A startup turning old hotels and offices into housing for California’s forgotten middle-class is coming to one of America's least affordable cities

StarcityStarcity’s Venice Beach location.
  • A startup called Starcity is building the world’s largest co-living apartment complex in San Jose, California.
  • With nearly 800 bedroom units, the building will house a diverse group of tenants, including single residents and multi-generational families.
  • Co-living spaces have emerged as one possible solution to the Bay Area housing crisis, which has become particularly acute in San Jose.

Co-living, a form of housing where residents rent their own apartments but share common spaces and amenities, was once considered an odd solution to the urban housing crisis. Now it’s become so popular, there aren’t enough spaces to satisfy demand.

In November, a startup called Starcity – which transforms old hotels, retail buildings, and parking garages into co-living spaces – announced its plan to build the largest co-living complex in the world.

Read more: A startup turning old hotels and offices into housing for San Francisco’s forgotten middle-class is expanding to LA

The company already has buildings in Los Angeles and San Francisco, but the new site will be located in San Jose, which was recently deemed the least affordable place to buy a home in the US. In the next year, the city’s housing prices will rise by 15%, according to predictions from the real estate site Zillow.

That means even more citizens will require homes by 2019.

StarcityCaroline Cakebread/Business InsiderA Starcity kitchen in San Francisco.

With nearly 800 bedrooms, the new complex wouldn’t solve the city’s housing crisis, but it could provide an experiment in “mega” co-living spaces.

By renting out a bedroom, residents gain access to a host of amenities, including home cleaning, dog walking, and laundry services. They will also share a communal kitchen, living room, and TV area. Some units will have their own bathroom, while others will share with a second room.

At $US800 to $US2,500 per unit, the prices are competitive with the median rent for a one-bedroom apartment in San Jose (just over $US2,000). Starcity hopes the rooms, which open in 2021, will attract a diverse group of tenants, from single residents to multi-generational families. The building will be located just three blocks from Diridon Station, the city’s main transit hub.

StarcityCaroline Cakebread/Business InsiderOne of Starcity’s San Francisco locations, which houses 20 residents.

The idea, CEO Jon Dishotsky said in a statement, is to create a style of “vertical living” that allows co-living spaces to function as their own neighbourhood. Unlike traditional apartment buildings, co-living theoretically encourages residents to mingle and collaborate.

To advance this mission, Starcity is also scheduled to break ground on a 270-unit co-living complex in San Francisco. The building will adhere to SB 35, a California law that requires cities to build more affordable housing. When the complex opens next spring, half of the units will be made affordable to households earning below 80% of the area’s median income.

The San Jose apartments, by contrast, cater to those earning around $US88,000 a year. While that may seem high compared to the national average, it won’t get you much space in high-priced San Jose.

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