communal living for young adults getting a toehold downtown—is merely a cleaner, smarter, better-run SRO.
Dishotsky says Starcity is significantly different. They’re not “cramming people in,” and instead think about a more holistic experience. It makes sense that people want to paint Starcity with a pre-existing brush.
But he also doesn’t think the SRO concept was all bad.
“It was one of those great ideas that had good initial execution, and poor long-term viability,” he says. “SROs became in vogue during the industrial and manufacturing eras of the U.S. and housed the working-class population. A lot of them were low-quality and served the need at the time.”
Dishotsky has said that his company’s concept represents a “new American Dream,” part of the shifting movement back into the city and away from the white picket fence idea. At a time when an average home costs a million dollars or more in many markets, and studio apartments can go for more than $3,000 a month in some urban neighborhoods, new generations want options that don’t prioritize stuff, suburban living, or assets.
Starcity, and this new crop of developers, want to make single-room living, with shared common space, an affordable and efficient option for young renters. As long as they’re finding a solution to a significant problem in urban real estate, perhaps it doesn’t matter what they want to be called.